Capgemini Consulting VP Operational Excellence Dr. Paul Donnellan: Process excellence must evolve or risk going the way of the dinosaurs (Transcript)
The impact of digital technology on today’s businesses has resulted in a revolution in the way we produce and use products and services. Organisations that ‘get it’ have evolved into a new breed of business - the Digirati – connected, agile, and very profitable. So what impact does the growth of digital have on process excellence?
"The new Digerati PEX professional looks and behaves differently than how we did in the 1980s or 90s," says Dr. Paul Donnellan, Vice President of Operational Excellence at Capgemini Consulting. In this PEX Network Boardroom Perspectives interview, Donnellan discusses the ways in which process excellence will need to change in order to support the digital future and he comments on the new skills and capabilities that the process practitioners need to have.
Why didn't I change when I had the chance?
This transcript is based on a video interview. To watch the original interview, click here. (http://www.processexcellencenetwork.com/video.cfm?id=2304)
Please note: this transcript has been edited for readability.
PEX Network: Let’s start by looking at the big picture: what do you think are some of the big trends out there that will impact businesses in the decade ahead?
Dr. Paul Donnellan: I’d like to focus on the impact of digital technology. Organisations that are embracing digital are driving a revolution in the way they produce products and services. Digital is also affecting how we, as consumers, absorb those products and services.
Companies that "get it" – we call them the Digerati. They’re a new breed that behaves very differently and I think it’s essential that PEX professionals really get on board with this trend and help to shape it. I think we have a lot we can add as process professionals. But embracing this trends also means we need to behave and act in different ways as well.
There are other major global trends: economic recovery, energy costs, changing demographics such as ageing affluent populations in the West and young and ambitious populations in Asia. These are all factors that influence the business landscape.
However, I think digital technology will be a key driver. It affects everybody: me, you – everybody.
PEX Network: Let’s hone in, then, on the digital technology question: what impact do you see it having on approaches to and perhaps even the nature of operational excellence?
Dr. Paul Donnellan: I’ve been in the Process Excellence business for about 30 years now. My apprenticeship was in the 1980s; I worked and understood the philosophy of Deming, of Crosby. I was part of the Six Sigma movement, of course, in the 1990s and the recent emergence of Lean.
I’ve seen a long evolution of different methods and approaches. They’ve all made important contributions; they’ve all left their mark. But there are two key things I’ve learnt: firstly, continuous improvement is something that I have to do as an individual. I need to change. In contrast to that, though, the fundamentals don’t change. What we need to do in the Process Excellence arena is be true to those principles but to evolve them into a different way of working in the digital age.
PEX Network: Do you think, then, that traditional process improvement methods like Lean and Six Sigma are "fit" for the challenges of the next century?
Dr. Paul Donnellan: If they don’t evolve and continuously improve, then they’re just another dinosaur that we can forget! We need to make changes – not in the fundamentals principles – but in the way in which we do our business.
The new Digerati PEX professional looks and behaves differently than how we did in the 1980s or 90s.
For instance, I try to be much more attuned to the complex nature of process; it’s no longer just a linear, straight through process. The customer expects an "all channel experience". This creates multiple processes, multiple entry points into an organisation. So we need to think in that more complex way.
When we’re doing things like process mapping, we don’t want to be doing that in a workshop that we have to bring people to. Instead, we want to be process mapping where the value is added – i.e. at the gemba. That is so much easier to do now with new technology. Get your tablet, get your iPad and there’s great software out there that let’s you map that process in real time, add comments, add video. And it’s all captured electronically, so much better than it was.
Also, I think the way that we as a community can be very inward looking and quite conservative. We love our process, we love our methods and we totally respect expertise of the individual. But, I think that’s changing as well.
The fact that all the knowledge of mankind is on the internet creates new challenges and opportunities when you consider how an expert adds value in process excellence. Everybody can be an expert to some extent now, so the way you gather that expertise is going to change.
PEX Network: What trends are you seeing in how your clients are approaching operational excellence?
Dr. Paul Donnellan: We see a mixed picture as this is still early stage. The ones that have embraced the digital transformation approach are seeing great changes. They’re seeing positive changes in profitability; our research has shown that the Digerati companies are achieving 26% profit uplift over the equivalent.
The methods each of them employ are different but all of them are connecting better to the customer. For instance, Burberry’s CEO Angela Ahrendts came in and completely transformed an underperforming company into a very profitable enterprise – through digital.
Digital let’s you have a total connection with Voice of the Customer. We always talk about Voice of the Customer; it’s the first deliverable within Six Sigma. Digital allows you to engage with those customers so much more effectively.
Let me explain. The way many companies used to approach it was this: "we have a product, we have a brand, we hope you like it". With digital you can almost co-develop products with your customers because the intimacy is so strong.
Burberry have done a fantastic job in developing customer intimacy. They’ve not just focused on the "front end" though, they’ve totally revolutionised their back office processes through more traditional efficiency improvements, but driven by digital technology.
Other, traditional industries, have made huge progress as well. There’s nothing more traditional than insurance; Zurich, Allianz have great digital programmes that are really quite mature. There’s always more to do, but they’re connecting their organisation end to end, just like PEX professionals always tell their clients they should do, but they’re able to do it with digital technology. And they’re operating globally - so it’s very effective when it’s done right.
PEX Network: Lean and Six Sigma and other operational excellence consultancies are a bit of a commodity these days; how does Capgemini then distinguish itself from the other consultancies on the market?
Dr. Paul Donnellan: We take the digital transformation agenda very seriously, so we’re organised around digital internally. We have a very positive partnership with MIT, with the Centre of Digital Business, which has been a very interesting collaboration. It’s produced a lot of data, a lot of insights for us. We think we’ve learned about a lot of the levers to make digital transformation happen, and we’re well placed in that space.
It’s not just me that says that. Independent research firm Kennedy have said that that Capgemini Consulting are number one in terms of digital transformation consulting. We’re very proud of that.
But importantly, internally, it’s important to us to live and breathe the digital agenda, so we recruit against a digital profile. We train our people towards digital thinking, and we reward and promote based on digital transformation. So we’re all changing, myself included. Even some of the older dinosaurs are now getting it. I’d like to think I am too, and as a result we’re having great fun. It’s fun in the Digerati party, and everyone’s welcome.