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RQ1: What characteristics of the process approach can contribute to the creation of a coherent process of urban development

Pettigrew (1997) explains the nature of process research in the following way:

"The major contribution of process research [as characterised here] is to catch reality in flight, to explore the dynamic qualities of human conduct and organisational life and to embed such dynamics over time in the various layers of context in which streams of activity occur."

When describing process research, Pettigrew (1997) underlines that the aim in a processual analysis is not to produce a case history but a case study. The case study goes beyond the case history in attempting to fulfil a range of analytical purposes. According to Pettigrew, there is (1) a search for patterns in the process and some attempt to compare the shape, character and incidence of this pattern in case A compared with case B, and (2) there is a quest to find the underlying mechanisms which shape any patterning in the observed processes.

Pettigrew identifies three main types of mechanisms driving the processes: They may be the directly observable and conscious intentions of key actors in this process; They may also be a feature of the immediate or more distant context

and not part of the sensibility of local actors; The mechanisms may also be elements in the interactive field occasioned by links between levels of process and context around the primary process stream under analysis.

Unlike some other process scholars Pettigrew stresses the linking of processes to outcomes. He argues that the purpose of a processual analysis is to explain the what, why and how of the links between context, processes and outcomes.

It is noteworthy that process research can be interpreted in two different ways.

On the one hand, it can be applied as a research approach to study how whatever issue gradually evolves (see e.g. Langley 1999) or how change unfolds in the entities or things being studied (Van de Ven & Poole 1995). On the other hand, processes can be studied as objects that can be developed (e.g. Davenport 1993, Hannus 2004, Smeds 1996, see also Section 1.3.2). The process management view stresses that processes and their development can also be managed.

In practice, process management and process development are almost inseparable actions. The task of process management is to coordinate the operations of separate functions into a cross-functional process that operates effectively towards a joint objective. However, the organisations are on different levels in their evolution from a functional organisation towards a process-oriented organisation. The processes also face continuous development needs, because of the dynamics of the competitive environment and the development of technology that affect the functions and their interactions (Smeds 1994, 1996).

The focus of this research is the urban development process itself, as a purposeful and managed chain of interrelated tasks that strives towards a joint objective. In this respect it can be compared to a business process that has been defined as a chain of human, technology-supported operations, connected by material and information flows, integrated into intra-or inter-organisational networks to create value for the customer and profit for the stakeholders (Smeds 2001). The urban development process is also a prime example of a complex and turbulent process that has to be continuously and consciously developed.

The perspectives of the process approach presumed useful in this study are process management, process development and performance measurement

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In the process management and quality management literatures several common elements are suggested to be critical to process management's success. Ittner & Larcker (1997) list five elements: Process focus, Human resource management practices, Information utilisation, Customer/supplier relations, and organisational commitment. They point out, however, that it is increasingly important to understand how the entire value chain can be managed to achieve process improvements.

The theories of management of business processes often distinguish between core processes and support processes (e.g. Davenport 1993, Hannus 2004). Core processes cross organisational units and extend beyond organisational boundaries to the activities of the customers and other stakeholders. Support processes can be defined as processes that enable the actual core processes. The core process begins from the interests of the stakeholders, runs through the official and unofficial networks and ends with a solution acceptable to the stakeholders.

Hannus (2004) reminds us that it is essential to set the right level of ambition in process management and development efforts:

- Lowest level: Documentation of current processes which results in minor impacts on business benefits.

- Second level: Streamlining and harmonising current processes may bring in moderate improvements in customer service and cost efficiency.

- Third level: By re-engineering critical processes, significant improvements can be reached.

- Highest level: Reinventing and implementing new business models may yield strategic benefits.

As the ambition level in process-orientation rises, the potential business benefits increase but, at the same time, change management becomes more challenging. If these levels are compared to urban development it is noticeable that, in urban development processes, the efforts usually remain at the lowest level.

Total quality management (TQM), continuous improvement (CI), and business process re-engineering (BPR) are examples of widely adopted process

management and development techniques. Ittner & Larcker (1997) emphasise the importance of understanding which process management techniques are most useful and mutually reinforcing in different contexts. According to them, the establishment of long term partnerships with suppliers and customers appear to be of major importance in improving performance in the industries studied. This is concordant with the process management literature arguing that organisations must extend their process improvement efforts beyond their own boundaries to incorporate suppliers and customers.

In the operational management of business processes, improved coordination of the inter-related tasks an important objective. The basic mechanisms of coordination in an organisation are standardisation, planning, and mutual adjustment (Thompson 1967). The process approach serves coordination needs in novel and more efficient ways, when compared to a functional hierarchy, and often enabled by information and communication technology. The process approach becomes even more important in inter-organisational networks.

(Smeds 1994, 1996.

One new coordination mechanism in the processes are the so called ‘process owners’ that are responsible for the management as well as development of the inter-functional processes (e.g. (Hammer and Champy 1993, Hannus 2004, Smeds 1994). A process owner is not only responsible for process results and performance, but also for the continuous development of the process (Davenport 1993, Hammer and Champy 1993, Smeds 1994, Hannus 2004).

Suboptimisation and project portfolio management

One of the principles in business process reengineering holds that optimising a part of a process can result in less than optimal performance for the process as a whole (e.g. Markus & Keil 1994). This is known as suboptimisation.

