Process Decay is a chronic condition in almost all organizations and can be a significant invisible contributor to overload and turmoil - i.e. Bad Chaos. Do you feel your organization is burdened by inefficiencies that hinder progress? This episode sheds light on the concept of "process decay," a pervasive issue where outdated, redundant, or misaligned ways of working silently drain 20-30% of annual revenue while consuming significant employee time. With compelling examples and research-backed insights, this episode highlights how ineffective processes can bottleneck operations, increase frustration, and reduce compliance. By streamlining and modernizing workflows, you can cut costs, improve morale, and reduce frustration. Start by identifying bottlenecks, engaging end-users, and leveraging AI tools to pinpoint issues and simplify workflows. Think of processes as a well-organized coat rack—supporting the team without being a burden. Addressing process decay isn’t just maintenance; it’s a step toward sustainable growth and resilience.

About the Host:

Your host, Maartje van Krieken, brings a wealth of experience from the front lines of business turmoil. With a background in crisis management, managing transformation and complex collaboration, she has successfully guided numerous organizations through their most challenging times. Her unique perspective and practical approach make her the go to First Responder in the arena of business turmoil and crisis.

Podcast Homepage: https://www.thebusinessemergencyroom.com/

https://www.thechaosgamesconsulting.com/

https://www.linkedin.com/in/maartje/

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Maartje van Krieken: Hey, thanks for tuning in. I'm glad to have you here today. It's just me on another important subject. Today, I want to talk about process decay. Process decay, to me, is totally one of those things that contributes to the plaque buildup in our corporate arteries and contributes to chaos, and is usually also a major underpinning factor of why your organization is in overload and hence maybe struggle to deal with the challenge at hand on top of everything else. So let's get to it the main pain. What do patients present with when we're talking about process decay, well, it's a real pain point, because the cost of inefficiencies is huge. So 20 to 30% of businesses annual revenue is lost due to inefficiencies and processes. According to IDC research, it's also true that employees spend at least a quarter of their time on handling unnecessary admin tasks and information and inefficient systems etc, a quarter of their time, which correlates well with the 20 to 30% annual revenue loss, then the impact of workarounds, so dealing with processes that are not doing what they do is very common. So almost 70% of employees admit that they don't follow processes and deploy workarounds, According to Forrester Research. And then, to me, the most staggering number of all is that the average organization has more than 900 unique business processes, more than 900 so I would easily say that if there is on average that many, that there is too many, and that many of them are outdated, or probably even redundant. And this comes from a study done by Gartner.

So you might say, well, Maratje, you love chaos, and you've told us before that you're not necessarily a rule follower. So what do you think of processes in the first place? Well, safe to say, I'm not very good at following processes to the T at all. Probably that's got something to do with that 900 number, because if processes don't serve me, I'm not really good at following them, and I'm one of that 70% for sure, who creates workarounds. I do, however, totally believe that we need processes in business. But to me, a process should be like a coat track. It should be something that aids and that you almost don't notice that's there, but that helps you do certain activities in a certain order and in a certain manner, so that it facilitates communication, that it facilitates compliance, that it facilitates all the good things that processes brings, and why, I think the the example of the coat rack is so apt here is, well, I'm I'm a mom with three teenagers, and we, we in our house, we live very busy lives. So a coat rack or a mud room, if it's well placed and working, then people come in and put their coats and their bags and their shoes exactly where they should go, and so nobody notices, right they go in the right place. And also friends or other people who come and visit, they come in and they should realize, within three seconds, flat, without really needing to think about it, where to put their bags or their shoes or or their coats. Symptoms of when that stops working is that there is an overflowing coat rack, and so the coats end up on the chairs or on the sofa or on the floor when there is not enough space for all the shoes, and so they're all around the house, or when the place to put everything is not anywhere near where people come in, and so their shoes now by every door or everywhere else in the house. There's also maybe so much on the coat rack that by the time winter comes, I live in New Orleans, we don't have a lot of winter, so by the time I need that one puffer jacket that I have, I don't even realize I have it anymore, because it's the bottom and the last hook on the rack. And so I forgot I have one, and I'll happily go out shopping for another one that by the time next winter comes around, we'll have made it also again to the back of the code rack, and so I'm not using it. So these are symptoms that the code rack doesn't work. But if it does work, it crazes magical flow in the house, and everybody can find their stuff without it cluttering up the whole house, right? All the bags, the shoes, the sports gear and everything else. So yeah, I totally believe in processes. Yes, and I totally see the pain that process decay offers, right? So if we can't find our stuff when we need to leave the house and we're in a hurry, then it leads to delays. Everybody's frustrated because they can't find their stuff, or the house is a mess, or things are everywhere.

