Conventional wisdom thinks of a business as consisting of a front office, which markets, sells and serves customers and a back office that fulfills demand and handles operations. I wrote about this topic about a month ago in the following post: It’s time to start talking about the ‘middle office’
The dichotomy of front vs. back is the basis how we think of everything from compensation structures and rewards (front office) to information systems (back office) and the way we look at reducing organizational costs (primarily back office).
Mid-office processes are decision centric, semi-structured and require bringing experience and tacit information together to assess the situation make decisions and mobilize the organization. THey sit between the front and the back office as shown in the graphic below.
These processes are not formally recognized or even overtly managed, but they are critical because the decisions they produce and the actions that determine the company’s direction and cost structure. Think of pricing, resource allocation, strategy formulation, strategy execution, compensation and rewards, etc. All are semi-structured processes which highlights the following:
You cannot improve something that does not have a name .
Many mid office processes are poorly defined, the first step is to give them a name so you know where to focus your improvement efforts and identify leverage points to influence quality, cost and effectiveness.
- Pay particular attention to areas where you make decisions repeatedly or conduct knowledge based work, or think of things as handled by ad hoc teams.
- Take a hard look at processes deemed to be the domain of management, but have become the domain of committees or cross- functional processes. These are mid office processes that are handled calling a meeting or having a standing meeting.
- IT systems for information and reports can identify mid office processes from the perspective of highlighting people using systems in ways that they were never intended to work. Scanning a list of custom, ad hoc and repeated special reports is one way to identify these processes as these reports feed the type of semi-formal work found in the mid office.
- Identify the major decisions that influence organizational performance, particularly the ones reached via committee or that happen periodically but not regularly.
- Identify the processes involved in making these decisions the resulting impact on organizational performance. Processes where there is not a clear connection are candidates for reform or removal as they are no longer needed or may have outlived their useful life.
These steps give shape to work found in the mid-office by looking at its decisions, information and direction. Create a list and do not worry too much if it looks like a mixed bag of committee’s, special task force, exceptions, loose bits and odds and ends. The work in the mid-office is semi-structured so its natural that it would be difficult to cleanly define these activities.
The key criteria for things being on the list include:
- It is work that you do, even if you do not do it on a regular basis.
- It is work that matters, the decisions, actions or agreements made have an impact on the business, its customers, products, people, suppliers etc.
- It is work that people will remember, you may have to say ‘do you remember when we …” but once introduced people acknowledge the work.
Applying these three criteria will help you focus the list on work that you do, that has meaning and that people can identify. Push things that do not meet these criteria down the list for latter consideration and you now have an outline of the work that happens in the mid office.
Financial Times: Time for a new concept – the Mid office by Paul Taylor