Synopsis: Organizations have defined standard ways of doing things in three broad categories: (1) to ensure people comply with “must do” procedures (e.g., safety checklists), to achieve consistency, avoid safety or regulatory problems, or handle emergencies; (2) to make people aware of “should do” practices (a routine that has been determined to be the best way to do things), to achieve adaptability, flexibility, and even innovation; and (3) to let people know where they have discretion in what they “may do” (e.g., give up to $50 to customers who have been treated badly), to foster creativity, innovation, flexibility to meet customer needs in real-time, and worker job satisfaction.
Example: Union Pacific documents standard operating procedures to capture employee know-how and wisdom and to involve workers in improving their work.
Question: How have you seen organizations use standard work?
Synopsis: Most people think standard operating procedures are a strait jacket that limits their flexibility. Yet in our increasingly complex world of work, with so many possible decisions and steps, clever use of standards can liberate. They can actually make it easier to tailor customer experiences at low cost.
Example: The Cleveland Clinic uses standard pathways when a patient searches online for information that allows them to easily and consistently meet over 100 potential health issues.
Question: Have you seen clever applications of standard work that allowed both efficiency and the flexibility to offer unique solutions to each customer?
Synopsis: Going to market effectively these days, no matter what business you’re in, means relating to customers as individuals — even if there are millions of them. Creating products and services for market segments of one (“mass customization”) isn’t easy. The only way it can happen: marketing, IT, operations, and human resources functions must collaborate in unprecedented ways.
Examples: Tesco built detailed profiles of customers and then used these insights and a flexible supply chain to customize their products and offers. IBM has built a customer database called Blue Insight, an analytics cloud computer system that unifies hundreds of software applications for more than 200,000 IBM consulting, sales, technical and marketing people. At the Cleveland Clinic the marketing team works with IT to deepen online.
Question: How have you seen functions collaborating to deliver tailored customer services?
Synopsis: Most organizations continuously strive to achieve operational excellence, but they spend less effort understanding customer needs — and few marry these two sources of customer value effectively. 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.
Example: Tesco spent the last three decades improving its supply chain processes, and the last two decades collecting and analyzing customer data to design and launch a series of services, including smaller local convenience stores and online shopping.
Question: Have you seen companies that have combined operational excellence with customer intimacy?
Synopsis: To get big changes to the way work is done in organizations with strong bureaucracies, like the federal government, requires:
Examples: the Business Transformation Agency of the Department of Defense came up with innovative ideas but was disbanded. The Internal Revenue Service was successful in transforming its bureaucracy.
Question: What conditions enable an organization with a strong bureaucracy to innovate?
Synopsis: These days almost anything can be outsourced to specialists and reconnected, and increasingly companies are outsourcing high value activities. For example, TW Garner, which makes Texas Pete Hot Sauce and Green Mountain Gringo Salsas, has hired AMG Strategic Advisors for consumer, shopper, and category insights and analytics services. Apple gets mobile apps from independent software developers. Forbes.com uses external bloggers (not just internal staff) to write articles.
How can you organize a fragmented team of internal and external people to improve the customer experience, rather than optimize each party’s objectives?
Question: How have you used a team of outside specialists to deliver a better customer experience?
Synopsis: With increasing industry disruption, efficiency is fast becoming of secondary importance to innovation and agility. Many large organizations have too little capacity for external sensing, strategic reflection, and business transformation. We believe that organizations need to explicitly develop two parallel management systems: the operational system that manages the short-term execution of work — what we call the “Surface System,” and a second system that focuses externally on sensing and driving strategic change — what we call the “Deep System.”
Example: In 2001 IBM set up a permanent transformation organization designed to anticipate and respond to the increasingly unpredictable changes in its markets. They introduced full-time process owners, who are responsible for driving change and eliminating waste within their respective processes.
Question: Where do you see the Deep System at work in your company? How many people are dedicated to it?
Synopsis: As we automate more and more routine work, generating ever greater volumes of digital data, managers are focusing ever more on supporting knowledge workers — which these days is just about everybody. Online collaboration tools can help; they can give workers quick answers to questions, speed decision-making, and improve communications from the top to bottom of an organization. But most companies find it a cultural challenge to adopt these tools.
Example: At Nationwide Insurance online social collaboration has become part of the workplace and a key tool for engaging workers. Anyone can ask online questions, post comments, make announcements, recognize a peer, or search the network to find answers. Like Facebook, the Nationwide network enables people to share with groups or friends, with easy access through mobile devices.
Question: Have you seen workers use online collaboration tools to do their jobs better and discuss how they can improve their work?
Synopsis: Does being together physically matter anymore in today’s increasingly virtual world of work? You need to carve out some time to get out of your office, to work across departments and hierarchies with the people doing the work.
Examples: Constellation has developed an Innovation Center, an unconventional permanent facility. People come from different locations to the Innovation Center for “ideation” (brainstorming), decision-making, and planning. McLeod Health, a community hospital in Florence, South Carolina, implemented “daily huddles” and “rounding” as ways to bring everyone together face-to-face to review operations, share information, and solve problems.
Question: How are you using face-to-face interactions in our increasingly virtual world?
Synopsis: I see three big opportunities to improve work in the coming decade, which I’m calling Process Strategy 2.0:
1. To streamline customer experiences in end-to-end processes, Process Strategy 2.0 will require aligned goals and supporting systems to manage work between partners.
2. To manage the rising tide of knowledge work performed by a younger generation of employees, Process Strategy 2.0 will depend heavily on social collaboration tools.
3. To speed operations and improvement, Process Strategy 2.0 will make greater use of quick experiments and more agile management processes.
Examples: Forbes uses bloggers to create content and engages with readers, Nationwide Insurance is pioneering the use of collaboration tools to help its knowledge workers, and Google runs lots of experiments with new product or feature ideas and lets the market decide which ones deserve further investment.
Question: Over the rest of this decade, how do you think your organization will change its methods and tools for process improvement?