How do you drive significant business improvement when you have already optimised using traditional techniques? Part 2

The Change

There has been a seismic shift in the world and it has changed beyond
belief since 1776: The way we communicate, the way we make music, the way we
make television and films, the way we travel, the places we can travel to and
technology has changed with this to keep up with our ever evolving demands. The
one thing that hasn’t changed is how we do process and how we organize our
business. Now I can hear some of you scoffing and remarking ‘Er, yes we have
changed how we do process, look at TQM, BPI, BPR, Six Sigma, Lean, BPM…you’re
talking rubbish James’ and where as I agree we have changed techniques around
process, we have not changed the foundation that they were based on. 

It’s like we have had a house for a very long time and we
keep having more and more kids. We expect the house to be able to handle this
so to make living conditions better we decide to keep paining the walls
different colours and saying ‘Look guys, its completely different.’ We need to
fundamentally evolve how we think to keep up with the massive change that’s
happened and wake up to the fact that everything has changed except how to do
process and organise ourselves.



Lean, Six Sigma and the Glass Ceiling
             
Now let’s look at the traditional ways to drive business improvement. Six
Sigma was all the rage and still is the ‘only way to go’ for some process
professionals, especially after Jack Welch’s success using this at GE. The thing
is, if a big company is in a big mess then Six Sigma will make things look
better. It may seem like there has been significant improvement however you will
tend to find that the technique will have been applied to one process, or a
process in one area and rather than fixing the cause of the problem it will fix
the effect. If you fix an effect it will only happen again or move the pain
elsewhere as the cause is very much still there. Also listening to ‘The Voice of
the Customer’ is a waste of time, we don’t need to provide what they want, we
need to provide what they need. We as customers are inept at conveying what we
need, it just doesn’t happen. For example I didn’t know I needed an iPhone or an
iPad before they were invented…I very much need them now. The easiest way to
think about it is if you ask a child what they ‘want’ to eat, imagine the
responses you will get. Rather than doing that we figure out what they ‘need’ to
eat and provide that, however we don’t translate this ‘want vs. need’ thinking
to business.  GE’s inside-out
thinking is causing them to be overtaken by the smarter Outside-In companies as
are Toyota, Toyota in fact have moved from 14th in the world
down to 27th in the world
in brand value[i] but apparently that doesn’t matter let’s still use their techniques, that’s a
smart idea.  If we look at Lean we
talk about ‘waste’ and how to eliminate it. This is still very much industrial
age or ‘classical’thinking. If I was making a table in a factory there would
physically be‘waste’ wood to eliminate however in a service, for instance a
Mortgage application, the ‘waste’ that is talked about does not physically exist
so we are focusing our efforts on an imaginary entity applying manufacturing
process techniques to a service company. Ask yourselves now, How much of my work
is manufacture?  Why do I think
about it all‘left to right’ like a production line? Using these techniques you
will get improvements, definitely, no doubt whatsoever. However using these
techniques you will quickly hit a glass ceiling where you can go no further,
definitely, no doubt whatsoever. This is all Inside-Out thinking. There’s every
chance you are optimising a process that doesn’t need to be there. You might be
doing things right…but are you doing the right
things?

Part 3 Soon...

[i]Millward-Brown Optimor Annual Brand Survey 2011