The challenges collaborating with others within your company and even people outside your company can ultimately undermine your effectiveness and efficiency.
If you find yourself panicking because Jane from Marketing is taking a 3-month sabbatical to travel the world, then you either love her too much or you have no one else to replace her. That is when you should realize that you have a key person dependency risk.
In this blog, we will discuss the meaning of People VS process dependent businesses and their difference. But first, how to know if you have a people or a process dependent business and Bottlenecks? And what is the best way to proceed?
People VS Process Dependent Businesses:
The flow of your business operations defines whether your business is successful or not. In many companies, these business operations tend to depend on people, especially if it is a small or medium business that is still starting. These companies tend to be people dependent in the sense that they have a key person, in most cases is the CEO or the founder, who carries out most operations and to which tasks are centralized. This phenomenon can exist in larger companies on the departmental level.
Therefore, people dependent business operations are defined as business tasks that require a specific person with distinct skills or knowledge –and generally, a level of seniority within the company to be done.
On the other hand, Businesses may have a different approach based on standardized processes rather than key people within the company. We usually find this mindset in larger, particularly global companies as they have had their time to create and test the different processes. Eventually, these companies can claim to have come to a level of standardization. However, any company can be process dependent in its operations providing it creates a flow of tasks and specific descriptions for each task. That way, the people assigned could be switched comfortably without hindering the flow of the operations.
In that sense, process dependent business operations are pre-defined, valuated, and standardized business tasks.
To figure out the difference between people dependent and process dependent businesses, we should look into the workflow of each one of them.
The Different Types of Dependencies Illustrated:
To keep it simple, let’s take an example of two companies, A and B, that sell apple juice. Each has five employees assigned according to the type of operations.
Suppose company A is a people dependent business. As you can see from the representation below, the key person is Jane since she manages most tasks and approves the final output. Say, for example, Steph gets ill and is absent to work, step 3 would not happen as there is no one forwarding to Jane. Since Jane is too busy with the other tasks she would overlook it. Eventually, the work would stop. Worst case scenario, there would be no stock of apple juice left, causing an operational shutdown and huge losses.
Company B, however, is process dependent. That is why in the illustration you would find steps represented by boxes of tasks and not people. Each different task is defined by a set of steps and specific background knowledge. And as you can see, the steps, in this case, are way less, compared to the first example so they can produce more apple juice using fewer steps. If the person who performs task 2 is absent, they could easily be replaced temporarily by another person since there is a predefined list of tasks and knowledge within that specific task. This methodology is more efficient, especially in a fast-paced environment.
To find out if your business is people vs process dependent just take away one person from the steps and see if anything goes wrong. Generally, key-people in the business are very easy to spot too since they have great input into the workflow.
Now that we understand the difference between people and process dependent business, we can look into the bottlenecks of each one and find out how to avoid them to have a successful business. Intuitively, you may say that a people dependent business is doomed to failure since people are such a non-constant factor but a process dependent business also has its negatives.
The Limitations of each Dependancy:
If the business operations are people-based, and especially key person dependent one might have issues with:
– Longer business process: Over centralization of tasks which could make the business process longer
– Loss: Risk of potential loss if the key person leaves without passing on their knowledge
– No source of knowledge: Key person is entitled to the knowledge that they hold and could take it with them when they leave
– Time wasted: Each new person will need time to determine how to do their duty. That is time wasted.
For a process dependent business, the different bottlenecks that could arise are:
– Resistance to change: Having a set process may make it difficult to change and adjust to changes in the business industry
– No personal input: When a new person comes in, they already have a specific list of tasks that they can perform and have no margin to put their print on the work
– Trial and error: Achieving a process dependent operations chain takes a lot of trial and error and many years to reach
– Automated workflow and lack of human connection
As you can see, both types have different bottlenecks and challenges. The best way to do things would be to combine the flexible way of doing things by relying on people and the standardized way by following a process.
Moving Towards a Dependency-free Operational Setting:
The optimal way to combine both is to make use of the technology that we have nowadays. With the emergence of new software catered for every department in the company, it has become easier to join the flexibility of a people-based approach and the structured way of a standardized process. With the implementation of software, whether it is for Marketing, Supply Chain, or Finance, it is always important to keep in mind the nature of your business.
At the end of the day, it is up to you to define how much of each that you need in your business. Are you a manufacturing company that needs more rules and standards? Or a film production company that relies on what people can bring to the table? No matter what it is, next time Jane from Marketing takes a vacation, the only concern you should have is whether or not she will bring you a gift from abroad.