Technology: Enabler or inhibitor of improvement?
For those practitioners that are not paying attention, emerging technology is playing a major role in reshaping the playing field of continuous improvement. Many organizations have morphed themselves from geographically and country-specific sites into a global network of complex, knowledge-based transactional processes.
Manufacturing, in which many process improvement techniques evolved, represents a declining percentage of developed countries economic activity. Sure, manufacturing is still part of the chain, but a very small component in terms of the fully loaded costs of doing business globally.
Organizations have morphed
The challenge of this transformation is that improvement practitioners are not able to use their normal senses to identify issues and new opportunities for improvement as they once could on the production floor when measuring yields, viewing excess inventory, listening to equipment vibration, detecting odor from poor ventilation systems, and the like.
Personally, I have observed too many unsuccessful "after the fact" attempts to port over Lean manufacturing and other shop floor-based improvement tools to the transactional areas with little actual results. Some consulting firms have guided their clients through months of blind effort value stream mapping every process in the office with no purpose or specific problem in mind.
I call this "Field of Dreams" improvement - if you follow the tool, the results will automatically come. The hard truth is that these naive efforts often lead to a dead end of "now what do we do?," and does not serve much use other than a non-actionable, out-of-date reference covering a conference room wall.
I walked into another organization that had "5S"ed everything in the office including the copy machine, personnel and financial file cabinets, the paper cutter, and believe it or not - all of the individual fixtures in the rest rooms.
When executives finally see these types of results, the effort is quickly viewed as "non value-added" and therefore not necessary. But improvement is always necessary, and these false starts have demoralizing effects on people and teams that are sincerely interested in stepping up and becoming the champions of improvement in their organizations. In the transactional space, much more improvement creativity and innovation is needed than the traditional production approaches with its manual kanban cards, 5S exercises, symbolic signage and storyboards, and beautification exercises.
Technology Clearly Enables Improvement
Today, new opportunities for improvement are coming at us in near real time, and it is necessary to adapt the philosophy and approaches of continuous improvement to this new norm. Additionally, the largest opportunities are the ones that we do not know about yet. Technology is the enabler of identifying and harvesting these new improvement opportunities.
A few of the larger enablers of continuous improvement include:
- Data Warehousing: A central repository of data and information which is created by integrating data from multiple disparate sources. Data warehousing improves data quality and integrity by offering a repository of information that represents a single version of the truth. This is a must when attempting to improve complex transactional processes.
- Business Analytics: The ability to analyze process performance in real time and make the right evidence-based adjustments. Business analytics enables us to execute what was once completed in a project, in real time using a critical thinking process that we refer to as a SIDAM (Sense, Interpret, Decide, Act, Monitor . . . and continue repeating the process. Business analytics provides that "6th sense" needed for transactional process improvement because users and practitioners cannot sense problems before and during the point when they happen, (i.e., feel an invoicing error, hear an incorrect shipment, touch new products that will be late to market or include field reliability issues, see premium freight, or smell a customer service or warranty problem). Silly analogies, but very true in transactional process improvement. In the transactional space, most organizations learn about problems after the fact.
- Digital performance dashboards: This provides the ability to measure performance as it is occurring, almost like the stock market. Some of our clients have manufacturing work cells where assemblers complete their work, wand the product, and pass it on to the next associate in the cell. Productivity and quality are measured in real time at the cell and individual level. Another digital panel provides a Pareto analysis of problems experienced during prior builds and specific work instructions to prevent these unexpected defects. Other organizations view real time sales progress to the territory, region, and rep level; evaluate global supply vs. demand positions; monitor contractor quality performance; monitor distribution center and 3PL performance around the globe - and take the right data-driven actions to minimize problems. Well designed digital performance dashboards encourage real time engagement, empowerment, and self management.
- Virtualization, Mobility, Cloud Technology: This allows for the ultimate management by walking around. In traditional Lean thinking, there was a saying that we "go to the Gemba" (go out and observe the workplace). In retrospect this is a limited idea. Technology has now placed the Gemba within our fingertips on our iPads and iPhones, on a laptop at a table at Starbucks, in a Go-To-Meeting session, in our automobiles . . . and more often than not at our children's soccer games, baseball games, while dining in a restaurant, shopping at the grocery store, the bedroom night stand, and everywhere else. We are connected 24/7 in both our work and personal lives thanks to technology. What's next? How about virtual meetings where participants can see each other but speak in their native language which is translated in real time for the rest members of the group. It's not that far off.
