The "fast eat the slow": Accenture’s Mark George on why the future is nimble (transcript)
What we see today is not just more volatility but volatility that comes at us at a much greater pace," says Mark George, Managing Director in Accenture’s Operations and Process Transformation practice. "As a result, organisations really have to bake in that ability to be nimble and to be agile. They're not looking for tactical, narrow solutions. Instead, they're looking to solve much broader strategic issues in a very safe and very rapid and sustained way."
In this interview, George describes why being big is no longer the advantage it once was, how companies have moved on from Lean and Six Sigma and why every consulting engagement begins with the question, "why?"
This interview is a transcript of a recent podcast. It has been edited for readability reasons.
PEX Network: What are the big picture trends that you expect to be shaping the business environment in the decade ahead?
An example of the perfect business?
Mark George: We see our clients needing to be more agile and nimble. All of our clients, regardless of what sector they're in, face ever increasing volatility. That means they are looking for solutions that will help them address near-term issues but also build an ability to take large strategic challenges and opportunities and shape the business execution engine that can address those and deal with those in a very agile and nimble way.
PEX Network: So how do you advise your clients to start preparing to become more agile and nimble?
Mark George: First of all, the majority of our clients are large organisations that have very complex landscapes. That can be both a challenge and a blessing. If we think about multinationals with very large footprints - like other complex organisations - the issues that they face in terms of managing costs, capital and growth, tend to be pretty complex issues. It’s not the sort of thing that you can solve by looking at the business one function at a time or even one BU (business unit) at a time. So you certainly, can’t look at it one process at a time.
What we help clients think about is how to take these large strategic issues and decompose them into a set of interrelated actions that will traverse the organisation and help align management and those on the front lines to execute in a more coordinated way that will drive larger outcomes. This is in opposition to what we see a lot of firms trying to do, which is a lot of knee-jerk reaction to disparate problem solving. This ends up giving some degree of local benefit but at the end of the day rarely moves the big needle.
PEX Network: So it sounds like really companies need to look at a bigger picture rather than just pieces of the puzzle. You have to look at how the parts fit together?
Mark George: That's right. I think that what challenges a lot of organisations is that sometimes they will try to self-diagnose. For instance, we had a client that was trying to improve its overall performance in "time to market". They wanted to improve the overall effectiveness of their R&D organisation. They came to us and said that they just wanted a map of all the processes. We pushed back and replied that you can map those processes but will that really depict the dynamic way that value is created in your company through R&D?
They were a little bit surprised by that dialogue. We suggested that we begin with the end in mind and talk about how they define success in R&D. Then let's reverse engineer that - if you will - into the various capabilities and competencies that they need to drive that outcome.
Some of that will be structural, some of that will be part of the operating model, spans of control, etc; still other parts will certainly be around process and functional alignment and governance. But then part of it will also be around policy and the way processes and functions intersect with technologies and systems.
Our approach begins with that North Star outcome: helping the client reverse engineer that and then understand how much is process as well as policy, system, structure. At the end of the day, what you end up having is an interrelated portfolio of opportunities. Many of them are process related, but it's a very specific targeted set of processes or functions you're going after as opposed to taking a very tactical bottoms-up, trying to boil the ocean approach to manage a process, which, may or may not be the biggest lever that you can pull to drive that outcome.
PEX Network: That leads us quite nicely into our next question, which is very much focused on Lean and Six Sigma. These methods are very process-driven methodologies and there's been some rumblings out there that Lean and Six Sigma as a brand has become somewhat toxic. There's been many instances of companies doing Lean and Six Sigma poorly and, as a result, some companies don't even tell employees that they're using Lean and Six Sigma tools anymore. Do you think that the brand of Lean and Six Sigma is dead and have we moved on to something else?
Mark George: We'll always have new opportunities, either driven by consulting firms or experts in the field that are looking at the next big thing. That's something we've seen for a long time. For many organizations Lean and Six Sigma have run their course. There are few places on the planet that you can't find courses being delivered or companies large and small, mature or immature, that are using some elements of the problem solving approach.
But you mentioned the fact that a lot of companies did it wrong or didn't invest properly in architecting the plan or thinking that it would solve everything, that it was a kind of panacea. That caused a lot of companies to go down the wrong path, underuse it or overuse it or abuse the approach and then get disappointed that the results didn't follow or the results didn't really go where they wanted them to go.
We look at Lean as being an approach that does two things. It drives agility and speed and it certainly, as we all know, helps to eliminate waste. We understand that to drive performance in an organisation, variability matters, defects matter and the voice of customer matters. We have very few problem solving approaches to do a better job of those things than Six Sigma.
So to walk away from the components of the Lean Six Sigma toolset and say, "we don't care about waste anymore, we don't care about variability anymore, the voice of the customer doesn't matter" - we know that's foolish. Many of the other components inside the toolset are just as powerful as ever. But what companies need to understand is that the components of Lean Six Sigma are necessary but they're not sufficient. Recently we have seen a shift towards the concepts of BPM.
If you look at complex organisations that need to drive an intersection between process and technology, BPM does a great job. It also does a great job in establishing governance, what we call the process of process management, where you actually treat your processes as though they were capital assets and you proactively manage them toward a predefined future end state as opposed to just a lot of disparate reactive problem solving.