And so there is, cost increases, there is time delays, all the standard symptoms that you also see unfortunately from other things. So onto a very practical business example. This is a golden oldie. This is a few decades ago we were trying to implement e procurement or automate buying processes for offshore operations in the North Sea. So these are mature operations. There's a quite a lot of offshore platforms in operation, and they place orders from offshore for stuff that they needed. And so we were looking at the high transaction more procurement based contracts to start with for automation, because it was clear that that was not running efficiently, that we were not seeing the data, that we couldn't really track how well any of that worked, and that there was ample frustration and time consumed in that process. So let's automate, right? We ran into so much resistance to actually get started at that end of the process, which was intriguing, because that's also the end where all the frustration came from. So everybody agreed it was the right place to look but as soon as we started talking to the people directly involved who were working those processes to kind of get the map of the steps we ran into that resistance. So that was intriguing. We did finally manage to get some people around the table, and effectively what we found out is that these contracts, or the main contracts with the biggest dollar volumes through them, or the pound volume in that case were not actually working as intended at all. At some point, there'd been a whole strategic supply chain review, and a bunch of different purchasing agreements have been set up with a set of suites of different contractors or vendors, right? And, yeah, they all had specific scopes in their contracts. They also probably had been giving us prices on the basis of, probably not Yeah, promised or proposed volumes. So somebody had probably looked back at what we'd been buying and then said, Okay, if we, if we put all the buying around nugget X or bold y with you, then this should be the volume. So we want you to price on that basis, and in return, what if you you are awarded the contract, we will guarantee that all the platforms will buy X from you and y from you, because it's in your contract.

So basically, in an attempt to not have three different contracts for the same scopes, to get quantity discounts, etc, things had been consolidated, which meant, apparently, in reality, that offshore, if people needed to buy stuff for a specific job, they of course, ended up with a little shopping list right for that specific project or that specific scope. And then it turned out that the way the contracts were set up, inevitably, they would have to source that from more than one vendor. So they would have to go in and put in a bunch of forms to then qualify and quantify what they needed, and then it was going somewhere else, and then it would get sourced from different vendors, and then it would show up in different different timings, not at the same time. So they would be sitting offshore with too much material, because spaces at the premium so too much material for jobs that they couldn't get started because they didn't have all the bits and pieces for it. So what happened is that all these contracts, or of the bigger ones had a line item in them, a cost plus line item in them, and some contractors had made smart use of that and offered their service, saying, under that line item, I can buy anything for you and then just provide it to you for a markup.

So imagine that vendor, A is selling the vegetables, right? All the the potatoes and cucumbers and carrots, and then says, Wow, I can also provide you sausages. I'll just buy them at the butcher, or whatever butcher, because they can go then to whoever they want. I'll get them from your preferred butcher, instead of from the butcher contract that the company says you have to use. I'll get exactly your kind of sausages, and then I'll just sell them to you for 10% markup, as per the contract, so that you can get them at the same time as the vegetables and make your dish in one go. And that's exactly what happened. So large volumes for different jobs were going through a few contracts under these markup clauses, meaning that there was. No visibility on what was being bought, that we were not making good on our promises for volumes. But some of these contractors hadn't made that clear to us, or some of these vendors hadn't made it clear to us that they weren't getting the volume on bold number x or not number y, because they were making way more on the back, the back end, providing way more scope through a markup clause, right? And having really happy customers offshore who were just getting all their stuff in one go and in one package. So operationally for them, also much more useful. Clear example where, yeah, probably a more efficient system came out of the workaround, but leading to lack of insight, and, yeah, an unwillingness to then actually optimize the system and automate it, because that closed the door on that, and showcasing that there was probably a whole admin process in place. Because, of course, the solution wasn't, wasn't also known to everybody, so there was others who were using the inefficient system to maintaining a whole suite of contracts and the associated administration that wasn't working for the offshore organization.

