Comment: Be the James Bond for Your Company – Innovation in Process Excellence
by Cary Burch*
James Bond is an innovator in process excellence, if for no other reason than because he shows considerable talent for utilizing the tools available to him in just the right way at the right time to substantive effect.
Process excellence brings forth a vexing paradox in organizations. Just when companies are at their most successful, leaders are less willing to make the changes and take the risks necessary to prepare for the next wave of success. Through the insights of James Bond we can understand just how critical it is to continually question the dogma of what tools are currently used when, and get to the root of how more active and iterative assessments must be of the tools we use and their timing to best contribute to our ongoing success. Question everything, and use every tool at-hand regardless of intended purpose, in order to complete the mission.
Innovation and process excellence are not necessarily seen as halves of the same whole, so to get us thinking about how these efforts can and do coexist today, we look to some of innovation’s masters Christensen and Raynor of The Innovator’s Solution who state:
“Innovating managers often try to start new-growth businesses using processes that were designed to make the mainstream business run effectively. They succumb to this temptation because the new game begins before the old game ends. Disruptive innovations typically take root at the low end of markets or in new planes of competition at a time when the core business still is performing at its peak – when it would be crazy to revolutionize everything. It seems simpler to have one-size-fits-all processes for doing things, but very often the cause of a new venture’s failure is that the wrong processes were used to build it.”
The above does not have to be of considerable consequence. Rather, we can embrace this reality and choose to do more with what we have available. To truly innovate, to seek such ends as starting a new-growth business, we have an opportunity to assess just how useful our existing approach to process excellence is, and both purposely and pointedly innovate where the needs of the new will not be quite met. Returning to our Bond example, then, what would these new tools look like? Here are three useful examples. They don’t allow you to breathe under water, jetpack your way out of trouble, or cut the ropes which bind, but they can get us all thinking about the aspects of process excellence we might just be taking for granted.
Innovating the Selection Process. Selection remains one of those hard-won lessons of innovation where approaches continue to diverge even among the most successful of innovative companies. So rather than identifying what any one firm does ‘better’ when in comparison to its peers, we look to better understand the nature of those selections which are indeed made. According to Nagji and Tuff, in their article on Managing Your Innovation Portfolio, roughly 20% of all innovation activity should be dedicated to adjacent innovations (those sharing aspects of both core and transformational innovations according to the authors), and approximately 10% of innovation activity on truly transformational innovations. Yet this decision criteria is only half of the story. The other half has everything to do with how potential selections are submitted for consideration among the business’ available real estate on the innovation matrix. In short, this is done via who we might call innovation champions. These are individuals high enough within leadership to allocate resources to a potential project, experienced enough to filter ideas through their seasoned experience, and connected enough to see each project’s strategic potential. If an idea is not one a champion will back, there is a good chance it did not make the cut for a reason. Ideas are welcomed from all over the organization, and it is the onus of each champion on your team to ensure that every idea worthy of consideration is heard, regardless of its origin story.
Innovating the Design Process. We cannot review the tenets of process excellence without a nod to Six Sigma and what it has done for the study, structure, and implementation of process excellence throughout industry. Yet even as Harry and Schroeder comment in Six Sigma: The Breakthrough Management Strategy Revolutionizing the World’s Top Corporations:
“The higher the quality that is designed into a product, the lower its cost. In fact, 80 percent of quality problems are actually designed into the product without any conscious attempt to do so. Companies implementing Six Sigma find that the overwhelming majority of defects are created during the design process.”
So what do we do about this? We innovate what is feeding the design process. Customer ethnographies continue to grow in popularity. Yet an additional tool which can be used to innovate this area of process excellence is ethnography’s close cousin among approaches to qualitative research, grounded theory. Ethnography is suitable for permitting us to understand a great deal about the customer culture driving the many customer inputs affecting the design process, yet the difference between ethnography and grounded theory is the latter then looks to develop theory around a particular phenomenon. Whether this be used for the design of a social media site around how persons of a particular age interact, an exercise program for a given demographic based on approaches to understanding community, or a grocery delivery service first understanding in what situations a customer would feel comfortable and willing to use such an offering.
