Beware the Low Hanging Fruit – It Might be Rotten
Why Some Improvements Might Not Be Improvements at All
There are always three basic questions you must ask in any business change, writes Dan Morris. The first is "What do we improve?" The second is "How do we improve it?" The third is "Can we do this." But you should also ask "Should we do this?" Here’s why not all improvements are good.
At the risk of an outcry of "What!" and "Oh Really!", I have to say that not all cost savings are as they at first appear.
The issue isn’t related to some benefit vs. cost formula. The problem is impact. This is what separates good from bad savings. It is very possible for changes to be individually beneficial and even add up to a real savings – while cumulatively causing great disruption to the business and the quality of products or services.
The problem is that narrowly focused improvements are usually looked at in isolation from the work around them. The simple fact is that the work in any organization is a series of interrelated activities or tasks that together perform a given business function: they take something in, do something to it, and they then produce something. This forms a type of business system – manual work, documents, decisions, and automated support. When this is aligned properly, there is a type of cohesiveness to the activity. When improvement is focused on part of this business system, the impact can be felt in a weakening of the cohesive bond between the activity, its flow, its automated support, the movement of paper, and the way decisions are made.
While the impact may be small for many or most of these focused changes, it builds. Over time it is this constant small weakening that evolves any business operation to mediocre performance. But, I want to stress that this is no one’s fault. It is the way business has run for longer than any of us alive can remember. It is the way it is. It is the way it has always been done. And, it is still delivering the same results.
But, even worse than its impact on a business unit’s work, is the problem of cumulative narrowly focused change on a process.
The fact is that a great many businesses really don’t have a handle on their processes. Most managers and most departments won’t even agree on what a process is. I recently looked at an open BPM web based group with a dictionary. They ask their members to add their interpretations or definitions of the terms. Right now, there are 13 different definitions for the term "process". And, actually most were different than mine – they were too narrowly focused. The ABPMP definition of process is:
Process - A combination of all the activities and support that are needed to produce and deliver an objective, outcome, product or service – regardless of where the activity is performed. These activities are usually a cross functional, cross organization aggregation of activities that work together to create an end product or service. Activities are shown in the context of their relationship with one another to provide a picture of sequence and flow.
Work changed in isolation has a ripple effect
The fact is that both small and big changes are often made without thought to a broad picture of the business or the downstream impact of the change. Not surprising when you stop to consider that few managers have the incentive to consider what happens outside their business unit. But, all work and support is tied together in a process, and many processes are tied together to deliver products, services, and strategy. When part of this work is changed in isolation - as it usually is today - the impact will ripple. And like an elastic band, process will be able to absorb a certain amount of change before the cumulative impact will be felt. But it will, one day, be felt!
This is what has driven the past cycle of business transformation. Companies do not control change and let all business unit managers run and change their operations at will. These managers do change their work and they save money and improve their operations. But, they do it with no concern for impact on the processes they are part of.
Eventually the impact adds up and the overall work (the process) gets so ineffective and inefficient that the band-aids no longer work. At that point, the way work is performed mandates radical change – transformation.
Change at this point is disruptive, chaotic and causes hard feelings in almost everyone as they are told they are guilty of causing the problem. But, they are not the cause - at least not directly. The cause is the approach where change is approached in isolation.
Following conventional business management wisdom, once this disruptive change is finished, the operation goes back to the old ways and managers continue to make isolated changes within their business units until eventually the cycle repeats itself. Today we understand the real culprit and we know that any business improvement perspective needs to include all the activity in a process to properly evaluate changes.
The concept of continuous improvement was created to help deal with this reality. But, unless applied at the process level, it also fails to improve the root cause of the problem – a focused way of looking at problem resolution or efficiency improvement. The same is true for all improvement approaches. That is why creating an understanding of process is so important. It also is why any manager should work with a process management group in their company to determine the impact of any change to work or an application system before it is made.
The Myth of Low Hanging Fruit
There are always three immediate and basic questions in any change – assuming you know what work needs to change and why. The first is "What do we improve?" The second is "How do we improve it?" The third is "Can we do this?" I recommend a fourth question: "Should we do this?"
The premise of this column is really addressing this fourth question. "Should we do this?" As we have seen, because impact ripples to work downstream in the process and to other processes, the answer may not be the obvious "yes" – even when the change is associated with improvement and benefit. In reality, not all improvement is really improvement and benefits are is not always real benefits. This is what makes the belief in the value of low hanging fruit improvement a myth. Some of the fruit that looks good is really rotten.
Clearly some of this immediate, "just do it", improvement is good and should be done. But, my contention is that most of these opportunities should be considered in a broader context before they are done. Here again, there is no definitive ‘thou shalt" or "thou must". I have often recommended simple, obviously narrow, impact "low hanging fruit" changes to be made.
