To have knowledge and understanding of business process is the key for any strategic leadership
Some while ago I heard a senior executive who said there was no idea for her to take more education due to she knew what she needed to know in her organization. She had been a divisional director in her organization for almost a decade and saw no need for continuing education.
This is not the first time I hear, and this only shows that some of us may think that after we graduate we have all the knowledge we need. After we have crammed three to five years’ worth of studying into our heads (bachelor or master degree), some knowledge is still there while some just passes through our brain. Everyone who has a business education has been introduced to marketing, introduction to business, human resource management, supply chain management and accounting. This knowledge are just some basic subjects that we took, worth several credits out of many necessary subjects to graduate. Every one of us has our own favourite subject or subject we are best in. Some of the students may already know which department they want to work in while some are still unsure of what fits them best. Someone will most likely set up an own business, other will be working in a company or maybe continue studying are some of the obvious choices after graduation.
But one thing for sure, no matter where you go or what you choose to do, you will need to understand business process. As management philosopher and change agent one of the most important things I have spent my time on is to preach, teach the important of understanding business process.
Why is it so important to understand business process?
Because if you don’t, you will still become a boss or an employee, but you won’t be a great one. My contention is also the reason why so many senior and middle executives fail with their leader deeds of an inadequate understanding and interests of business processes. This we see very clearly when and organization need to implement a new Enterprise, ERP systems etc. Most of major IT implementation fail due to inadequate knowledge of business process and technology.
Technology is equal to business processes – technology is changing how information is created, stored, retrieved, and transmitted and this is equal to and organizations business processes. Business process as a whole tells you how businesses are run, what are the components that make it run and how they are interconnected. You may already know what the components or the functions of a business are since those are all the boring yet fascinating subjects that are learned in schools and campuses. But was a comprehensive and integrated view of those components taught in class? Maybe yes, maybe no. If yes, most probably the method of delivery was one-way. Hearing and listening are good but as Confucius said, “I hear and I forget, I see and I remember, I do and I understand”. Thus only when you do then you will understand. Let’s first go back to the point of why I argue that understanding business process is fundamental.
Taking a fruit trading company as an example (from the National School fruit), a marketer normally tries to promote the products as much as possible to get orders from as many customers as possible. Since that is the point of sales and marketing, to get people to buy. But when the marketers get huge orders and many at the same time, will the company have enough stocks to be shipped to the customers? The stock and purchasing department have to work hard to get suppliers to deliver needed goods on time, if not those sales will not matter since the company will not be able to send the products to customers. But how can purchasing department purchase from suppliers if the company does not have enough cash? Accounts and finance department have to manage the company’s financial condition in order for the company to survive. Yet, the other departments will keep asking for more budgets without knowing the real position of the company. All of these departments will never exist without employees working in it. These employees are managed by the human resource department that is less cared about. But if there is a problem with your work contract, where do you go? The human resource department. All of these connections have to be understood in order for you to become better at making decisions be it as a boss, manager or employee, and THIS IS BUSINESS PROCESSES. Without understanding the whole business concept, it is like walking with one eye closed since decisions made and actions taken are only based on one point of view, most probably biased towards a certain department. I believe that one of the important business qualities as a leader is to have a holistic vision. Even if you decide to continue your studies, a holistic understanding of business process will help in completing your studies and in the end after graduation your choice will still either be working or doing business.
The conclusion is that understanding business process is important for everyone no matter which path you are going to choose or you work within. There is simply no harm in deepening knowledge in this area. Instead, there are many benefits, such as being able to understand how you can change your business process and increase your organizations effectiveness. You will be able to take better decisions due to your understanding and knowledge of your organizations business process, work more effectively and efficiently since you have already known how everything flows, adapt better since you have understood the basic idea behind the functions of all departments, quicker advancement in career since you can grasp the business as a whole which is crucial in becoming higher level managers, and many more. In order to understand business process, you need to actually perform it or do it instead of just listening or reading about it as has been discussed before.