Consistent global processes add value—up to a point. New research helps companies find the right balance between consistency and flexibility
Management processes—everything from how a company manages risk to how it gets supplies for factories to how it manages and develops people—are some of the primary ways that global companies impose order and consistency on a diverse set of global operations. 85 percent of the more than 300 executives we surveyed believe that processes help them share knowledge across divisions and regions, and executives agree that seamless delivery and service processes can be central to meeting customer expectations1. In a world where the pace of competition is increasing faster than ever, best-in-class processes can create competitive advantages in areas such as innovation and risk management.
But our research also shows that global companies are particularly poor at managing their processes. In our survey of executives, processes emerged as one of the 3 weakest aspects of organization out of the 12 we explored. Strengthening them is crucial. However, executives often don’t know where to begin. Often, they have far too many processes: one oil company, an executive told us, had 30 different processes for the simple act of folding a seat on an oil rig. Sometimes, especially when their company has grown by M&A, executives don’t even know what their processes are. Other problems include allocations of authority between central and local leaders that no longer reflect economic reality; the ways that information and communications technology, for all its help in standardizing processes, also freezes them in place; processes that don’t reflect new customer needs such as product-focused sales forces that don’t sell integrated packages; and, perhaps most intractable and ignored, resistance to change.