I advise people that any of these changes may need to be backed out if they cause harm and that any of them may be redesigned out of the workflow when a new business solution is created. I also advise clients to send out notes to other managers who receive their group’s output, letting them know what has changed and asking them if there is any impact on their operation. In the absence of a process management group, this type of communication and concern for performance just makes sense.
Not all change is good for the customer
Change will also affect the customer. The effect may be indirect, but all changes eventually affect the customer. So is there a customer advocate involved in your change consideration? Internal problems caused by change can be hidden. But, they will eventually build to affect quality or price and then affect the customer directly. Other changes will have an immediate and direct effect. In both cases, as soon as the change affects the customer, the impact will be felt – for good or not. Without consideration for internal process impact, non-obvious change related customer impact cannot be determined and customer impact is a roll of the dice.
Process is about work – activity, flow relationships, application support, and rules. But there are other factors that must be considered in any change – materials, applications, IT infrastructure, ease of customer interaction, the creation of barriers between the company and its collaborative partners/suppliers/customers, and a great many other things. All must work together to form the process and create the product or service. Change, even small change, can affect all of these parts of the process and the quality of the product or the way the company interacts with its customers. This is a variation of the value chain concept, but the message is that all of the parts of the process must work in harmony and all must consider quality and the customer.
In an old example, for instance, a prominent manufacturer of high end clothing was looking for ways to cut cost. The CFO, working with the purchasing department, decided that they could save money by using a lighter gauge thread to sew on buttons. They did and they saved. But, in a few months, returns started to come in and customer service was given the job of finding out what was going wrong. They found the problem was that the buttons were falling off and the garments were being returned. The savings turned into real loss as replacements were made and many of them returned. The real loss was felt long term in a drop in sales. People just didn’t trust the manufacturer and the quality of the garments.
But, are purchasing and their changes part of a manufacturing process? Arguably it is not a direct part of the process. It doesn’t affect the tasks. But it is part of the quality of the deliverable, if not the work. As such, in my broader definition of process quality and everything that affects it, is part of the process. So, I include many things in my consideration of process that some may omit. I personally find that this gives me better understanding of what is going on and a better ability to consider change.
This view also makes these indirect components part of the interrelated value chain of the processes involved in delivering and supporting a product. In the example above, the question that first comes to mind is: "where was quality control in this whole thing?" "why didn’t they step in?". They should be a part of any process and any change. If they did approve this change, the quality control manager was probably not eligible for a bonus. But, something tells me that this change happened in isolation as the purchasing manager tried to be a hero and cut costs. Of course, this example is relevant only if you take a broad view of what a process is and what is part of it.
The simple fact is that if all parts of the process had been considered and if quality control had been involved, things may have been different. Also, the clear fact that the customer was not considered and the company's reputation for quality products was not considered, points to a very narrow view in deciding on the value of this change.
Innovation drives change. Some may be "low hanging fruit" related and some may be broader. But, what is innovation? A lot of simple changes are called innovative, but are they really? Are they really creative and new or are they just simple obvious fixes. And, is all innovation good? For most, if a suggestion is creative and new, it is probably innovative. And, innovation is always good. But, is this right?
I personally think it is right, if tied to the right view of the operation (process) and includes all the appropriate supporting activities (such as quality assurance and change management). If these conditions are present then it will give birth to a much better way of doing things. But innovation will not simply happen because you are changing things. Also, a change will not simply be good because it is innovative. Again, the issue comes down to a broader view of impact in determining worth.
If the innovative change is looked at in isolation or as applied only to a small part of the activity in a workflow it will again run the risk of having an uncontrolled, potentially disruptive, impact on work downstream or on other linked processes.
Again, if looked at in isolation, the justification can change – even innovation can cause more harm than good.
Yep, that brings us back to process again and taking a holistic view of improvement change (improvement/problem resolution) and innovation. I propose that only when change, innovation, cost reduction or quality improvement are viewed at the process level can the impact be determined and a valid decision on the "Should we do this?" question be made.
The simple fact is that all change value is based on true impact. That cannot be considered in the isolation of the few tasks or activities. There will be a broad impact and a ripple. And, it is not always directly related to the size or scope of the change. Even small change can have really big impact – especially when it is to a rule or a standard. Everything in a business is interconnected. That is the foundation for the movement to a process centric approach to change and a process view of the company. It is also the basis for the growing acceptance of process management.
Clearly, from this column, I believe strongly in the need for a process view of change and a broad consideration of impact. But, this is only my opinion, and as always, I welcome your thoughts.