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June 27, 2007

When Business Processes Fail: (Grounded) Planes, (Poisoned Toy) Trains, and Transparency

According to a recent story published and posted online by the San Francisco Chronicle, 400 Cathay Pacific Airways passengers sat on a flight for more than seven hours – before the flight was canceled. Several passengers reportedly said that they received no information for at least three of those seven hours, and that when the flight was finally scrapped, there were no airline representatives to help disembarking passengers with rebooking. In contrast, the airline, according to the article, "described the evening as something akin to a well-stocked slumber party while the crew scurried to find a part to fix a mechanical problem."

Well. A slight difference in perception there, eh? Some process alignment might be in order here.

In a similar vein, on June 13, the U.S. Consumer Products Safety Commission (CPSC) announced that RC2 Corp. had begun a "voluntary" recall of 1.5 million wooden "Thomas the Tank Engine" toys that had somehow been decorated with toxic lead-based paints. RC2 – providers of "compelling passionate parenting and play for all ages," according to its Web site – is an Illinois-based company with manufacturing facilities in China, where the tainted toys were reportedly made. (Just today, National Public Radio (NPR)'s "All Things Considered" program reported that an inspection by China's General Administration of Quality Supervision, Inspection and Quarantine had discovered 23,000 cases of bad food and closed 180 factories.

On June 24, the Chicago Tribune reported that a complaint about lead paint on some of the company's metal Thomas toys had been filed in 2006. The person who filed the complaint with the CPSC never heard from that agency, and RC2 says CPSC never notified the company about the complaint, as required by law. Other than that, and saying that it had "reviewed all relevant manufacturing procedures" and found no other products that exceeded safe lead levels, RC2 has basically stonewalled.

My question is, has none of the leaders of either Cathay Pacific or RC2 ever heard about the Tylenol poisoning scandal that made worldwide news in 1982? Cyanide-laced Tylenol capsules killed seven people, but the company recovered. How? New technology – tamper-proof packaging – and big-time, public apologies and active leadership by senior executives.

So what can we learn about BPM from these incidents?

1. Bad processes and bad process management create significant risks – financial, operational, and reputational. Reputational risk is the hardest to quantify, but can be the most significant and damaging overall.

2. Every business process and process management initiative affects one or more constituencies. Those constituencies deserve and require clear, direct communication about what's happening and why, what's expected of them, and what they can expect. This is in addition to any "marketing" and/or "sales" necessary to win support for the initiative.

3. If you break something – or if something breaks on your watch, even if it's not your fault – apologize. Then explain what you can, and take responsibility for fixing it, getting it fixed, and/or communicating frequently about progress toward resolution.

4. Ensure that all BPM efforts include and support goals of accessibility of decision-makers, clear, consistent communication, and transparency. Your life will only be easier as a result. And if things go really well, such practices will find their way into other aspects of your company, if they aren't there already.

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