Fit for purpose
Reality can be harsh, particularly when it shatters imagery we’ve valued. There is imagery and perceptions that are aligned with the beliefs we’ve allowed to become paradigms, and those that are aligned with positive values are really important. This week has had a few of those harsh shattering moments. On this Veterans Day, we reflect on the priceless sacrifices that those in uniform have made on our behalf. I’ve always had the belief and imagery that those that perish in the roles of our guardians against harm are treated with sacred respect and their internments are handled with priority and protection. The US Air Force has apparently thought differently or has forgotten who we are and who they are supposed to be. The desecration and obscene treatment of our fallen is criminal, not just incompetent. This obscenity has been going on for a very long time and covered up in the interest of image preservation.
Coincident with this revelation are the discoveries of the criminality against children committed within the halls of what I believed to be one of the most respected and morally driven football programs in the NCAA, Penn State. This obscenity has been going on for a very long time and covered up in the interest of image preservation.
On Wall Street, there are groups of protesters demonstrating outrage at the abuses of many in the corrupt destruction of our economy and millions of lives. Sadly, this obscenity has been going on for a very long time and covered up in the interest of image preservation.
This pattern should not be a surprise, but its current frequency is important. We’re in an age where transparencies will eventually conquer opacity. This age of social media creates real problems for those accustomed to paying off problems and sweeping them under carpets. If we say something here, it becomes viral before we get to say it there. Political candidates in the last few years of election cycles are living and more frequently dying from convenient and inconvenient memory lapses, gaffes and violating the adage from Confucius of “It is better to remain silent and be thought a fool, than to speak and remove all doubt.”
This age of transparency is putting lots of light on the bad, but far too much of the good remains in the dark. We savor the salacious and crave for sin and guilt, much like public the hangings that were once a big family event. The despicable deserve the light, much like the roaches or other vermin, hidden, be they church or state, home or work, big or little leagues.
However, these are not who we are as a society, and we can’t get to where we need without the light on the many whom and what that are good and noteworthy. Despite the shameful absence of statesmen and leaders, good and great abound, perhaps right next to us. As this holiday season begins and Thanksgiving nears, let’s identify a good or great each day and give thanks and light to them.
When the author, Marshall McLuhan wrote the phrase “The medium is the message” he was articulating the powerful interrelationships that exist between the two. It’s a good illustration of the Yin-Yang symbiosis across our world. The Gutenberg Bible broke the constraints of the intellectual slavery the early church imposed on members who could have no access, redefining the nature of the message and its impact by creating an accessible medium. The medium and message play critical roles in world-changing history. In 490 BC, during the first Greco-Persian Wars, a runner (the medium) ran from Marathon to Athens to warn the fellow Greeks that they had won the battle and to resist the Persian fleet (we might be speaking Farsi today if he had failed). In 1862 a package containing Gen Robert E. Lee’s orders to his generals was discovered in a field by a Union soldier, something that would have likely reshaped the direction of the war (with perhaps two governments incapable of managing their spending).
Today, the conquest of electronic medium over physical medium is far-reaching. Borders Bookstores are gone, Kodak is facing bankruptcy, Netflix angers the world over media strategies, Blockbuster was rescued by a streaming company, the US Postal Service will likely change or die from diminishing relevance. How the world communicates, entertains, manages, and fights wars is on the shoulders of digital media. Cyber-attacks are often scarier than hostile takeovers. Business today is often at the speed of light, fraught with wonderful benefits and horrible risks and calamities.
Medium is really not the message. Medium, true to its Latin origins, is what is in the middle; it’s what is between us and the message. Electrons are really good at that role. More today than ever, disintermediation, getting rid of what’s in the middle (the medium) is transforming our world. The Arab Spring flowing over the Twitter Falls, our instant access to Google and streaming, email and video conferencing have made connectivity a commodity and global access common.