So yeah, and safe to say that this is not unique at all. So what are some of the symptoms, then that you have process decay going on. Well, what I would look for, and the vital signs that I would measure, is bottlenecks, right? If you have bottlenecks in your operations, yeah, things not flowing through the way they should, is that, potentially due to processes no longer working. Do you have rising error rates? Do you have declining compliance? Do you where? Where is there frustration, and do people push back if they're being asked to do certain things? Where are you lacking insight? Do you not have transparency or discrepancies in the numbers you receive right in the example I brought up to you, you can imagine that, uh, yeah, there should have been somewhere a flag going up saying we're not actually, we've put these contracts in place assuming we would need annually 20 bolts, number y and 17 flanges type Z, and we're not buying them, right. There should also be reports that say that would have showcased that all that spending is sitting against this one line item in the contract when you've gone through the effort to itemize everything in there, if you Yeah, the logistics team should have flagged that there was a challenge there, or or maybe it was visible there, that there was a frustration about lack of space available ashore, that that was an increasing problem, right? Because people were getting partial orders, and it's all sitting on the deck waiting so that still everything's there to do the job so that somewhere in the system these pain points will have come up. And so by asking you, will no doubt find those systems around, symptoms around so, yeah, safe to say that in this case, there was definitely process decay, evidenced by a major workaround being put together. So process decay, to me, occurs when systems that were one sufficient no longer serve your business, right? It's like an old machine, and it might still run, but at the fraction of its potential, and it's causing breakdowns along the way. And yeah, the main root causes are the fact that we don't review these processes. Aren't sexy people that are not that interested in reviewing processes and amending processes. Clearly, if there is, on average, over 900 to content with, it also feels like too big and too impossible a job. Probably then, yeah, clearly in the example I brought forward, there was also misalignment between the processes and the current business needs, and sometimes there's also no process. So a short term solution is put in place, and then there's never time to actually create a process. And so the short term fix becomes the permanent setup, but that might be actually very inefficient, or it might have served you when it was an incidental case where you were doing that specific activity, but now that it's become the backbone of your business or a more daily occurrence, it needs a different approach, yeah, and not keeping up with the change. Right? These contracts were set up at a time and then, yeah, no periodic review to update and amend.

So do you have process decay? I'm afraid to tell you that even if I don't know your business and haven't been inside, I can tell you that it's another chronic. Addition, every business has this issue, and the good news is it can totally be reduced to manageable levels, but it's typically a major contributor to chaos and disruption, right? It's part of that silent build up, or that quiet build up that maybe by itself, it doesn't feel like it's something that's driving your business to the edge of the cliff, but once you're at the cliff and we're trying to get off it, it's very clear that part of the build up that got you there is has to do with process decay, and so, yeah, a topic to address. So what is the intermediate intervention? There is a two, two level of tackling here, if you're at the cliff, and we establish that your that process decay is really part of the immediate problem, right? So we're in unsafe situations, or, yeah, your business has totally stopped functioning in a certain aspect, or you have a plant down, or operations have halted in areas, or other immediate emergencies, you might want to consider a pause on a specific process, right? And rather than let people continue on and create more of the wrong kind of output, so more safety, instance, or more faulty products, or, yeah, more claims with customers, or whatever it is, the situation could, I would say you really need to pause if you're more in the the space where you say, okay, process decay is definitely a huge chunk of what holds us back at the moment and what which brought us to the current state of overload. But there is not a unique process that's disrupting or you're not at emergency room visit level status. Then I would start really with the quick fixes, because that is what creates space and time to look at the rest clearly, if we're having 900 business processes, there are some there that maybe still sit in handbooks that are not even used, that you can identify in three seconds flat, right?

There is, no doubt, a few processes that you can name that are there that don't need to be there. There's also a bunch of tasks that your employees, or you no doubt, can identify, that don't really need doing. And if you create the space to say to people identify the 10% of your daily activities that you believe least needs doing, and look at those. Everybody can come up with some suggestions. If you push them to 20 or 30, it's going to become harder, but that there is a low hanging fruit there, and what you need to do is ask for it, right? So, yeah, look back for audits, look for for discrepancies, look where the bottlenecks are. So go back to some of the symptoms. Where are the frustrations? Where are the bottlenecks? Where is the lack of transparency? Or where do you have, for instance, conflict in data reporting all the time is that because you're running too many different reports, and they're all coming off different data sets or going into different reporting lines, and is there a consolidation there? So yeah. And then last but not least, have a look at your approvals decision making. Again. Have a think, if there is a quick 10% list you can come up with of approvals or approval steps that can be cut out of the system, because No, nobody's going to look at 900 processes, and so you need to call that back to some stuff you're not ever going to look at again, because it's redundant. Right? Then the more longer term treatment plan has some more strategic steps in it. Yeah, this is a chronic condition, and so it also needs a sustainable treatment plan, right? This is a subject that needs attention always, so periodic process reviews, right? I've talked often about the fact that I believe we need to do some kind of health check or cleanse regularly to strip out the stuff that doesn't serve you and that we should stop doing, because we add stuff that we start doing at such a much higher frequency than that, we take stuff out of the system, which is impossible to keep up right engage the end users. So in the example that I put forward, it was very clear that those original contracts, when they'd been set up, really made sense on paper, from a from a procurement and an efficiency and a savings perspective, consolidating the numbers of parties that you're buying from, consolidating the. Number of contracts that the business had, sourcing things only from one person, but then having much stronger relationships with these vendors, getting the quantity discounts, etc. All of that was built in. But what wasn't built into those contracts is how the end user, which is the offshore teams, were using these contracts, and what was also not really reflected well in these contracts is how the logistics for jobs like this worked.

