Mark McDonald

Every organization knows about its front office that generates revenue and its back office that operates those processes.  Few recognize the capabilities within the space between – the middle office – capabilities that determine your effectiveness and comparative advantage.

Executives know how to improve the performance of their front and back office processes.   They change performance through implementing new solutions, change business processes, launch new products and the like.  The success of those changes has been spotty often because executives fail to realize the importance of these middle office processes

Executives can change what happens in the front and back office.  But these changes cannot be sustained without changing mid-office processes.  Processes like product development, process improvement, corporate performance management, governance, and the like are dynamic capabilities.

It can be difficult to change mid-office capabilities as they are often ill defined, based on judgment work in terms of the performance determined more by people than by compliance to predefined processes. How to you improve a process that has some structure, it is repeated multiple times but never exactly the same way twice.  You cannot use traditional approaches when improving the work done in the mid-office.

Mid office processes create capabilities responsible for figuring out complex issues, expediting the execution of those plans, and coordinate complex changes.

Establish mid-office processes and capabilities where there is organizational ambiguity.  Where complex decisions are handled by committees, working groups or other situations where no one is sure what the plan is, and more importantly who decides,

The performance of mid-office processes is indirect.  It is measured not in the number of transactions handled, the size of revenue, etc.  Rather mid-office performance manifests itself in the decisions and actions created in the mid office.  For example, are you applying your resources in the right way, in the right place, to the right effect.

Mid-office processes are people centric.  Improving them starts with Conduct an audit of the scope and practices of managers, leaders and judgment workers.  Concentrate where their personal influence and authority trumps organizational processes and policy as these may be areas for bringing greater discipline and information to decision making through turning a personal ability into a repeatable and improvable mid office process.  A surprising number of mid office processes and decisions are made by managers who have not been trained or prepared to do this work — raising their capability and abilities is a significant source of improvement.

The performance of mid-office processes rests in its ability to deploy its decisions and coordinate actions.  Improving mid office processes starts with looking at the effectiveness of deploying the decisions made in the mid office processes.  Pricing, marketing, policy or process change can take weeks or months to work their way through the rest of the company and its systems — creating complexity, confusion and cost.   Thinking of ways to raise the communication and deployment of their results/decisions.   This goes beyond creating new intranets, corporate Facebook and the like.  It goes to the fundamentals of deploying decisions.

It is easy to think of organization performance only in terms of front and back office activities.  While these activities deliver performance, they do not set the boundaries of your potential.  That potential rests in how you understand your context, make tough decisions and deploy coordinated and complex actions.  That process happens in the mid-office.  Improving those processes raises the performance of the enterprise front to back all from the middle.

Related Posts:

It is time to start talking about the mid-office

Start improving performance by naming your mid office processes

Time to start thinking about a new concept — the mid office  Link to the Financial Times

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Category: CIO Innovation Leadership Management Strategic planning Strategy     Tags: Business Strategy, IT strategy, mid-office, Strategy and Planning

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