- Data Visualization: This is related to technology and deals with the emerging science of displaying data and information to convey ideas and conclusions effectively, both in terms of aesthetic form and functionality. Data visualization attempts to achieve a balance between form and function, thereby reducing perceptions and opinions about different individual's interpretations about the end result. This is an emerging science as practitioners and researchers create data visualizations that not only communicate information, but reduce measurement system error by engaging people in the right single interpretation of the results, and the right evidence-based corrective actions.
There is a series of underlying assumptions that make these components true enablers of improvement. The most important factor is that an inseparable fusion of technology and improvement must exist in the implementation process.
How are we doing?
In other words, organizations cannot pursue these enablers in isolation of business process improvement without severe consequences.
The improvement opportunities in these complex transactional processes are huge: millions of dollars of opportunity in a single project. Harvesting these new opportunities requires the organization's ability to evolve toward a state of Improvement Excellence™: improving how they improve through innovation and the correct fusion of improvement and enabling technology.
Technology Can Become an Inhibitor
There is no doubt that technology is evolving faster than organizations can assimilate it successfully. Unfortunately, technology is also pushing the immediacy and instant gratification factors of decision making. The future is all about the correct fusion of formal structured and deliberate improvement with enabling IT.
This future includes how to get the most out of existing technology and integrated enterprise architectures, and assimilating emerging technologies such as business analytics, unshakable performance dashboards, cloud computing and virtualization, and other capabilities as a strategic weapon of global competitiveness.
Technology is a huge game changer for improvement because it is transforming the traditional wave (batch), project-based linear waterfall approaches of improvement activities of the past into living, real-time improvement. As we mentioned earlier, the future of many elements of improvement will occur in more of a Sense-Interpret-Decide-Act-Monitor (SIDAM) mode.
The historical problem with emerging technology is that it is usually viewed from too much of an IT perspective and not enough from a business integration and user development perspective. Currently there exists a huge missing link between the human talent development, and the technologies being marketed by the software community such as cloud computing, event driven performance dashboards, business analytics, and data visualization.
A major consideration of technology-enabled improvement that must not be overlooked is that the real intelligence still lies in the improvement practitioner and the user community in the form of human intelligence. There is no improvement intelligence software available that instructs and/or executes improvement automatically, and we cannot replace the tough work of improvement with some new mobile iPhone application.
These complex transactional processes include a lot of unpredictability, professional judgments vs. hard data, a high degree of informal activities underlying a formal process, and fuzzy cause-and-effects in space and time. The seasoned improvement expert knows how to use the organization’s integrated enterprise architecture and other applications to trace transaction streams like a detective conducting transactional forensics as they reconstruct the waste crime scene of the process or look for hard evidence of the supposed problems and opportunities.
Transactional forensics is a very appropriate name for this approach: it involves setting up deliberate process experiments for transactional stream mapping and classification to either discover the root causes and magnitudes of problems, and/or to verify that problems have been eliminated through the right data-driven improvements and corrective actions.
There is another emerging cultural challenge called the XBox and MTV generation who grew up on technology and uses it as a matter of fact.My son can text blindfolded faster than I can type, and I often find him capable of instant answers about tomorrow's weather or an address and GPS directions for a new restaurant! A closer look at these behaviors reveals that it is moving us more towards instant gratification and further away from critical root cause thinking and the social aspects of problem solving.
Today, many people send a text or email - any time of the day or night - and expect an answer immediately. The window of critical thinking is shrinking - or maybe closing a bit. The new generation of workers are using technology in many cases as an end rather than a means (or enabler) to the end. Just because something shows up on a display, it does not mean it is the truth or a fact. This discussion is not intended to be a criticism of our upcoming generations but to point out a radical shift in how we are dealing with problems.
Regardless of what technology is available, people must not forget that they still need to think and go through the basics of listening to and synthesizing information, drawing the right conclusions from fact-based information, making the right data-driven decisions, taking the right actions with technology, and making sure that technology is working well as an enabler of whatever they are trying to accomplish. What this demonstrates is an urgent need to integrate improvement and technology.
The process of improvement still relies on human intelligence to define and segment the right root cause information, analyze data with the right methodologies and tools, draw the right, data-driven conclusions, take the right fact-based actions, close the loop with the right performance metrics, and continuously repeat this cycle. The bottom line is that if you place technology into the hands of a user community that either does not know how to conduct true root cause problem solving, doesn't have the time, or does not believe that all of this is necessary, the organization is reduced to "winging it" with new technology and achieving the wrong results.