That is, for our customers. Their expectations have transformed and are demanding the convenience of disintermediation. What others and competitors do cannot now be obscured by the strength of our relationships alone. We are flying toward increasing transparency across all sectors and that begs a hard rethink of our business processes and models. Today, the medium is becoming ubiquitous and globally accessible, making the message the differentiator for the accessible ones.
Do our processes match the message? Are we agile throughout and within our systems? Do we use the good old fashion way of getting it done with meetings, reports, approval signatures, and internal snail mail? Is our business within in-sync with the requirements of the customer without, or have we gotten to the without customer part?
The 9.0 earthquake that devastated northern Japan continues to have severe aftershocks. They are shocks in what clever physicist would ascribe to a type of space-time. It’s not about Star Trek stuff, or the time travel that fantasies love to use, but rather how one type of event starts a whole series of other events along a different type of path, affecting a different space at a different time, but connected. These types of other events are very real “butterfly effects” where a small change in one place can cause a whole bunch of changes downstream. Believe it or not, that earthquake has changed our lives, our businesses, and our collective futures. Toyota, the world’s largest automaker is expecting a 35% drop in profits, primarily from supply chain disruptions. Maybe that’s a no brainer, but it’s also driving severe supply chain effects globally and very real adverse economic and employment pain here in the US. From automakers and their suppliers, to many of the stuff we buy including our beloved electro-gadgetry … it’s still hurting.
How many of our business plans had “the earthquake” included as a scenario? Not very likely … Our nuclear industry was in the early days of a beautiful renaissance, one with a promise that would be a large driver of untethering us from our OPEC masters … but it too has been severely damaged by an aftershock … but one with no Richter scale. Disruptive events aren’t what they used to be. Historically, disruptive events were contained to the extent of our technological and logistical isolation …. We weren’t all networked. Globalization has changed that … we’re one big interdependent and interconnected family. The apparent and marketed successes of globalized supply chains and very sensitive “just in time” systems had a big Black Swan lurking … behind our chosen lines of sight.
Today, complexity has become a global behemoth, creating new rules of business and generating many more choices and opportunities for innovation and value creation. I certainly love my Android phone more than the beeper I had 30 years ago. For businesses, that complexity requires a severe filtering of what is included in planning and consequently what we chose to be blind to. Planning in business love the optimists and sometimes ostracize the pessimists … the ones who ask the unnerving questions.
Given Japan’s location, how likely are earthquakes? I heard an unfortunate comment from a nuclear industry spokesperson … unfortunate because it is an industry I love and believe in … that “the damage at the Fukishima plant was not from earthquake damage … but rather from the tsunami, it performed as designed.” Aren’t earthquakes and tsunamis connected?
Today’s world is much less dominated by trends and easy predictions … how many surprises have we had to respond to in our enterprises? My bet is that we’ve had more of them more frequently … in some multiple of our increasing interconnected interdependency. Take a look back and count them … what would we have done if we had known or prepared ahead of time? As we look ahead and build our planning and business models for the coming year … are we asking the right questions? How many levels of “what if” along our interconnectivity are we exploring? Have the aftershocks created more timidity in decision making? How much time do we invest in complexity driven failure modes versus “win” and “capture” plans. Do our business continuity plans address the really scary stuff?
There is opportunity in every storm, after all, “Luck is when preparation meets opportunity.” Seneca, Roman philosopher, mid first century AD.
What’s in a name? How about the three R’s: recognition, reputation, and revenues? What’s the value of a brand? BRANDZ has just published their evaluations and valuations of global brands. It’s a measure of just how valuable the commercial brand is and supporting insight into the whys and wherefores. The shifts and changes in their rankings are a barometer of how our choices of who delivers value are manifested in our buying behavior. It’s not an opinion poll, but rather an evaluation that incorporates business results with analysis inclusive of some subjectivity. It’s free and easily downloaded. The big global headline is that Apple, with an 84% jump in score, has surpassed Google as the most valuable brand in the world. Technology, specifically technology that enables our multi-polarity and interconnectivity to flourish, rules the top of the list … the standard bearers of an increasingly untethered and disintermediated consumer and commercial world. That means that value propositions increasingly incorporate wireless connectivity without a middle man. Googling it, Tweeting, linking up on Facebook or LinkedIn, catching it on YouTube are fully integrated into our lexicon. Recently, repressive government regimes in the Middle East have learned just how powerful these untethered forces are.