Suboptimisation usually occurs when one department or unit narrowly focuses on one subprocess while ignoring its connections to other processes or its relationship to the whole system. Elimination of suboptimisation is therefore one of the central concerns in process management and development. This entails a clear goal setting and a process management that measures, monitors, and also rewards the progress toward the goal (Markus & Keil 1994).

In the process of urban development, the risk of suboptimal results is remarkably high, due to the wide variety of public and private actors in the

numerous subprocesses. In their study concerning the building of new information systems, Markus and Keil emphasise, however, that even if suboptimisastion is avoided, the motivation of people to act towards the common goal is of major importance: "Systems do not improve organizational performance or create business value; users and their managers do" (Markus &

Keil 1994, 25).

The process of urban area development consists in practice of a large number of separate planning and implementation projects. With regard to business projects, their management is often associated with project portfolio management. In urban development, the projects could also be managed as a portfolio towards the common goal, over a long time period.

Project portfolio management usually has three objectives: maximising the value of the portfolio, linking the portfolio to the strategy, and balancing the portfolio (Cooper et al. 1998). Elonen and Artto (2002) have studied the problems in managing multi-project portfolios in construction industry. They introduce portfolio management in other words: doing the right projects, creating a link from the projects to the organisation's strategy and, simultaneously, adopting the long-term view.

Elonen and Artto suggest that many management activities are needed both at project and portfolio levels. The objectives of different projects should be systematically integrated into the strategy, and the projects should be prioritised using suitable methods. The roles and the responsibilities of the portfolio level should be clear and feedback should be given to the project level to guide projects to a right direction. Elonen and Artto argue that portfolio management encounters major problems if the monitoring of project progress is infrequent and where no adequate methods or guidance for portfolio evaluation, or project planning and management, exist.

The idea of managing projects as portfolios should be a welcome one for urban planning and urban development. Portfolio management in urban development entails systematic project level management combined with appropriate portfolio level management, and also includes making selections based on a global development strategy.

Knowledge-intensive work processes

Process reengineering efforts have sometimes been criticised for focusing too heavily on cost reduction, and not enough on adding value to products, services, and customers. Davenport et al. (1996) have examined the methods used to improve processes of knowledge work being generally focused on increasing value and improving quality, both of which are relatively difficult to measure. The authors suggest that in knowledge work, reengineering methods should not be adopted as such. Instead, organisations should select a set of methods and tactics that reflect the type of knowledge work they are addressing, their organisational culture, and the business requirements for the change.

Urban development includes, in addition to the administrative and operational work, also many knowledge work processes. According to Davenport et al.

(1996), the distinctive characters of the different types of work should be taken into account when processes are improved.

The importance of managing knowledge in a business process has been broadly discussed in management literature. The interest towards knowledge management is based on the view that organisations can derive significant benefits from consciously and proactively managing their explicit and explicable knowledge (Zack 1999). According to Zack, the process of refining knowledge includes the stages of acquisition, refinement, storage and retrieval, distribution, and presentation of knowledge. This process should enable the meaningful use of the knowledge and its application across multiple contexts.

In urban development, knowledge is produced during the whole process by different stakeholders and organisations. In the planning phase, in particular, knowledge is utilised in various forms: it is first gathered and then managed to support the decision-making and planning of the physical environment.

Rantanen and Kahila (2009) argue that, in addition to 'hard' knowledge, also 'soft' local knowledge²¹ should be valued, produced and utilised by both the planning professionals and the residents.

21 Rantanen and Kahila (2009, 1983) explain the difference between 'hard' and 'soft' knowledge with reference to Schön (1996) and Polanyi (1998): "The rationalist and technologic approach to knowledge underlines exact information and the unambiguous and objective nature of hard knowledge. This knowledge is often formally articulated and stored in, for example, registers.

On the other hand, local knowledge is often considered soft. It is personal knowledge and thus subjective and based on experiences and perceptions".

The process approach provides tools to visualise the logic of knowledge-intensive work processes by modelling the processes. The visual process model illustrates the logic of the tasks and reveals contingent timing problems and other possible bottlenecks. By means of process descriptions and process charts it is possible to understand the task interdependencies, and to perceive what is critical in achieving the main targets of an organisation (Hammer & Champy 1993, Hannus 2004). When processes are developed further, the process model supports the creation of common understanding between the parties, a necessary requirement for successful process innovation (Smeds et al. 2006).

Visual process models are especially useful when business processes are developed in collaboration with the network participating in the process. The joint process dialogue in process workshops, in front of a visual process model, creates a holistic process understanding, raises important development ideas, and creates motivation for process development and change. The participants in process workshops can immediately utilise some of the learning in their own work. Long-lasting organisational learning is thus achieved and the lead-time of process innovations is shortened. (See e.g., Smeds et al. 2005, Smeds &

Alvesalo 2003). Collaborative process development can also increase communication and knowledge-sharing on the goals of common business, and develop common understanding and trust between the collaborators (Jaatinen et al. 2006).

In an inter-organisational facilitated process development workshop, the members of the different partner organisations discuss and make sense of each other’s knowledge about the collaborative case and its process, they define joint terminology, re-produce their experiences so as to develop a shared understanding of the process, they make and take perspective, ignore and add to their previous knowledge, and develop together ideas for a better process in the future. (Smeds et al. 2005)