Presentation at the 2019 International Conference on Business Process Management, Vienna, Austria, September 5th 2019.

1. Regulatory Instability, BPM Technology,
and BPM Skill Configurations
Patrick Lohmann
ZEB
Muenster
Germany
patrick.lohmann@zeb.de
Michael zur Muehlen
School of Business
Stevens Institute of Technology
Hoboken, New Jersey
USA
mzurmuehlen@stevens.edu

2. The Idea in Short
Organizations have choices how to configure their BPM function
We investigate the configuration of companies in three industries: Retail, Finance, and Pharma
Our “hunch”: The regulatory environment may impact the choice of configuration
We found two configurations: Bilateral and Trilateral
While regulation may impact the choice of configuration, so does the technological maturity of the firm
2

3. Regulation: What is it and why does it matter?
Regulation: Authoritative set of operating rules accompanied by a formal governance
mechanism promoting compliance and sanctioning non-compliance and misconduct
(Baldwin et al. 1998)
Firms need to adapt policies and procedures to fit changing regulations
BPM professionals in forms help facilitate these changes and absorb the instability of a
regulatory regime
3

4. Regulatory Interventions as a Source of Change
A regulatory regime is:
unstable, when it encompasses multiple rule-making authorities that impose complex and frequently
changing rules
stable, when it encompasses a limited number of rule-making authorities and a continuance of rules
over time
Attention-based view (Joseph and Ocasio 2012; Ocasio 1997): organizations assign skills to roles so
that each individual in their role is able to address a subset of salient issues and their solutions
affecting organizational performance
Skills provide an upper bound of the tasks/issues a person can possibly perform/address
(Nelson and Winter 1982)
4

5. Industries can be in Stable or Unstable Regimes
5
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Year
0
1,000
2,000
3,000PublishedDocuments
Financial Regulation Pharma Regulation Trade Regulation
Financial Regulation: Securities and Exchange Commission, Financial Industry Regulatory Authority, Federal
Reserve System, Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau, Comptroller of
the Currency, Commodity Futures Trading Commission
Pharma Regulation: Food and Drug Administration, Office of National Drug Control Policy, Environmental
Protection Agency
Trade Regulation: Federal Trade Commission, Alcohol and Tobacco Tax and Trade Bureau

6. Our Initial Question
6
Question
Do unstable-regulated organizations configure their process
management professionals differently than organizations governed by
a stable regulatory regime?
If so, why?

7. Ostensive and Performative Aspects
Ostensive Skills: Related to designing processes, building maps and solutions
Performative Skills: Related to carrying out processes following the designs created
through Ostensive Skills
Think: Build-time and Run-time
7
Process
Regulation
affects Ostensive misfit
(new rules, tasks)
Performative misfit
(exceptions, workarounds)
Complianceassessment
Ostensive Aspect
Performative Aspect

8. Skills, Roles, and Jobs
8
Skill 1 Skill 2 … Skill n
Role 1 Role 2 Role n…
Skill 3
Job 1 Job 2 Job n…

9. Where did we get our data?
Job ads to generate a skills taxonomy
Process management job ads from Monster.com between January 2015 and January 2016
Random sample: 1,000 job ads from the retail (NAICS: 44), the consumer goods (NAICS:
31), and the financial services industry (NAICS: 52)
Public resumes to generate company-specific roles taxonomy
Radom sample: 1,000 LinkedIn.com resumes of process management professionals at
Walmart, Pfizer, and Goldman Sachs as of September 2017
Companies theoretically sampled (Eisenhardt 1989): All are professionally-managed ones in
their industry. Goldman Sachs has a lower level of process automation, whereas Pfizer has a
higher straight-through-processing rate (Interviews with managers and executives)
9

10. Latent Dirichlet Allocation (Blei et al. 2003)
A document is a probability distribution over a
number of topics
A topic is a probability distribution over words
10
N Words
MDocuments
N Words
KTopics
=
K Topics
MDocuments
M
N
A topic model estimates hidden variables, hence
is a measurement model
Find the variable instantiations that best match
the observable words
wmnzmnθm βk
document-topic
proportions
word-topic
assignment
observed
word
topic-word
proportions