There is surrealism to this, particularly for us Baby Boomers. Brands exist in a very Darwinian environment, with success belonging to the fittest. What being fit means has changed lots over the years. The shift years ago from industrial dominance was led by the services economy. In fact, one of the top 5 this year, IBM, now a consulting and technology services giant, was once a hardware maker selling typewriters and lots of computers, behemoths and little ones. The current kings of the hill are all technology firms, with the exception of McDonalds and some might argue that their value proposition and the stuff they sell are untethered, disintermediated, and high tech as well. To nail down the point, Amazon is now a more valuable retail brand than Wal-Mart.
Early losers in this sea change included stock brokers replaced by powerful web engines that enabled more effective, efficient transactional capabilities. Those that transitioned to become trusted advisors are still with us, but very few order takers remain. Be they Borders or Blockbuster, wireless and untethered trumped brick and mortar between customer and supplier.
Delivery of value has increasingly demanded convenience as the driver.
- How often do we measure our performance in delivering convenience?
- Are we ubiquitous in accessibility?
- How many hand-offs exist in between us and the customers’ actual securing the benefits they seek?
- How well are our electrons delivering value? Do we paper or pdf, snail mail or email, travel or teleconference, drive to the mall jungle or click to Amazon, carry cash or card it, keep knowledge in persons or in our systems and processes ……?
- How are our customers deciding where to shop and how will they decide with whom to buy?
- How quickly do we adapt and respond to changing requirements?
- Are our improvement efforts focused on where our customers are going or on getting better at where we are at today?
For many years we’ve been helping our clients sort out how to create and sustain value for their customers. Few would argue that the Voice of the Customer is essential. We all too often find that the Voice of the Customer collected and reported is more about the organization, how well they are liked, or opinions on performance (not real performance), rather than those that focus on the customer’s world. Hearing and understanding the actual Voice of the Customer has too often been interpreted from gathering data that feed survey instruments, reports, dashboards or scorecards. By searching for and producing data that can be rolled up, opportunities for critical insight are lost. Feeding the tool or report can become the goal and by the time the report comes, the customer might be gone. Are we missing something? “Happy families are all alike; every unhappy family is unhappy in its own way.” Leo Tolstoy, Anna Karenina. Count Leo has a point.
Let’s consider firms in the business of making money. The public sector has lots of added complexity in sorting out voices and timeframes. The Voice of the Customer is or should be The Voice of Revenues. Understand why we make money and who has it. What we’ve found often are a great deal of questions that deal with how we make money, and opinions on how well we do the basics, not why. Consequently, we spend lots of money on questions we should be answering with our performance capability data. Customer satisfaction scores are not performance capability data.
Here are some questions to consider:
• How do we know whether we are capturing what we need to know from our customers?
• What do we do with this customer survey data? How and when is it useful?
• We are measuring service and product satisfaction, and yet why are complaints rising and customers leaving?
• There are so many “voices” to deal with, how do I cope?
• How much change are our customers facing?
• How does our service impact their ability to succeed?
•How is time spent in our organization:
1. In a stable repetitive work stream (The process world)?
2. Building and implementing new solutions (The less stable project world)?
3. Responding or reacting to changing requirements (The unstable world)?
• How and when do we find out about customer facing issues?
• Is that good or bad?
• How dependent are we on suppliers?
• How much do our suppliers impact our customers?
• Does our current Voice of the Customer process and information keep up with the “drumbeat” of the marketplace?
