In the first post in this series, we discussed the definition of process. In that post, we also introduced the idea that every process contains three layers, which must be defined in order to gain a full understanding of what a process is.
The three layers are:
- Value chain
This three-layer model, also known as the “Cavi Process Improvement Framework” (CPIF), is fundamental to Cavi’s process improvement method. These three layers always exist together, so when you refer to “process” without specifying a particular layer, you are in some sense talking about all three.
The following diagram illustrates these three layers of a process:
We can only ever see the workflow layer, which takes place in our physical environment and implies our “direction of discovery.” But every workflow is based on a process design (even if it’s not formally articulated), which is the theoretical, planned sequence of activities that someone came up with to meet a particular objective. The best way to work directly with the design layer of a process is to visualize it in physical form, typically by creating a process document (i.e. a “process map”).
Although the workflow comes from the design, these two layers will always be different in practice because even the best planned process can only be actualized in the physical world to a certain degree of accuracy.
Let’s take growing fruit as an example. A farmer can design an optimal plan to share with his staff, including how and when to fertilize, water, and maintain the trees. In practice, the workflow will be extremely complicated, with variation occurring daily based on shifting staff, weather conditions, health of various trees, infestations of pests — the list goes on. As soon as a process design is enabled by workflow, it changes, because in physical reality, things are more complicated than can ever be accounted for in design. Also, the longer the two layers are left without attention, the more they will drift away from one another. We’ll see this same natural variation occur between all the layers.
Just as the workflow layer is informed by design, the design layer is informed by an underlying value chain layer, which describes the objective and foundation for an effective design. This layer is also theoretical, but unlike the design layer, it is inherent to a given environment or market configuration — you don’t plan or create it. Fluctuating environmental and market conditions create value chains that allow for the mutually-profitable exchange of energy between entities.
For our fruit farmer, the natural differences created by geography-based growing conditions create a market and associated value chain for fruit trade. The opportunity for value creation exists of its own accord because some people will have a lot of fruit and be willing to sell it, and others will experience scarcity and be looking to buy it. As a result of the exchange, both sides receive positive value. The goal of understanding a value chain is to understand the opportunity for value creation and design the most effective process to capitalize on that opportunity.
The relationship between the design and value chain layers also differs, often more significantly than the difference between workflow and design. The value chain layer depicts only what steps create value (or as an intuitive proxy: what a customer is willing to pay for). If process could be perfectly designed to fit the value chain, there would be no waste (cost without value creation) and the entity would be operating with perfect efficiency. However, perfect value creation is not physically possible due to real-world constraints (i.e. physical, people, policy, project), so process designs must be glued together by some forms of waste if they ever hope to be enabled through physical workflow. Often, due to these differences between the value chain, design, and workflow layers, by the time people are doing the work they have lost sight of the original value opportunity. Startlingly, studies have shown that many business processes only produce value roughly 5% of the time, while the other odd 95% of the time they are either producing waste or executing necessary (i.e. regulation, compliance) non-value adding activities!
To summarize this Cavi specific, three-layer framework: process starts with a value chain that exists due to scarcity and varying environments. To capitalize on a value-chain opportunity, a process design is made which defines what steps need to happen to create this value. Finally, the enablement of the process design in the real world results in a physical workflow. There will always be variation and drift between the layers, which–if unmanaged over time–can cause incredible cost and complexity within your processes. If, however, you can understand the layers and their relationship to each other, then you truly understand the definition of “process”.
In our next post, we’ll introduce the Cavi Method around how to practice process improvement with the CPIF as a foundation. This will continue the discussion of value, as well as how to use the “three layers” concept to achieve consistently superb results on your project work.