Business Process Integration at Etex
Transcript of a webinar with Paul Van Oyen, CEO of Etex Group.
Interview by Stijn Viaene, Professor of Digital Innovation and Process Management at Vlerick Business School and head of the Centre for Excellence in Business Transformation.
Last January Paul Van Oyen became the new CEO of Etex Group. With a headcount of 17,500 employees this family-owned building solutions company with Belgian roots consists of over 100 companies and almost 120 factories in over 40 countries. Etex is known for its entrepreneurial culture, product innovation and diversification. Paul has 25 years of background with this 3 billion euro company. “I’ve taken many different positions in my career ranging from projects and business development, to business process management and line functions in logistics. I spent quite some years in Eastern Europe. During my last 4 years I worked for the fire protection division and I have taken over as CEO from Fons Pieters as from the first of January.” During his career Paul has developed an interesting view on Business Process Management (BPM). Time for an interview.
What’s your general feeling about Business Process Management? I understood that you doubt whether everyone within the organisation knows what we’re talking about when we mention the word BPM.
“There’s quite some discussion about BPM. Is it a fundamental part of business or is it an add-on? Is BPM embedded in the way people do business today or is it just another management technique as we’ve had many waves over the last 20 years? That is a big challenge I think for companies to answer.”
What is the most brilliant example that you have seen in your career of how and where business process management can really make a difference for a company like Etex?
“A standard textbook answer would refer to IT or ERP where some 12 to 15 years ago Etex started to develop the technical platform of business processes. A much more exciting example is the work we did over the last 2 or 3 years. We have evolved from a budget process to a strategic business process planning which is stretching the horizon of the whole company from a 12 months perspective to let’s say a 3 years perspective. This project was kicked off very much business process driven and we’re quite proud of the outcome.”
So if I understand well you extended the use of process management from focussing on operational, centralised functions towards using process management to optimise the management cycle.
“Correct. The budget is an operational instrument that – in the past – was far too often regarded as a strategic exercise while it is not. We have introduced a 3 year strategic planning exercise, and now the budget is just the last element of the process. As most companies do we finalise the budget for the next 12 months by October / November, but it is no longer an objective of its own. It’s part of a bigger process that forces us to think on a mid-term horizon and it has really changed the way the whole business acts today.”
Has your view on process management changed now that you are CEO instead of head of a division?
On an operational level you focus on content. If you’re the CEO you are eager to create the right context for people and companies to succeed. BPM has got a lot to do with cultural change. We have in our specific company quite a strong culture. It’s an old company and we’re a rather traditional business. We have great values but you won’t be surprised that we question ourselves about the agility of the company. Are we ready for the challenges of the future? We have discovered that basically the business processes behind what we do are a backbone for us to enable us to be agile at all. Until a couple of years ago business processes were probably interpreted as being quite rigid instruments, very often associated with a top down approach of a group that tries to create value for its entities by creating standards, directives and processes. It now appears that the quality of these processes – when well established in interaction with the business – are really conditional for any cultural sharpening that one tries to achieve. So that is the way I see it now as CEO.
“Taking a company from the entrepreneurship of yesterday to the entrepreneurship of tomorrow is a challenge for CEOs these days. Big groups are often searching for entrepreneurship and yet we have it. I think we have to add the concept of business process owners at this stage. Business process development on its own is not the most difficult part of the journey. The question is how to position the BP owners in the organisation. In order to try to avoid that staff and headquarters are too closely involved with the optimisation of the processes, we have tried to position them at the business side. The business process ownership is a key element of making sure that the business processes land and are constantly improved.”
That’s a very intriguing view. Many organisations have focussed quite a bit on BPM and are now looking for a recipe to innovate. Etex seems to be doing quite the opposite. Your company has a big tradition in product innovation and entrepreneurship and now Etex is trying to add process management to the game. Am I seeing this correctly?
“Yes. But you’re seeing things a bit too much through rose-coloured spectacles. The main problem we are facing today is to make sure that the entrepreneurship is redefined. And the business processes are key for the managers to understand that this is a structured approach to for instance innovation. However, there are many other aspects where the value of BPM becomes clear, such as the face-to-face market. Innovation is a consequence of listening carefully to the customers and the market, and defining where the real value can be created. Traditionally, innovation is for the creative minds. We have introduced rather rigid processes but key to those processes is flexibility. Companies, entities and businesses understand that they keep full freedom of approaching their markets and trying to keep value, both in business and in innovation.”
How many people at this moment are working on process oriented matters?
“We have like 4 or 5 trained people who have a degree in BPM. Obviously we have not selected consultants or staff members but people from the business with 10 to 15 years of real business exposure. We have added the business process layer to their scope and we give them rather pronounced functions in the group where they really can have an impact. Ultimately, it’s about leadership capacities. Trying to get things done. Trying to create an impact. Knowing that there is resistance and change to be managed.”
What’s the biggest mistake you made over the years when it comes to BPM?
“To leave BPM aside to a couple of people who we allowed to play around with new concepts in management. To put BPM in the hands of juniors. To restrict BPM to the IT and ERP people. And in general not understanding that BPM could set the basis, the backbone, the embedded processes for a company to be successful.”
You talked about creating a context as a CEO. Can you explain what that means?
“Many industrial groups have trouble creating what management experts would call the parenting value for a group. We have an obligation to make sure that every single entity of our group is more valuable inside Etex than outside of Etex. That’s a basic law of economy. Our companies range from 4-5 million euro to 250-300 million euro which is quite a scope. You have to find ways of increasing the value and success of each of those companies by offering them tools, competencies, insights, methods and processes.
“In terms of leadership you can either take that ambition in your own hands, or you can take the responsibility of making people succeed. As head of a group I have responsibilities to set standards and to design ideal processes. If I’m clever I do that in very close interaction with the business and I use business people as business owners and so on. But ultimately I leave the accountability at the right level which means people have to be able and willing to take that accountability. And here is where the technical part of BPM suddenly becomes very soft and emotional, because we’re talking about touching the very people and making them understand that we want to contribute to the way they work and to the value creation of their company.”
Up until now you have never mentioned any specific method or tool like lean or 6 sigma. Is that on purpose?
“The selection of methods or tools is something that I leave with great pleasure to the specialists. We have some very strong lean and 6 sigma projects. However, the success of these methods and tools is very diverse. Why are some companies with the same tools as Etex successful and why are others not? Ultimately, it comes back to the leadership of people trying to implement those projects.”
Let us now look at the future of BPM. There’s quite a lot ado about the connection between digital and BPM.
“Digital is ultimately always a carrier of a process. Today we face the risk of jumping on new digital possibilities prior to having defined what we want to realise. So we take it rather slowly at Etex. If we have a strong vision on how we create value by defining our business processes and even business models, we can deduce much better what the digital world can offer. I do not hide that this is a struggle and an exploration for a company like ours but we actively bring it to the attention of the management.”
What does the future of BPM within Etex look like?
“I would like to have it off the agenda in a couple of years. Instead, I would like to have it embedded in the way we just do things at our organisation. You have to have skills and competencies in-house but you don’t want to see it anymore as a separate subject of discussion. That would be my mid-term ambition on BPM.”
Finally, what would be your main takeaways?
First of all, BPM is much more than just a couple of techniques and methods. Secondly, put BPM, BPO and business models in one bucket at a high level. Don’t leave it to experts somewhere hidden in your organisation probably in the IT sector or in the other process sectors. Make sure that BPM is at the top of the agenda of the top of the management, because BPM is a top-down choice that you are making. Third, do not underestimate the change and hence the leadership that is required to deliver good BPM results.”