So the disconnect in ordering things from different places, and hence things not being delivered as one package, was a real big deal, right? And that been left out. So if you put processes in place, and particularly these much bigger projects, but I think in all of it, but in these big integrated projects, you really need to look at the whole life cycle of all the steps in the process and make sure that you work through an exercise like that on paper, right? So in this case, if they would have, you know, they could have come up with a smaller team on the design of how this all would work, but then they should have invited in those offshore users and logistics users. Okay, if we now set the process up this way, walk me through it. How would you use it? Right? And where do you then see issues and pain points arising. And I think you cannot prevent everything, but a lot of the pain could have been prevented. So engage end users. Engage end users to improve your processes or to strip them down, strip out the unnecessary steps, but also, where are the biggest processes that are not working for your organization, and use it as a prioritization, right? I don't you're not gonna review 900 processes. So which are the processes that are most critical to your business, which are the processes that create the most frustration currently the way in operating and the most is most inefficiency in your organization, and which ones have the biggest risk and or dollars amounts associated with them. And so in that overload, lay of those three influence spheres. So which ones are most critical to the operations and the being the most central to the being of your business? Which ones have the biggest risks and dollars attached, and which ones create the most frustration are most inflamed, maybe we should say in this context, and start there right and then gradually work your way through process. Improvement should be kind of a standard part of your business. If you have some individuals working this at any point in time, or have some capacity in your organization at any point in time to steadily work through this then, yeah, I think in time you can maybe reduce the capacity some, because you'll get better at it and can prevent a whole lot of challenges. And trust me, you can find people who love processes, who really love processes, and who love helping others make an actual code wreck that works right, rather than deal continue to work with the one that's overflowing. So invest in tools and training to and I'd say the biggest new tool that we have in this to identify where you start, and what you can do is to deploy AI, because AI can help you identify where some of the discrepancies sit. It can deal with you could plug in your processes. It will tell you which ones don't talk to each other, where all the discrepancies are. And with a little bit of help, you can actually run the analysis where the biggest gaps and challenges potentially are, or at least give you a course output list that you can then with a with a team, narrow down to the ones that really matter. But if you want to lay out the land, that's a good start. Alternatively, you can also use AI to to develop your business processes. Right? If you are growing business and you're starting to some new activities. Then, then dictate what it is you're trying to achieve, and ask it for examples, or feed in also the other processes it has to interface with, or put in your draft process or procedure, and then ask it to run an analysis on it, saying, Where could this struggle or go wrong. Or which stakeholders should I invite to review this? Yeah, to test where it goes.

So dealing with a huge volume of static data, AI is fabulous for that, so I would use it totally in this context. And Yeah, happy to help you do that, or get started with that, of course. So then that brings us to monitoring and follow up. I think once you get in the habit of actually looking actively at your processes, yeah, we talked about you need some formal, regular health check, and this goes in. In line with the the information inflation we talked about with your your decision discipline or hygiene. So these are some subjects or topics that I really feel together as part of a regular health check. You really need to look at them with your leadership team or with with your own team, and kind of have the conversation with so how do we feel we're doing? People have a good idea on this. They have a good gut sense on whether you've been sliding and not been so disciplined, because it's simply been become too busy again, right? But yeah, and hence it needs more focus. It's a conversation you need to plan and that you need to have, and also make sure that it doesn't get de prioritized off, right? If you are interested in pursuing this subject, I have a proprietary chaos cleanse assessment, particularly with the eye on the New Year. I can help with an easy system, an easy process to also implement this for you, and give you some ideas on where to start and where to look and do a first one with you, to get out some of the you know, beyond the first 10% that I'm totally confident you can manage yourself and start to go in the more meany things that come thereafter that will certainly have a big impact in reducing your overload.

Which brings me to the discharge summary of this episode. So process decay is real. It's a chronic condition. Not all of it will be visible to you, because it sits everywhere. It shows up in frustration, in bottlenecks, in inefficiencies, in lack of transparency, it's a huge cost to your business. Remember, 900 processes, a quarter of people's time is spent on stuff that doesn't really need doing. 70% of people admit to working around some of that is totally benign, but if people have good workarounds, then maybe they should become the process, instead of maintaining also or or somebody else somewhere, having the task to maintain the handbook and the manual that has a process in there that nobody else uses anymore, right? So workarounds are a real thing, and some of them might be great, and some of that might be costing your business a lot, right? So knowing where they are and looking into them is very important. So this is the subject for engagement and communication with your team. Let them tell you where it's at, what's not working, and involve your team in designing the processes all the users right, make sure that reality is reflected back in what you come up with. And AI is a great help in this dry and complex topic. It's I haven't met a lot of people to whom this is the favorite topic, or a lot of businesses who like to have this top of their agenda, but it's one that can help you be healthier as a business quickly, and AI has made that job in processing these huge volumes of data and information quickly, so much easier. So put it on your calendar for or on your agenda for 2025 as an issue to work to make your business flourish. Thank you for tuning in today, and I hope that I hear or see you back here next time. Thanks.