On the face of it, the need to maintain high quality of processes would seem obvious. To understand
why good process quality is the exception, not the rule, requires a close look at how processes
are designed and what happens to them over time.
First, the design. The western business organization model, for reasons of history, has evolved
into a hierarchy of functionally specialized departments. Management direction, goals, and measurements
are deployed from the top downward through this vertical hierarchy. However, the
processes which yield the products of work, in particular those products which customers buy (and
which justify the existence of the organization), flow horizontally across the organization through
functional departments (Figure 6.1). Traditionally, each functional piece of a process is the responsibility
of a department, whose manager is held accountable for the performance of that piece.
However, no one is accountable for the entire process. Many problems arise from the conflict
between the demands of the departments and the demands of the overall major processes.
In a competition with functional goals, functional resources, and functional careers, the crossfunctional
processes are starved for attention. As a result, the processes as operated are often neither
effective nor efficient, and they are certainly not adaptable.
A second source of poor process performance is the natural deterioration to which all processes
are subject in the course of their evolution. For example, at one railroad company, the company telephone
directory revealed that there were more employees with the title “rework clerk” than with the
title “clerk.” Each of the rework clerks had been put in place to guard against the recurrence of some
serious problem that arose. Over time, the imbalance in titles was the outward evidence of processes
which had established rework as the organization’s norm.
The rapidity of technological evolution, in combination with rising customer expectations, has
created global competitive pressures on costs and quality. These pressures have stimulated an exploration
of cross-functional processes—to identify and understand them and to improve their performance.
There is now much evidence that within the total product cycle a major problem of poor
process performance lies with process management technologies. Functional objectives frequently
conflict with customer needs, served as they must be by cross-functional processes. Further, the
processes generate a variety of waste (missed deadlines, factory scrap, etc.). It is not difficult to identify
products, such as invoice generation, preparation of an insurance policy, or paying a claim, that
take over 20 days to accomplish less than 20 min of actual work. They are also not easily changed
in response to the continuously changing environment. To better serve customer needs there is a need
to restore these processes to effectiveness, efficiency, and adaptability.
The Origins of PQM. IBM Corporation was among the first American companies to see the
benefits of identifying and managing business processes. The spirit of IBM’s first efforts in managing business processes in the early 1980s