Can process really differentiate your company? I know. It’s an longtime debate. In fact, thinking back several years now, I remember it almost as an ongoing joke. And the story would always be the same. Folks from a software provider would sit down with a customer to talk about their processes. The people from the manufacturer would always declare with a laugh: “our process is totally unique. You will have never seen anything like what we do as a process because it’s what differentiates us in the market.” Walking out of the meeting hours later, the folks from the software provider would just shake their head and mutter: “everyone does it the same. Everyone thinks they’re unique but they’re all the same.”

Does Process Differentiation Matter?

Do you like to talk to people about processes? I’ll admit right up front. I do. Now of course it’s interesting to understand who does what in which order. But what I also find fascinating is how fervent the owner of processes can be. Somewhere, somehow, the believe that process differentiation is the most important thing has crept into our business psyche. It’s as if process differentiation has become the endgame instead of product differentiation. And I’d hope that most of you agree that anything that doesn’t contribute to a differentiated or innovative product isn’t really value-add. Now before we make any conclusions here, let’s ask some tough questions.

  • If everyone had the same processes, would all products be the same? I’d argue for a resounding no. Down at the execution level, individuals inject variability and creativity that result in divergent products. And what about the next step down the line of that argument?
  • Does that mean process differentiation doesn’t matter? Again, I’d answer a resounding no. Variations in processes can make an impact on product differentiation. But again, product differentiation is the end game, not process differentiation.

Macro and Micro Product Development

Now some of the answers that I gave above seem to conflict with one another. To provide some clarification, let’s me offer the definitions for two concepts relevant to this conversation.

  • Macro Product Development: This is the top layer of product development that is executed by organizations and teams. It includes models like stage-gate and waterfall development as events like design release and change management.
  • Micro Product Development: This lowest layer of product development is executed within the team and at the individual contributor level. It includes models like agile development, practices like follow-the-sun and methodologies like set-based design.

So how does something like this help us? It provides a level of granularity with which we can provide some answers about process differentiation. Specifically, I’d argue for the following.

  • Macro Product Development is similar across manufacturers. At this layer of product development, there is very little process differentiation. Sure the terminology and process maps might not mirror each other. However the triggers, characteristics and decision making is very close.
  • Micro Product Development is unique across manufacturers. At this level, there is quite a bit of process differentiation. So variation comes not only from the individuals executing the processes but also from the processes themselves. Ultimately, this is what yields highly differentiated and innovative products.

Conclusions and Summary

What’s the conclusion? Process differentiation isn’t the end game itself. If your process is differentiated, it must result in product differentiation. But even if your process isn’t necessarily differentiated, you will get variation from the individuals executing the processes. Also, process differentiation within manufacturers come not from the highest levels (Macro Product Development) but from the lowest levels (Micro Product Development).

So, time for you to weigh in. Is your process truly differentiated? If so, is it differentiated at the highest or lowest levels (no details necessary)? Sound off and let us know what you think.

Take care. Talk soon. And thanks for reading.