In my last post, which you can read here, I touched on the idea that while implementing good processes and systems of internal control are a key factor towards growth in organisations — we need to be careful to understand their purpose and the results which we expect from them.
While processes are necessary in small and large organisations alike, depending on how we view them, they can also become quite detrimental. This is because we often start to view a process or system of controls as a substitute for more abstract concepts that are difficult to measure. This creates certain problems. In order to avoid this when designing processes, always keep in mind that:
- Process is not a substitute for improvement — When we spend too much time following protocol we don’t find time to focus on improvement. If you find yourself in this situation, you won’t improve fast enough in order to keep up with the market. Processes should create more time and slack for important activities, not less.
- Process is not a substitute for judgement — There will always be aspects of business that involve judgement. When we try to remove too much judgement from business decisions through elaborate processes, over time we reduce the capability of those within our organisations to make adequate judgements. Processes are there to produce the information required in order for one to make good judgement calls, not make the judgement itself.
- Process is not a substitute for integrity — In today’s complicated business world we have rules upon rules, upon rules. Because we have so many rules, we need processes to helps us navigate them. Playing by the rules and acting with integrity however are not the same thing. Similar to the above, one’s processes should enable and empower one to act with integrity as opposed to simply dictating specific action.
While improvement, judgement and integrity are all different concepts, there is a common underlying theme in that they can all be difficult. Sometimes acting with integrity requires backbone, making judgements involves the risk of getting it wrong, and driving improvement involves the risk of failure. Doing these things can be scary and they often require more energy and effort than the alternatives. This makes it all too easy to fall into these traps.
What is the moral of the story? Design your processes to promote these principles, rather than obfuscate people’s accountabilities for them.
In my next post, I touch on the importance of defining and communicating purpose, as part of effective process design.
Jared Davies Coleman is a Chartered Accountant and Leadership Representative at Nona Creative — a full-service digital studio in Woodstock, Cape Town.
Nona designs and builds intuitive software for FinTech businesses. If you’d like to accelerate your FinTech project, book a consultation with us!