Organizations have talked a good game about integrating business process improvement and technology in the past. The sheer availability of never ending emerging technology and distribution models (e.g., cloud computing, Software as a Service or Saas, mobility, web-based architectures, etc.) presents an opportunity for organizations to take improvement into the next logical generation and discover new opportunities beyond belief, or accelerate mediocre or bad decision making - also beyond belief.
The user community must also develop both a deeper knowledge and appreciation of end-to-end business processes, and the core competency of structured and disciplined improvement. Otherwise technology is reduced to providing more useless information quicker - the old data rich, analysis poor syndrome. It is the equivalent of replacing the war rooms of manually prepared performance charts of the past, with digital dashboards that contain even more conflicting and non-actionable information.
People, knowledge, and talent create the improvement side of technology-enabled improvement. The integrated enterprise architecture provides the technology side of technology-enabled improvement, and this combination also optimizes the value and ROI of enabling IT investments. In terms of Lean Six Sigma thinking, the interaction effects of technology plus improvement combined produce much greater benefits than treating the two as mutually exclusive. History clearly validates that organizations have tried one without the other for decades and it does not create sustainable best-in-class business processes.
Enlightened Leadership Makes Technology Enabling
We cannot discuss technology-enabled improvement without mention of the importance of a new leadership style and approach. Leadership is always the "hemi engine" that enables continuous and sustainable improvement. Leadership is also the reason why the word "continuous" keeps falling out of continuous improvement.
A familiar saying in the continuous improvement arena is "the soft stuff is the tough stuff." Enlightened leadership is the engine of success and sustainability - and this includes technology-enabled improvement. The specific elements of improvement strategy, planning, and leading great transformations are often oversimplified or overlooked completely, and they are covered superficially at best in most books on improvement. All executives embrace the concepts of internalization and culture change, but many put little real commitment and effort into it because of its ambiguous and intangible nature. Consequently, cultures in organizations happen more by default than deliberate design, creating oscillating performance from improvement initiatives.
The Chief Information Officer (CIO) must play much more of an integrator role with technology-enabled improvement. This enlightened leadership role leads cultural transformation to become a definable process - with deliberate leadership behaviors, choices, and actions . . . and definable suppliers, inputs, practices, outputs, and customers. Cultural transformation occurs when the right executive behaviors, choices, and actions are guiding this process. Enlightened leaders recognize the potential of technology-enabled improvement as a springboard into future success. They make the right investments in technology infrastructure and human capital to achieve new levels of greatness.
Great organizations do not wake up one day and discover that they have a winning code of conduct and value system; their executives have deliberately created it with a higher moral purpose of improvement, deep passion and unwavering commitment, a bold plan, and the patience to play out their strategy over time. Continuous improvement is first and foremost, the only cultural standard of excellence, and a highly recognized and valued enabler of strategic and operating success. Furthermore, it is a never ending process of reinforcement and renewal. Improving how we improvecannot be accomplished with old thinking because too much is continuously changing the structure, processes, and social complexity of improvement.
For the most part, traditional improvement as we know it is a commodity especially in its concept state and its traditional manufacturing applications. More fads, meaningless academic and intellectual discussions, showboat demonstrations of improvement and "knowing how to" improve is not good enough in this challenging economy. There is a serious need to take continuous improvement to the next levels of superior performance, and we have the right formula for success to make this idea a reality with huge payoffs.
Technology is the new game changer, but it will not make the permanent process of enlightened leadership any easier. It all begins with enlightened leadership that is committed to continuous improvement as first and foremost, the only acceptable cultural standard of excellence, and a critical enabler of strategy execution and business success.
This next generation of success depends on implementing continuous improvement with a combination of Deming's back to basics, emerging technology, creativity and innovation, and adaptability across a wide range of industries and operating environments - and doing it in a deliberate and systematic way that is superior to everyone else around the globe.
Technology-enabled improvement has widespread applications in industries less experienced with continuous improvement such as healthcare; federal, state, and local governments; municipalities and airlines; energy and utilities, and many other industries. However, the moral purpose of improvement is much greater than improving P&L statements, growing the revenue line, or cutting expenditures and entitlements.
Both of the topics discussed here (improvement and technology) are extremely complex and difficult to implement correctly, and even more difficult to grow the tangible benefits and sustain the continued progress of success. Emerging technology and major transformation in general has a learning curve,and I am confident that we will also figure out how to rebuild a stronger global economy through this next generation of technology-enabled continuous and innovative improvement.