11. Exploratory Data Analysis through LDA
11
25,363 job ads
(100%)
7,860 job ads
(31.0%)
77,700 sentences
(19.6%)
Measure: Cosine
distance
Topics: between
2 and 100
Measures: model
coherence and perplexity
Measures: total within-cluster
variance and gap statistic
Stable / unstable regime:
4,693 / 3,709 job ads
9,101 job ads
(51%)
Algorithm:
Ward algorithm
Identify and remove
duplicate job ads
Run LDA over
sentences with
varying # of topics
Identify optimal # of
topics in sentences
Group documents
into subsamples
based on NAICS
Identify optimal # of
topics in documents
Run LDA over
documents with
varying # of topics
Cluster documents
based on their topic
distributions
Transform job ads
into word-count
sentence vectors
Identify and remove
junk sentences
Aggregate remaining
sentences at the
document level
Identify and remove
job ads associated
with wrong NAICS
Interpret results
Identify optimal # of
clusters in sub-
sample

12. Example Noise Topics Inferred by LDA
12
Topic Label Description
1 Recruitment
Process
appli, applic, follow, curriculum, vita, inform, send, contact, resum, interview, www, obtain, interest, email, work, check,
author, opportun, submit, visit, detail, clearanc, success, call, secur, suitabl, complet, date, onlin, letter
3 Company
Description 2
recruit, manag, client, sourc, consult, busi, contract, process, hire, team, current, staff, join, outsourc, servic, seek, base,
talent, work, resourc, develop, procur, compani, select, global, project, technolog, new, specialist, opportun
5 Compensation
and Benefits
benefit, salari, offer, competit, packag, insur, day, employe, pension, compens, compani, holiday, work, bonus, hour,
plan, life, paid, healthcar, scheme, depend, pay, medic, program, dental, base, flexibl, term, car, time
6 Equal
Opportunity
Employer
employ, status, equal, opportun, disabl, applic, origin, veteran, law, protect, nation, color, race, religion, gender, orient,
age, qualifi, sexual, feder, sex, state, ident, accommod, reason, action, individu, condit, affirm, employe
7 Educational
Background
degre, bachelor, field, busi, scienc, equival, engin, educ, manag, comput, inform, account, qualif, relev, disciplin, work,
financ, technolog, master, technic, system, certif, administr, combin, desir, analysi, colleg, industri, univers, qualifi
9 Organizational
Culture
innov, custom, passion, cultur, work, peopl, busi, compani, deliv, drive, team, make, commit, solut, focus, client, world,
improv, technolog, servic, live, build, creat, continu, employe, success, idea, dedic, chang, develop

13. Example Skill Topics Inferred by LDA
13
Topic Label Description
1 Business
Intelligence
data, busi, intellig, transform, load, extract, warehous, report, develop, analyt, design, tool, solut, analysi, informat, integr,
process, model, oracl, implement, support, dashboard, tableau, object, teradata
6 Supply Chain
Management
manag, suppli, chain, procur, inventori, oper, supplier, plan, logist, store, cost, warehous, purchas, order, product,
transport, process, improv, merchand, distribut, ensur, time, forecast, ship, meet, retail, equip, custom, perform, system
7 Process
Improvement
process, improv, manag, continu, lean, project, lead, sigma, identifi, implement, team, busi, develop, perform, drive, tool,
qualiti, methodolog, oper, organ, chang, opportun, effici, initi, metric, cost, facilit, train, effect, support
8 Software
Development
test, system, user, support, softwar, applic, develop, document, product, plan, function, engin, train, releas, technic,
provid, configur, comput, ensur, execut, cycl, chang, program, accept, maintain, life, autom, assist, implement, specif
12 Data Analysis data, report, analysi, busi, analyt, system, intellig, perform, analyz, statist, tool, provid, develop, model, inform, project,
process, sourc, extract, improv, support, recommend, master, present, insight, drive, ad, oper, warehous, databas
13 Risk
Management
risk, complianc, control, manag, secur, audit, oper, regulatori, polici, process, assess, act, report, govern, monitor, ensur,
standard, activ, legal, regul, review, practic, procedur, provid, identifi, sarban, oxley, issu, effect, inform

