Process and Procedure

By Mark Tolman

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Process and Procedures are often presented as mutually exclusive. Is there a constructive tension between these two extremes?

Definitions

Let me define the terms to be discussed:

• Process: This is the contextual knowledge of how something works including its composite parts. For example, if someone understands the Process of Card Payments, they have a grasp of transaction processing, posting, settlement, fraud and risk management, and other component parts that make up the card payments system.

• Procedure: A procedure is a list of steps that, if followed, will accomplish a specific tactical task. For example, a baking recipe is a procedure document. It lists the ingredients required, the method of assembling those ingredients, and the expected result of following the procedure.

Process vs. Procedure

I had the privilege of participating in “the early days” of two industries: Personal Computers, and Payments. In each of these industries I found that there were two polarizing forces at work “Process” (using knowledge workers), and “Procedure” (using tactical tasks of repeatable steps).

The story line would play out like this . . .

As the industry was born, knowledge workers were the key to creating and scaling the industry. Knowledge workers could build things “out of nothing” and create processes and products that had never existed before.

However, there was a downside. Knowledge workers tended to have an allergy to documenting what they created. Documentation was incomplete or even non-existent. Support teams depended on their personal relationships with the product creators to be able to respond to customers’ questions and issues.

As the industry would mature, creating new processes became less of a priority. The goal of the company changed. Going forward, success depended on the ability to scale what had been created and to maximize returns on the investment. This required hiring more people to manage and operate the service or product – people who had not built them. In both industries, documentation and procedures became paramount. Thes tools allowed companies to hire staff with little to no background in the industry, provide them with procedure documentation, and turn them into “support teams”.

In the industry’s early days, it had been frustrating to find support documentation. As the industry matured, that frustration was matched by the agony of a customer spending hours on the phone while a support rep slowly worked through the troubleshooting procedures (PIC sheets).

Process and Procedures

It is not surprising that Process and Procedures are often seen as mutually exclusive and enemies of each other. Did that animosity really have to exist? Why are Process and Procedures seen as mutually exclusive?

I wonder if it has to do with the different priorities and goals of a nascent company and a mature company:

Nascent Company

• Workers create solutions from their knowledge of the industry and its process flows

• Trying to “birth” something that has not existed

• Tends to be the “Wild West”, attracts creative and even “rebel” participants

• Thrives on disrupters and disruption

• Focuses on “getting it done”

Mature Company

• Workers maintain and incrementally upgrade existing system based on defined procedures

• Trying to maximize return on investment on an existing solution

• Thrives on workers who find fulfillment in accomplishing repeatable processes

• Thrives on compliant staff, procedures, and metrics

• Focuses on “how it gets done”

 Lists like this can make nascent companies and mature companies look like opposites and even opponents to each other. However, each is totally dependent on the other. Every mature industry or company was nascent at some point. Nascent industries and companies are, directly or indirectly, dependent on mature companies for financial support or for creating the environment that allows nascent companies to exist and succeed.

These two are in a symbiotic relationship!

In the same way, Process and Procedures have a similar symbiotic relationship:

• Process without Procedure creates unsupportable mayhem,

• Procedures without Process knowledge create increasingly dysfunctional products and services.

• Procedures can only be effectively created when there is a good understanding of the underlying process.

• Process can only be effectively supported by well-written and well-documented procedures.

• Process needs the “restriction” of Procedures (like change management procedures) to create stable development.

• Procedures need to be regularly audited and adapted to maintain their original intent as the Process develops and morphs.

The challenge for every company is to find that sweet spot where process and procedure can co-exist with each leveraging the other’s strengths. Here are my top 5 recommendations to find and maximize the synergy between process and procedure:

1. Everybody in the company (receptionist to CEO) needs to have at least a functional knowledge of the environment the business operates in (Process). That knowledge needs to be more detailed and comprehensive the closer a role gets to setting company strategy, product development, and the C-suite.

2. Every company needs a team that breaks and recreates things related to the industry the company participates in. These are the entrepreneurial innovators who will be able to maximize the effectiveness of existing Process and create new Process that will take the company to the next level.

3. Every creative and innovative team (see point 2) needs to have “Procedure guru” team members who lead / guide / force the innovative team to document everything and break Process into meaningful Procedures. This will be a discipline that focuses the innovators and, at the same time, provides the Procedure guru team members with Process insights to fine tune the Procedures.

4. Audit every Procedure against the past, current, and future Process maps. This will help identify:

   • Procedures that are out of date (update them),

   • Procedures that do not align with where the Process is heading (align them with strategic direction),

   • Procedures that are strategically aligned for future development (celebrate them),

   • Procedures that are now orphans due to Process change (delete them).

5. Build a company culture that celebrates the progress and triumphs gained by Process and Procedure working together to accomplish more than either could alone.