Synopsis: Most decisions in organizations are made by escalating them up the management hierarchy — and it’s usually the highest paid person in the room’s opinion that prevails. But with the rise of digital technology, and with it the ability to get immediate feedback from customers and communities, crowdsourcing has become a powerful alternative for driving important decisions. It opens up and democratizes decisions, harvesting the accumulated thoughts and perspectives from your customers and across your organization.
Examples: IBM uses internal crowdfunding to choose which IT projects to develop, and uses utilization to decide which applications go into production. Valve Software lets people decide which projects they work on.
Question: Where could you replace managerial decisions with crowd decisions?
Synopsis: Organizations need more individual leaders who can help everyone navigate through the new, speeded-up and volatile world. Problem is, too many organizations approach this challenge with a one-size-fits-all idea of what change leaders should look like, and they train them accordingly.
In our research on change agents at the Phoenix Community of FCB Partners, we have found that there are three distinct challenges which require different kinds of change leaders: (1) transformational leaders, (2) innovation instigators, and (3) innovation managers.
1. Transformational Leader: Jose Luis Prado at Quaker inspires with metaphor.
2. Innovation Instigator: Paul Klein at Rich Foods is never satisfied.
3. Innovation Manager: Doug Drolett of Shell drives execution.
To develop managers, Google assesses competencies and then provides tailored development activities.
Netflix believes in developing people by giving them the opportunity to develop themselves, by surrounding them with stunning colleagues and giving them big challenges to work on.
Question: What kinds of change agents have you seen?
"Stop rearranging the deck chairs on the Titanic!"
When your boat is sinking you don’t focus on tidying up your ship. It’s all hands on deck to plug the hole or abandon ship to safe your life.
And in this PEX Week USA keynote address, researcher and consultant Brad Power, says this analogy is becoming all the more relevant for continuous improvement. The cause? Market pressures and fast-moving digital innovators turn the rules of established industries upside down. You need to know when to “tune the performance engine” and when it’s time to completely reinvent yourself.
Here’s why and what you need to think about..
(When you have 47 minutes)
In this interview with the PEX Network, Brad Power describes why he believes the world is shifting from continuous improvement and episodic innovation to a need for continuous innovation. Despite the need to devote more resources to disruptive innovation, In the internal competition for scarce resources in most large traditional companies, almost always today’s performance engine wins the lion’s share.
How do some leading organizations continuously innovate? How do their management systems protect money and people to generate, incubate, and commercialize disruptive innovations?
There is a transcript of the interview at http://www.processexcellencenetwork.com/innovation/articles/move-from-continuous-improvement-to-continuous-inn/
Synopsis: Instead of mapping workflow in detail with “boxes and arrows,” managers should focus on the “diamonds and arrows” of decision flows. In our transformed information economy, improving the decisions of knowledge workers can have a much higher impact on business performance than fixing daily workflow inefficiencies.
Example: Materials managers reoriented themselves from process details to business goals and operational performance by brainstorming a list of 47 decisions in 6 categories that they were responsible for, then prioritized and analyzed 12 decisions that were key to performance. They then focused on these critical 12 for immediate training, performance management, process improvement, and longer-term IT systems improvement. With this re-focusing, they improved the company’s operational and financial performance significantly over the next months.
Question: Have you seen examples where focusing on better decisions drove better outcomes than focusing on workflow improvement?
Synopsis: The uber challenge for process improvement in organizations has always been to make improvements across functions. In the absence of a significant disruptive event, or obvious proof that the world is changing, the gravitational forces in organizations pull strongly towards the performance engine: functional, hierarchical, command-and-control, rigid. Few organizations have assigned people to manage their major end-to-end processes — and been successful.
Example: A U.K. bank is making continuous improvement part of their standard work. It has gone well, but only at a functional level. Trying to get end-to-end improvements has proven to be virtually impossible.
Question: Have any sizable organizations assigned people to manage their major end-to-end processes — and kept them in place over the long term?
Synopsis: The focus of your process improvement activities should depend on the needs for change in the business, and I see three possible objectives: (1) fine-tuning the “performance engine”, (2) process innovation, and (3) making your organization “anti-fragile”.
Examples: GE uses “Belts” and Lean Six Sigma to fine tune the performance engine. Toyota develops problem solving skills to make themselves “anti-fragile”.
Question: If your organization is confronted by a critical need to improve your operations, how do you focus your process improvement activities?
Synopsis: Culture change is a bear. The conventional wisdom is that it takes years to change a culture, defined as the assumed beliefs and norms that govern “the way we do things around here.” And few organizations explicitly use culture as a way to drive business performance, or even believe it could make sense to do so. The logic usually works the other way — make specific changes in processes, and then hope that, gradually, the culture will change. Yet some leading organizations are turning this conventional wisdom on its head.
Example: By focusing first on changing their culture, Trane, the $8 billion subsidiary of Ingersoll Rand that provides heating, ventilating, air conditioning and building management systems has been driving results — and quickly.
Question: Can you change culture to quickly drive results?
Synopsis: Many large, successful companies are creating offices in California’s Silicon Valley to spot big new trends and learn how they can transform their organization in ways they couldn’t otherwise imagine. It’s no longer good enough to wait for change to come to your industry; you need to be out there where it’s happening. And a lot is happening in Silicon Valley. Companies are using “idea scouting”, venture investing, and product research and development to tap into innovations.
Examples: General Motors established a corporate innovation group in Silicon Valley in 2010 to look at advanced technologies related to the Internet and mobile connectivity, “infotainment”, and self-driving cars. Swisscom’s Silicon Valley team scouts for the very best ideas from the giant marketplace of mobile innovations and introduces them to headquarters in Bern, Switzerland. American Express invests in innovative ventures. Honda launched Honda Silicon Valley Lab (HSVL) in 2011 to partner with talented entrepreneurs and tech companies to create cutting edge products and services.
Question: How can you build your organization’s ability to sense and respond to rapid improvements in technology?
Synopsis: Some organizations which have competed successfully for decades by focusing primarily on creating unique solutions for each customer are now embracing operational excellence to drive even more customer value. I see a shift in the coming decade to combining operational excellence with tailored solutions for individual customers based on a deep understanding of their needs.
Examples: L.L. Bean has had lots of information about customers for many years that they have used to tailor offerings and services. But while such customized services used to be enough to compete effectively, these retailers are now finding they need to improve their operational reliability too. L.L. Bean is embarking on a major investment in its systems infrastructure to improve its reliability.
No industry is closer to its customers than healthcare. Doctors are driven to understand each patient deeply and to deliver a unique solution tailored to the patient’s specific needs. In 2003 ThedaCare (a health delivery system with five hospitals, 26 clinics, and over 6,000 employees, based in northeast Wisconsin) leaders decided to focus on designing processes that consistently work better, reduce waste, and enable staff to better meet the needs of patients.
Question: Have you seen organizations which have simultaneously been world class at operational excellence and customer intimacy?