14. 23 Performance Management
20 Finance and Accounting
17 Process Administration
16 Customer Relations Management
13 Risk Management
11 Human Resources Management
9 IT Services Management
6 Supply Chain Management
4 Packaged Software
21 Project Delivery
1 Software Engineering
24 Business Strategy
19 Systems Integration
18 Process Analysis
15 Business Transformation
12 Data Analysis
8 Software Development
7 Process Improvement
5 Change Management
3 Product Development
2 Problem Solving
Null
Ostensive Skill
Performative Skill
14 Quality Management
22 Project Management
10 Client Services
Front-Office Manager
Back-Office Manager
Business Analyst
Technology Analyst
Operations Manager
14

15. 15
23 Performance Management
20 Finance and Accounting
17 Process Administration
16 Customer Relations Management
13 Risk Management
11 Human Resources Management
9 IT Services Management
6 Supply Chain Management
4 Packaged Software
21 Project Delivery
1 Software Engineering
24 Business Strategy
19 Systems Integration
18 Process Analysis
15 Business Transformation
12 Data Analysis
8 Software Development
7 Process Improvement
5 Change Management
3 Product Development
2 Problem Solving
Null
Ostensive Skill
Performative Skill
14 Quality Management
22 Project Management
10 Client Services
Front-Office Manager
Back-Office Manager
Business Analyst
Technology Analyst
Project Manager
Operations Manager

16. 16
23 Performance Management
20 Finance and Accounting
17 Process Administration
16 Customer Relations Management
13 Risk Management
11 Human Resources Management
9 IT Services Management
6 Supply Chain Management
4 Packaged Software
21 Project Delivery
1 Software Engineering
19 Systems Integration
18 Process Analysis
15 Business Transformation
12 Data Analysis
8 Software Development
7 Process Improvement
5 Change Management
3 Product Development
2 Problem Solving
Null
Ostensive Skill
Performative Skill
14 Quality Management
22 Project Management
10 Client Services
Clinical Operations Manager
Process Engineer
Operations Manager
Back-Office Manager Business Analyst24 Business Strategy
Technology Analyst

17. Bilateral Configuration Trilateral Configuration
Bilateral and Trilateral BPM Configurations
Proposition 1. Under stable regulation, an organization adopts a bilateral configuration.
Proposition 2. Under unstable regulation and a higher technology capability, an organization
adopts a bilateral configuration.
Proposition 3. Under unstable regulation and a lower technology capability, an organization
adopts a trilateral configuration.
Proposition 4. Trilateral and bilateral process management configurations can coexist within
an organization at the process-level.
17
Process
Regulation
affects Ostensive misfit
(new rules, tasks)
Performative misfit
(exceptions, workarounds)
Complianceassessment
Ostensive Aspect
Performative Aspect
Attention directed to
Attention to
Manager, Project Manager
Manager, Analyst
Manager, Analyst
Manager, Analyst

18. Looking Forward: Does Intense Regulation
Create Innovative Organizations?
Stringent environmental regulation stimulates innovation, making organizations more competitive (Porter 1991)
Organizations increase their R&D investments to innovate greener production processes
Finance and healthcare regulation is not only stringent but it is intense
The innovativeness of these organizations may not solely be the result of their own decision
These organizations are (unintentionally) naturally innovative by virtue of their regulatory instability
Such regulation may coerce them into structurally ambidextrous process management configurations
18

19. Thank You!
Regulatory Instability, BPM Technology,
and BPM Skill Configurations
Patrick Lohmann
ZEB
Muenster
Germany
patrick.lohmann@zeb.de
Michael zur Muehlen
School of Business
Stevens Institute of Technology
Hoboken, New Jersey
USA
mzurmuehlen@stevens.edu