Last fall I experienced a nuclear stress test. It had nothing to do with power plants or the stress that the operators in Japan are undergoing. Mine was conducted by my cardiologist and the isotope was a means to gain transparency into my system under different conditions, conditions that evaluated my behavior in a dynamic environment. Happily, it rendered good news that rewarded the hundreds of miles and several of my treasured New Balance athletic shoes.
Over that last couple of years, we’ve highlighted the evidence and perspectives that our business world is increasingly more dynamic, interdependent, highly networked, dangerously complex, and managed by tools and traditions built on much more stable process experience. Business models and algorithms, control systems, enterprise tools and performance improvement technologies derived significant power from the likelihood that behavior repeat sufficiently to enable the power of statistics to improve decision making. I many cases, that stability and value remains and I expect that that will go on beyond any horizon I can conjure. In fact, Dr. Deming encouraged us to look at the world through the lens of Plan, Do, Check, and Act, and his truism remains eternal.
• When and how do we subject our enterprises to that PDCA?
• What is the nature of our Check activities?
• Do we get beyond “according to plan or budget”?
• What type of stress tests are we employing? How would our business continuity plans hold up?
• Are we evaluating what we operate against the assumptions we made when we developed our plans, processes, and systems?
• Are the experiences of the last three years is sufficient to justify a fresh look at our Check phase?
• What causes and effects do we think about today that were insignificant a few years back?
• Have we learned anything new about assumptions, risks, and opportunities? Do our enterprise systems, business processes, strategies and objectives reflect that learning?
• Who is asking the discomforting questions within our enterprises? What questions do our trusted advisors ask of us? What answers do they provide to our questions?
• Are yesterday’s data building today’s processes to deal with tomorrow’s problems? What change do we anticipate?
• How well do we currently change our capability in the face of adversity or new requirements? How far upstream do we analyze?
• Where do we sit on the fragility to agility scale?
• Do our metrics come from an odometer or a telescope?
“Events will take their course, it is no good of being angry at them; he is happiest who wisely turns them to the best account.” Bellerophon by Euripides 480-406 BC
Best in Class! How often do we run into the term? I believe it’s a term that has lost much meaning. I suspect that overuse, or selective playing around with what “class” we pick, or the unreliability of rating organizations render it useless too often. In the world or process improvement it is applied to a goal setting step for evaluating how large a gap there is to close and subsequently chartering projects and resources to close that gap. There are some pitfalls to the approach:
• If the “class” we are selecting as a benchmark is a poorly performing one, we may be aiming at becoming the “best of the worst” or “the cream of the crap”.
• If becoming best in class for a unit within an organization does nothing to positively impact the performance of the total organization, we may be investing in meaningless improvement.
• The goal may become obsessive, a powerful distraction, directing attention and resources away from value adding opportunities.
• The customer, shareholder, or taxpayer does not benefit.
The last bullet is very important. Most organizations are not created with a primary purpose to have functions, departments, employees, IT systems, training centers, enterprise applications, procurement groups, or resources of any kind. That’s not why enterprises exist.
• If they are commercial organizations, they exist to deliver goods and services that financially profit so that they can earn the trust of their investors through returns. Yep, they are around to make money. The best ones do it legally, ethically, with respect to all stakeholders, no adverse externalities, and with a vision to create new value. They deliver value to customers and returns to investors.
• If they are a public service organization, they exist to fulfill a mission to deliver beneficial outcomes to their stakeholders (taxpayers and public at large). The best ones are effective, efficient, ethical, agile, focused on delivering benefits and positive societal outcomes, responsive to their public, and transparent. They spend public funds and deliver positive and beneficial outcomes.
• Purpose is fulfilled when value is delivered. There is a value stream that threads what delivers value and it provides the ruler with which to measure what is appropriate or lacking.
So, resources, systems, functions, departments, assets …, within the organization should exist and operate in order for the organization to thrive. That means that goals for units or entities within the organization have real value and legitimacy to the extent that they can verifiably contribute to the organization’s value proposition. Of course, this is unlikely since significant waste abounds and gaps in performance are forever with us.