This approach looks beyond the commonalities and dominant characteristics of a culture, it looks at the relationships between members of that culture and the context according to a specific event, decision, interaction, or time period. As described by Charmaz in Constructing Grounded Theory, “Gathering rich data will give you solid material for building a significant analysis. Rich data are detailed, focused, and full. They reveal participants’ views, feelings, intentions, and actions as well as the context and structures of their lives.” This additional layer of context and therefore potential for understanding of a culture given among a phenomenon of choice, means the difference between another customer ethnography, and a plan for addressing a targeted facet of the same studied customer culture.
Innovating the Measurement Process. This is another area where the discipline of Six Sigma has all but given us the book on how to do this properly. It will not be the intent of this writing to sway you away from the proven methods of measurement as established by Six Sigma long ago. Rather, I do wish to include mention of a way in addressing those same measurements which asks for a more adaptive approach to using them. First with considering what we are to adapt, we return to Harry and Schroeder once more on the task of benchmarking as a specific area of measurement. From their Six Sigma text they state, “Companies should always know who their strongest competitors are on a process-by-process basis, as well as at the product and business levels. They should consciously seek to understand how their strengths and limitations affect customer satisfaction and profitability.” Adding an adaptive layer to this practice, we then ask ourselves a number of questions regarding intent. I believe an exemplary list of such questions assembled comes from Hubbard in How to Measure Anything: Finding the Value of Intangibles in Business. He asks:
1. What is the decision this measurement is supposed to support?
2. What is the definition of the thing being measured in terms of observable consequences and how, exactly, does this thing matter to the decision being asked?
3. How much do you know about it now?
4. How does uncertainty about this variable create risk for the decision?
5. What is the value of additional information?
These questions serve a dual purpose. First, they permit the organization (and/or its innovation champions) to determine what measurements make sense for a given initiative based on that initiative specifically. Additionally, these questions guide, direct, and shape all forward performance reporting whether in dashboard or report form.
In addition to the increasing number of tools at our disposal when seeking innovations in process excellence, there exist a number ways to innovate at the very foundational level of the processes under revision here. Open standards as but one example, provides a meaningful template for such foundations. We thus finish with an interview on open standards with Michael Zeller – CEO of Zementis, a provider of enterprise level solutions for big data and predictive analytics – who notes:
“From my vantage point in the software industry, I see significant evidence that open standards are one of the principal drivers of innovation. It is important to distinguish routine product development and R&D from meaningful innovation – that which drives substantive change in a market vs. merely making incremental improvements to existing paradigms. Meaningful innovation drives sustainable competitive differentiation for companies and ultimately reshapes markets. While a single company can achieve innovative breakthroughs, doing so on a consistent basis and in a scalable manner is challenging at best. Additionally, the likelihood of subsequent innovations representing true breakthroughs diminishes over time. A process with a built-in bottleneck and diminishing returns simply isn’t going to be a successful process. Innovation based on open standards solves this conundrum, by introducing concepts from numerous sources into a pool for consideration, letting other parties evaluate and modify those concepts, and critically, allowing market forces to decide what is and isn’t effective. Open standards break down proprietary barriers and create a sustainable, virtual cycle for innovation process excellence. The concept of open standards for innovation is not merely applicable to the technology sector, but also to other industries and even to organizations operating in non-business environments.”
* About the Author: With over 20 years of software and technology experience, Cary Burch is currently SVP of Innovation for Thomson Reuters Corporation and has held various C-level executive positions in his career. Mr. Burch is a CEO, author, innovator, investor and has an MBA from Pepperdine University. http://www.linkedin.com/in/caryburch http://thomsonreuters.com/
The Innovator’s Solution
Managing Your Innovation Portfolio
Six Sigma: The Breakthrough Management Strategy Revolutionizing the World’s Top Corporations
Constructing Grounded Theory
How to Measure Anything: Finding the Value of Intangibles in Business