Synopsis: How “IT Changes the Way You Compete” is the same in many ways today as it was 30 years ago, as new waves of innovative technology wash over organizations. What’s different today is that these successive waves of tech applications have left every organization with a critical core of digital capabilities. Now that IT is essential to the execution of nearly every job, as we move into the future, managing IT will be an even bigger part of yourjob.
Examples: ING puts business managers in charge of system projects
Question: Has your role in managing IT changed during your career?
Synopsis: GE’s “insourcing" of appliance manufacturing to the U.S. has been trumpeted as a major reversal of the trend of sending jobs abroad to lower cost locations. I see it differently: as a "NUMMI deja vu" story. NUMMI was a joint venture of Toyota and GM, where Toyota took over one of GM’s worst plants and turned it around with a new management system — using many of the same people and the same unions. At its core this is really a process and a culture story. GE Appliances is proving once again that the balance of process and people, aligned with a clearly articulated and understood purpose and vision, is the source of improved performance and capability development.
Question: Have you seen a new management system dramatically improve an organization’s performance and capabilities?
Synopsis: Start-ups tend to be anti-fragile; large, successful organizations tend to be fragile. Most successful organizations do not like volatility, randomness, uncertainty, disorder, errors, stressors, and chaos. Yet we are in a world where disruption and randomness are increasing. Organizations that gain from randomness will dominate, and organizations that are hurt by it will go away. Crises and major disruptions are not an abrupt departure from what anti-fragile organizations do continuously — solve problems.
Examples: Tesco has developed and maintained mechanisms for listening to customers and a brilliant problem management system that quickly identified needed supply chain and other improvements. Toyota’s reputation took a major hit in 2009 and 2010 with the largest car recall in history followed by a massive tsunami that wreaked untold damage on its international supply chains. After both crises, Toyota recovered because of its extraordinary ability to solve problems.
Question: Will Tesco follow Toyota and prove it is anti-fragile too?
Synopsis: Marketing is increasingly uncovering new customer insights (using “Big Data” and “Analytics”); yet when it turns to operations to translate the insights into action, it hits a wall. The people in operations are too focused on fulfilling internal requests and service agreements to worry about customers, the ones that pay real money. Making quick, small changes (“Agile Scrum”) offers a way to collaborate across functions.
Example: ING has used Agile Scrum as a key tool for collaboration across Marketing, IT, and other functions in processes such as developing new products and in marketing campaigns.
Question: How have you seen marketing and IT collaborate to put customer insights into action?
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?