The issue is not whether to improve or not. The question is how much, by whom, and to what ends. Where should we set the bar? How good is the good we should be? In a relay race, how would we decide where to focus our efforts? How do we create the appropriate focus, discipline and follow-through? Of course, most groups aspire to be the best at what they do, but unfortunately, it is overly focused on only what they do. It would be tragic, if not ridiculous, to claim success within a unit where the organization or enterprise is tanking. Our operation was successful, but the patient died.
2010 was a year where much of our attention and anxiety were held captive by the oil spill in the Gulf of Mexico. It was a sobering reminder of our dependence on fuels that support our lifestyle, commerce, defense, and essentials to life today. Moratoriums on deep water drilling ensued followed by hearings and probes into why it happened and who we need to blame and subsequently seek a means of exacting some comforting justice. It’s been months since the topic has had front page coverage, almost forgotten much like the devastation and impacts of Katrina, the earthquakes in Haiti, China, and Chile.
Currently, the horrors precipitated by the earthquake and tsunami in Japan coupled with the political sea changes in the Middle East fill our front pages. In each of these cases, the parallel story on their impacts on our energy supply shares the spotlight. Events and actions that precipitate unpredictable instability are universally disturbing. We are not a species well wired for the unpredictable, much less so for the unthinkable. Our education is much about real or conjured patterns that explain the world and how it came to be as it is currently. The damage in Japan to the nuclear facilities is frightening and the consequences still very uncertain. They are not the result of irresponsible entities, commercial or governmental, but rather of our shared capacity to evaluate the unthinkable. Consequently, hordes of post mortem experts and pundits are ready to quickly make on the fly strategies about our energy future. The nuclear industry is at risk, sadly with a broad brush, and the media is all too happy to stoke the fires of panic.
I believe the fundamental issue remains unchanged. It is not about energy, or earthquakes, tsunamis, or accidents, or financial meltdowns. It is about our inadequate capacity to evaluate the unthinkable. Poor decisions are likely to follow, those borne in the heat of fear and politics. Some will want all the answers to questions that respond to the thinkable and consume valuable time and minds needed for the exploring of the unthinkable.
It’s time to reread “The Black Swan” by Nassim Nicholas Taleb (http://www.amazon.com/Black-Swan-Impact-Highly-Improbable/dp/1400063515).
While these frightening events are globe rattling and cascade to us all, similar issues may well be alive within our organizations, enterprises, and businesses.
• What is the process through which we evaluate important decisions?
• Do our plans follow well established patterns of business rules that we believe to be stable and reliable?
• Who addresses the unthinkable?
• How many high impact surprises have we observed in the last three years?
It’s something to think about. Thoughts?
Many great cities developed for one important reason. They were at crossroads, or at bays, river crossings, or safe harbors. Some were near resources to be harvested or emerging roads, tracks, or caravan routes. They grew because they were or would become markets. Market towns enabled trade, commerce, and exchanges that enabled value creation. Agriculture, mining, cattle, diamonds, forestry … all types of enterprises emerged, so that exchanges could be made, with money or barter as instruments. We could get and sell stuff. For most of human history, markets were visible, tangible, and somewhere we travelled to buy or sell. This tangible requirement and the transportation linkages determined life or death to commerce and the development of cities. Ask the railroad towns that were bypassed by the interstate highway system or mining towns that had no metals or minerals left to harvest. Our conquest of time and space over centuries has shaped this dynamic.
Shopping and commerce “has come a long way, baby!” The yearly post-Thanksgiving shopping frenzy continues to amaze, particularly with how the connected world has changed our business landscape. It’s like watching an unfolding chapter in the Star Wars epic, except that the war is over our spending wallets. In this recent episode of the on-going war, the Cyber Alliance has again bested the Mall Empire for our loyalties. In fact, for some time now, the Mall Empire has painfully learned from these battles, and some have defected to or are replicating many of the Cyber Alliance strategies and tactics. This Cyber Alliance had its beginnings several years ago, deep in Amazon web jungles or perhaps a scenic eBay. If this keeps up, there is a good chance that the Mall Empire may have to close more of their forts or garrisons. If the battlefield is “our wallets”, who gets to it faster?