So managing a process like an asset is a very prudent and virtuous thing to do, but a lot of organisations don't understand the business case behind BPM or think that it can only be technology driven or it's exclusively technology dependent. That isn't the case.
We find that there are many elements of a BPM suite that you can use in almost any business issue that you're trying to address in terms of governance, driving standardisation, common approaches, and understanding which processes in a firm truly drive differentiation and which of those don't.
The processes that are just keep the lights on, for instance, are the ones you want to standardise and industrialise. Lean Six Sigma doesn't have a strategy for doing any of those things I've mentioned; it doesn't have an ability to have a process management strategy, if you will. But if you pair its problem solving capability and powerful toolsets that are inside Lean Six Sigma, along with the broader BPM structure and framework, you can drive great value. The challenge is, however, that BMP in itself doesn't really have a very effective strategic problem solving methodology.
It's very good at capturing the world on a page and helping drive transparency – to get a true enterprise end-to-end view. But BPM doesn't have an engine that can solve big strategic issues.
What we try to find is striking a balance between being able to translate big strategic opportunities into an interrelated set of projects and improvements and embed governance.
BPM will help you drive sustainability, to drive accountability, ownership and is proactive management of processes, and then use many of the tools that are inside the Lean Six Sigma toolset to eliminate the defects, eliminate the waste, drive speed, drive certainty of outcome and embed that culture in the organisation through things like Kaizen and other approaches to help really get frontline people involved and engaged. So those are kind of the three dimensions that we see really helping clients drive substantive, rapid and sustained value.
PEX Network: I think that's a really great insight into how companies are thinking about Lean Six Sigma tools. Are you seeing any particular kinds of trends in the types of business challenges that companies are asking you to help them solve?
Mark George: If we look at where most companies are around the globe today, there is no doubt that we're seeing light at the end of the tunnel. It’s coming far too slow for many economies around the globe, but we're certainly in a different place than we were in the fall of 2008 when people were just so panicked about looking for ways to just survive the next quarter. We have a lot of those same challenges today but we're in a different position today, I believe.
We're working with clients that are looking a lot more at product development and how to drive profitable growth. Far fewer firms that we speak to today are in survival mode. Instead, they're looking at ways of out-executing their competition and capitalising on recovery. The concepts of basic fundamental working on margin optimisation, returns on capital, those will always be with us and they're no less relevant today than they were before, but there's certainly an increased focus on profitable growth.
So we need to understand really what drives that and how you again create an organisation that's nimble and agile to deal with volatility - whether it's geopolitical volatility, commodity costs, whether it's your biggest competitor just getting bought out. These are the kinds of changes that we see in terms of consolidation, in terms of geopolitical issues, in terms of commodity issues, and in terms of environmental issues.
I think what we see today is not just more volatility but volatility that comes at us at a much greater pace.
As a result, organisations have to bake in that ability to be nimble and to be agile. They're not looking for tactical, narrow solutions. Instead, they're looking to solve much broader strategic issues in a very safe and very rapid and sustained way.
PEX Network: So if you had to condense the year ahead for businesses down to one word, what word would that be?
Mark George: Volatile. It comes back to this theme that we're seeing. If you think about the velocity at which data flows through an organisation and you think about trends and the concept of digitization just truly shaking many businesses to their core and giving organisations a true leg-up when they can leverage digitization or big data.
These sorts of things are going to require organisations to be that much more nimble and that much more agile. Years ago it was the big eat the small; today it's the fast eat the slow. So as a result of that, being able to manage and leverage big data, digitization and really understand how we can help organisations leverage the right balance of technology, people, process and structure.
PEX Network: Turning towards your business: consulting obviously is quite a crowded market. There are a lot of consultancies out there that offer Lean Six Sigma and other process excellence services. How does Accenture differentiate itself from other companies that offer similar services?
Mark George: The first thing is that we get the topic off of the tools. As I mentioned earlier, companies will say we want to lean this process out, .
The first thing we typically ask is why? Explain how you've come to this point where you want to lean something out, to remove all the waste or why you want to map and capture the world on a page.
Frequently, clients have already gone through kind of a decision-tree process. Sometimes it's prudent thinking and sometimes it's not. Whether it is or isn't we want to make certain that we clearly understand what it is theyr're trying to solve because we are exclusively outcome focused. We want to make certain when we work with a client at the end of the day they can look back t and say this is where we were when we started working with Accenture and this is how the big needle moved.
The other thing is that we want to help the client drive economic profit and be able to embed a proactive approach to help them drive speed, agility, certainty of outcome and proactively drive toward a future end state, move from this reactive problem solving knee-jerk approach that so many of the process based discussions start with, as opposed to starting with the outcome and reverse engineer back and understand how much of that is truly process, how much of it might be structure, how much of it may be intersectioned with technology, policy and certainly capabilities and competencies.
All of our approaches help pull those elements together and I think that's a huge differentiator for us. In many cases the client will try to solve something when in fact it’s not being their core competence. In many cases they may be focusing on the 85% of the processes or actions that don't differentiate them at all. Perhaps what’s needed is a process management strategy to standardize and industrialize while strategically innovating on that which does differentiate. Or perhaps the best alternative is for Accenture to relieve them of the issue altogether by providing a Managed Business Service. Few firms can span this set of solutions