FROM PYRAMIDS TO MAPS
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FROM PYRAMIDS TO MAPS
FREDDY VILLAVICENCIO, SIG Leader, Business Consultant, Venezuela
Entrepreneurial activities are so important for any country. Identify, list and understand the business essentials to make it profitable and sustainable becomes a challenge to grant country development and people´s prosperity. Let us define entrepreneurial activity in order to set everyone into same page. “It is a productive initiative which requires a team of talents coordinated and infrastructure to achieve an objective into a predefined timeframe”. This way the concept have a wide scope.
Along this article the reader will find a business management approach to strength any entrepreneurial activity. The proposal consider the following five Business Essential elements:
1. Social Accountability or legal paper work must be done before the operations starts. Taxes, labor contracts, safety & health and other technical requirements which can stop the operation and some penalties can make it worse.
2. Profitability & Sustainability are both requirements of any kind of business initiative. Identify, priories and define critical control points in order to both deal with adverse market conditions and schedule resources to grant entrepreneurial activity. It is commonly called Strategical Planning.
3. Efficiency and Productivity are both key process indicators of any kind of business initiative. Both are directly related with operational cost. It is very important to tune up and synchronize product´s sales budget with entrepreneurial activity´s internal processes. It is commonly called S&OP.
4. Talent and Knowledge management sooner than later make a difference to launch business initiative from startup mode into growth mode. In order to compete into globalized markets talented team members are preferred. They will perform better if are capable to manage, plot and analyze processes data as a way to build scenarios and make better and accurate decisions.
5. Business Structure set both livinghood model and define critical activities to make the productive chain perform into profitability and sustainability specifications. There are at least two choices of livinghood model Subordinated relationship (Pyramidal-departmental) and Interdependent relationship (Process mapping). Each of them have strength and limitations.
Pyramidal sort of business structure is widely used to describe graphically the way to interact into most organizations worldwide. ISO NI 9000 series introduces a new mindset in 1994 called Quality Assurance together with business process mapping. Nowadays the concept evolves to Quality Management Systems since ISO 9001:2000 version. The way to graphically represent a business using the QMS international standard is a chain of interdependent processes instead pyramidal & departmental structures.
Nevertheless, pyramidal structures prevails as a most common style to describe any organization. There are so many reasons or facts that helps pyramidal structures to stills. Process mapping are not able to shows at a glance authority levels, just to mention a single detail which could create chaos in a busy day if people are not clear who is in command.
In other hand, the pyramidal model have a main limitation as business core activities are not clearly shown creating reworks and some other kind of resources misuse. Efficiency and Productivity are compromised using this model. Another issue could be related with subordination livinghood model. Under this sort of relationship and adding business core activities are not clear, team members miss focus their efforts and synergy is shut off.
Process maps instead shows both main processes and critical activities at a glance and introduce a livinghood model based on interdependency. Process flows interlinks activities and team members. Departments are no longer part of business structures, goals and objectives are now and invitation to work as a coordinated team
Based on mentioned before both models are antagonist regarding livinghood model (subordination against cooperation) and complementary regarding the way to show authority level (pyramidal strength) and business core activities (process map strength). Process map might be more cost effective than pyramidal (avoid departmental reworks), process map might facilitate S&OP task, process map might reduce KPI´s dash board focusing on value chain performance rather than departmental performances.
The proposal to move from pyramidal model to process map is a predocumented business administration system compounded by three elements. Business Essential Interphase + Business Structure mother board + Authority codes interphase
Business Essentials interphase offers a set of elements to compass business strategy and align it with internal processes. Three different blocks of elements as a guide to develop profitability plan, sustainability plan and innovation & continuous improvement environment.
Business structure offers a predocumented process management system. All business initiatives have similarities as purchase orders, resources schedules, payroll, and maintenance activities. Predocumented and proved process management system is a time saving feature and startup advantage.
Authority codes interphase make the bridge between interdependent activities and authority levels. The interphase classify activities in six different levels from top to bottom: Define, Assurance, Planning, Coordinate and Operate.
The approach enables entrepreneurs to focus on what they do better (push and push), predocumented feature is a time saver and make the startup stress less (just a little it isn´t a magic stick) for team members, authority code interphase allow to discard pyramidal models completely.
Details will be shared in different article, comments are very welcome.
Remember to smile and proudly give your best in every single mission. .
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