Business by brick and mortar is diminishing, some to extinction, by economics, wasted resources, overheads, and more often a more ubiquitous predator, the online competitor and operator. In fact, many brick and mortar enterprises today succeed only because they have built an online presence. Many slept in on Black Friday morning while others were out at midnight and stayed out until midday or later. The Friday shopper fought bottlenecks, endured queues, and mass insanity for deals. I logged on, chose, paid, and checked out, all sitting with a great cup of coffee.
From a business perspective, the online world is yet to find boundaries. It, like our universe, continues to grow and we continue to discover more about it. Visionaries are in the wonderful position where new business models are there for the making. The risks and rewards are so different, that in many disciplines agile will trump big and flexible will trump fixed. From the customer’s perspective, it is a whole new journey, walking through boundless virtual shopping malls and the new excitement that more choices and transactional convenience brings.
It has always been about convenience and cost, for buyers and sellers alike. How soon can my customers secure the benefits they seek and at what cost? The virtual world provides dual benefits of customer convenience and a more level playing field for the seller and suppliers. Historically, large brick and mortar meant more items, sizes, and choices for the customer. It defined convenience geographically and in floor space design. Goal one was to get the customer in the door and goal two was to keep them inside shopping, not much different than a casino in Las Vegas. Not so anymore.
The Black Friday and Cyber Monday battles are not just about holiday gifting, are they? How about our own enterprises? Are we there on Friday or Monday, 24-7? Whose convenience does our business model favor?
How often do we say “OK, I get the picture” when someone is explaining or trying to make a point? There is a lot in that phrase. I believe that often a thousand words can be worthless, yet a picture can be priceless. The picture can be priceless because we are wired to understand patterns and for some communications we can see and understand more from a picture than we can from what we read or hear. Imagine having to get from here to somewhere we’ve never been to and having the choice of listening to directions that may involve twenty or thirty turns and changes, versus written directions, or a map. Say that map also had pictures of what to expect along the way. I’d pick the map.
Visual signals work across all kinds of disciplines and environments. Courses to improve our memory utilize mental pictures as the medium for us to retain important information. TV news has increasing viewership while printed news is disappearing as a media. Visual signals can also transform workplaces and have led to remarkable improvements in performance and communications. A picture is an integrated medium, while written or spoken are linear mediums. With the written and spoken word, we often have to hear the end of the message to fully understand the beginning of the message. That process has a long track record of failing, dependent on writer, medium, environment, and reader to all work precisely well. A picture has a lot more going for it in getting a message across.
Something very exciting is happening. Something that is very likely going to save and extend lives, lower personal and societal costs, and will surely stir up some noise. An urgent message that has lived in a very unremarkable background, written in dull language and situated on the sidelines is about to become graphic and taking center stage, in our face, and unavoidable. This message will be impossible to ignore and its intent and meaning will be unambiguous.
The Food and Drug Administration has taken decisive action to help us get the picture. As part of their program to eliminate some risks to life and health and warn current and potential smokers of the risks they face, they are moving to require very graphic images on cigarette packs, ugly pictures. These images will cover over 50% of the packages and will display the horrific side of death and disease from smoking. The proposed messaging is eye popping and disturbing, unavoidable and engaging. From lung cancer to death, the pictures will be provocative and hopefully evocative, driving an important message home. It will not interfere with free choice, but may well improve the quality of informed choices. They will be tough reminders to current smokers and severe warnings to potential ones.
An interesting tidbit is that years ago, a major cigarette brand displayed a virile cowboy as the image to attract customers. The actor in the photos died emaciated from the ravages of lung cancer. This program may well produce the picture that is worth a thousand lives.
How powerful would a similar strategy be in our workplaces when attacking unsafe behavior, waste, or poor quality?
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