Chubby Cat rasied an interesting point in a previous blog regarding the role and value of the "Back Office".I think you have touched on a significant and topical point with this. 

"I was talking to an organisation the other day that had split their internal finance team between front-facing 'business partners' and a back-office shared service centre. Result? The back office folk are all demotivated because the business partners are getting all the glory. Perhaps showing the back-office people their true role as the 'Hidden Persuaders' would help them come to terms with their new (and vital) role?

Alan F  "

At the moment the standard government response to a fiscal crisis to “lets slash and burn the back office”. After spending many years working with and for large organizations I can see how waste can grow like Japanese Knotweed as an invasive force that sweeps across the corporate hierarchy.

But in the same way that the knotweed will no be fussy where it invades – corporate waste isn’t just confined to the ‘back office’. Low value people, processes and systems can permeate front, back and middle office functions. I have consulted with may back office functions that are a hotbed of low value operations. But I have also worked with many front line operations that are full of people and processes that should have been confined the waste bin many years ago.  

The standard response to ‘cut the back office’ really cuts no ice if we are serious about improving the operating value of the organization. It is like deciding to improve a football team by halving the number of defenders, by saving the cost of running the Rolling Stones with sacking Charlie Watts, or an F1 team cutting the race costs by only having one engineers in the pit stop to change the wheels. I would go so far as to argue that is often a lazy response motivated by political expediency and has little to do with making a real commercial or operational difference.

If a senior team is serious about improving efficiency within an organization – then it should seek to address the process with professional rigor. To this end a number of pertinent questions need to be answered:

1.     Before looking at the levels of waste within the system – what caused the waste to develop in the first place. What people, processes and policies existed to allow the problem to develop – because if not resolved the old problems will reappear.

2.     Can the team be sure that the process will be driven by an ethical and robust review process and not just turn into a witch-hunt. I have seen too many change programmes where the regular downsizing process is seen as pay-back time.. A chance to get rid of the people who have crossed the path of members in the senior team. In the short term it may clear out the dead wood – but in doing this no matter how the change is sold to the people – they will see it for what it really is and will fight back in subtle and covert ways.

3.     In too many optimization programmes I have seen local downsizing choices made that ignore the consequential impact on the overall systemic model in the organization. One manager may view the paper pushing exercises undertaken by the lifer in the team as a redundant activity that is no longer needed. But it may well be that the apparent low value of the effort is needed on rare occasions when client groups need to quality assure the internal systems before awarding large contracts. Activity costing must be undertaken against end value and not just team or unit value.

4.     Maybe get rid of the phrase ‘Back Office’. It sucks. Everyone should have clear line of sight to how their daily activities contribute towards customer satisfaction and the profitability of the business. The Front and Back office title create an arbitrary, false and tribal based split within a group of people who must be dedicated on delivering customer service. Otherwise we could have upstairs and downsides people, brown eyed and blue eyed people. What’s the point? If anyone cannot explain with clarify and focus how they add directly towards customer satisfaction and group profitability – then maybe that is the place to start asking questions about the value of the work they are performing.

The problem is that the simple act of naming something sets it apart from the context in which it sits. A bowl of apples is a bowl of apples. The moment I highlight that there are five Coxes and one Granny Smiths then I have created an arbitrary form of separation. Note it is my separation not the apples! Applied in am organizational setting the simple act of making one group the front off and the other the back office has immediately set a wall of separation in place that can be hard to overcome?

As an indication of how the tribal separation can lead to tension consider how rock bands manage their income. Royalties from a hit song can feed the writer for the rest of their life. But if the songs are written in the rehearsal studio, over late nights and drinks - how do you decide who has written what? In the early days of Take That there was one songwriter - that's Gary Barlow - who took sole credit. In the newly reformed Take That they decided to operate a collective system where the writing credits will be shared four ways. With Coldplay royalties are evenly split among the members of Coldplay. Chris Martin writes the songs and shoulders the fame, but shares all royalties with his three mates from university.

The next time you hear some grand pronouncement from a big knob official saying they will cut the “Back Office”. Try to look beyond the bland statement and inquire just how the critical choices will be made and determine if they are really trying to create a more efficient operation or is it yet another political game.

True business efficiently gains are achieved by separating the people and process that add value from those that don’t. Arbitrary naming conventions serve little real purpose in this exercise.