A process-centered home building company is a healthy company
Through the years, I’ve worked with hundreds of process improvement teams, cross-functional groups of employees assembled to grapple with the problems of poorly designed or badly executed operational functions. I’ve trained more than 2,000 employees on the principles and practices of continuous process improvement. Each team was different, but I began each training session with the same simple question: “What does our company do?”
After a long, awkward silence, one brave soul would respond, “Um … we build houses?”
“Actually, no,” I’d reply. “We don’t really build anything. We’re essentially a process management company.” I’d explain that we manage the processes by which other companies build homes on our behalf.
While this jarring truth was sinking in, I’d ask for a show of hands of how many in the room work with a hammer or a paintbrush to do their jobs. Most, of course, used neither. We’d then create a list of the tools we did use every day—computers, telephones, calculators, documents, schedules, etc. The eureka moment had arrived: Other companies build our homes, and each of us works for a process company.
What does it mean for your company? If your processes are poorly designed, inconsistently executed, error-prone, or overly complicated, then your company is operating poorly, inconsistently, and ineffectively. If your processes are broken, so too is your company’s operation.
The implications are profound. If you understand this truth and focus your attention on improving the processes you use to run your business, you can make extraordinary and measurable improvements in your results.
Seven Key Principles of Process Management
Process-centered companies embrace seven principles:
1] Processes are always changing
As companies grow, as technology offers new and better ways to work, and as customer expectations change, processes become outdated, inefficient, or ineffective. Smart companies continuously examine their processes to make improvements, streamline steps, and modify roles and responsibilities of those involved in the process. “How we’ve always done it” is no longer an acceptable justification of a process. Attributes of a well-designed process are efficiency (repeatability, predictability, and scalability) and effectiveness (meeting customer needs and producing the desired results).
One of the biggest contributors to process dysfunction is organizational silos that expand and get more complex as companies grow. Larger departments with more people and more complicated procedures result in mounting tension between departments. With that comes increasingly poor communication and execution breakdowns. “That’s not my job” is heard over and over. But process-centered companies remain vigilant to ensure that the barriers that develop between departments are eliminated through well-designed handoffs.
2] Processes must be documented
Many builders can describe their operational processes in general terms, but few can produce documentation that clearly outlines the steps of a process and the job roles that carry out those processes. Working with teams, I often find that people involved in a process have no idea what happens before their activity or after they pass their work to the next department or worker. Wonderful “aha!” moments occur when teams actually map the process—and when recurring errors, wasteful steps, and poor handoffs are discovered.
3] The customer is the next person in line in the process
Homebuyers aren’t the only customers in a process-centered company. Fellow employees who rely on one another for execution of shared processes are customers of anyone they rely upon. Trade partners are customers of the construction team; they need accurate schedules and job-ready homes. One of the important activities of process improvement is to identify the requirements of the customers of a process and to measure the extent to which those requirements are met.
4] The cost of poor process quality is exorbitant
I often use the phrase “money on the floor” when describing poorly executed processes. Rework caused by error, inaccuracy, or incompleteness causes downstream effects and costs that are rarely calculated but should be. (Think about the wasted hours, delays, and material costs of installing a window in the wrong location.) Plus, process failures sap employees, who go home each night exhausted by working with broken processes instead of being tired because they got so much done.
5] Processes are best improved by the people who do the work
What often happens when a process is found to be poorly executed is that management makes changes to solve the problem. Then, they announce the “improved” process via an “Effective Immediately” memo, without ever consulting the people who actually work within the process. In the field, frontline employees roll their eyes and say, “Why didn’t anyone ask us how to fix it? We’re the ones who do the work.” Process-centered companies empower employees—the experts who work within the process—to devise improvements. Such companies provide the training and facilitation teams need to be effective problem-solvers.
6] Focus is less on product quality and more on process quality
When I was first named a quality director, many colleagues assumed that I was solely focused on the quality of the homes we built. In fact, my focus was on the processes that resulted in quality homes and great customer experiences. I paid less attention to fixing the leaky window than I did to the operational processes that resulted in the leaks. Building a home is a long series of sometimes complicated processes that must be properly executed to result in a quality product. Our job as home builders is to design and manage the processes that ensure consistent execution.
7] Best practices are standardized and made repeatable
Once a proven best practice is identified, a process-centered company devotes serious attention to institutionalizing that best practice through careful documentation of the process, effective training, and ongoing measurement to ensure proper execution and results.
There is much more to be said about being or becoming a process-centered company. What’s most important for us home builders to recognize and internalize is that we don’t actually build homes. What we do build are effective and efficient processes that enable 40 or more other companies to build homes on our behalf. It’s all about the process.