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Digital transformation and technology integration are all the rage. Academics and practitioners alike espouse the inherent need to tackle these challenges sooner in order to assure there is a later. One thing that is missing from the cacophony of voices thrusting digital transformation upon the business public: What is the point? What is the ultimate goal of digital transformation? Is it a more efficient organization? Is it doing more with less? Not exactly. These are admirable ideas but they were the object of the first business technology revolution. Our Kaizen (continuous improvement) mindset should always keep us looking for opportunities to be more efficient.  However, the ultimate goal of digital transformation, the El Dorado for which we all constantly strive, is a Frictionless Enterprise.

Efficiency and resource utilization have been, and continue to be business objectives. These goals were the desired outcome of the technological revolution that resulted in Enterprise 1.0.  An Enterprise 1.0 company is a technology-enabled organization that maintains many of the silos, outdated procedures, and inflexibility that have been prevalent in business since the early 1900s. In Enterprise 1.0 companies, technology is IT driven, generally as siloed as the rest of the organization, and built to supplement existing policies and procedures that were first defined at a time before digitization significantly lowered the transaction cost of doing business. While this technology did help to create some efficiencies and increase utilization rates, it is often cumbersome, not easy to use, and fails to adapt to changes in business realities.

Enter Enterprise 2.0.

Enterprise 2.0 is by no means a new idea. A result of the Web 2.0 concept (which was coined in 1999), Enterprise 2.0 stresses collaboration, flexibility, and user-driven technology integration. The ultimate goal of this being the absence of friction within the organization. Users have become accustomed to the seamless integration of technology in their personal lives and now want their work to reflect what they know is possible. They want to be able to collaborate effortlessly, find information immediately, and have their tools designed intuitively.  While hierarchy, bureaucracy, and compartmentalized information sharing were implemented to make organizations more efficient, the opposite is true. These outmoded concepts create friction on the path to achieving our strategic business objectives. The startups which have eschewed these previously sacrosanct principles have begun to dominate every field in which they endeavor to compete.

Enterprise 2.0 and the Frictionless Enterprise are here to stay. They represent a revolutionary way to do business that is already old-hat in our personal lives. As business leaders, we must embrace the new reality that what we “knew” all along may not be true. It is time to let go of the past best practices and embrace the removal of intracompany barriers, an increase in transparency, and dedicate ourselves not to following an MBA playbook but rather focus on how to best deliver value our customers. This is the only way to achieve a truly Frictionless Enterprise.

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May 2018

I just finished reading “Let My People Go Surfing” by Yvon Chouinard (founder of Patagonia). This passage from the book reminded me of an article I had written a few years ago.

Patagonia founder and “reluctant businessman” Yvon Chouinard

 

Some people think we’re a successful company because we’re willing to take risks, but I’d say that’s only partly true. What they don’t realize is that we do our homework… Although we encourage everyone at Patagonia to be “gonzo,” to stick his or her neck out, we don’t want to become martyrs…You can minimize risk by doing your research and, most of all, by testing.

 

 

October 2017

I recently had the opportunity to interact with a startup founder who is contemplating taking on a huge new client. I (unsurprisingly) offered my unsolicited advice that they think long and hard about taking a giant leap. My contention was that the tech space boneyard is littered with companies that have bitten off more than they could chew. Taking on a client that big will give the client an outsized influence on the company. The stress on the operations may lead to poor service quality and effect referrals. It is moving outside of their niche and may do irreparable harm to the culture even if it does work from a profitability standpoint etc. She responded that the growth opportunity was too good to pass up and that taking risks is what being an entrepreneur is all about. “So, what if we fail? We learned something, and we’ll move on.”

There are many things in her response that I will tackle in upcoming articles but, for this one, I’m going to focus on “fail fast.”

I am a HUGE proponent of the fail fast mentality. Try something new. If it doesn’t work, cut your losses and move on. “Fail fast,” however, it is not an excuse to just try anything. If I said, “I’m going to try to jump off the Sears Tower and walk away,” everyone would tell me I am crazy. Common sense, the number of people who have died falling from lower heights, and the laws of physics all say that is not a good idea. The same goes for business. If a business is going to try something that has been attempted unsuccessfully many times before, there better be a GOOD, well researched, strategy in place to show why they think this will be different. Taking a parachute to the Sears Tower is a good, well researched, strategy. Hoping that holding an NPR tote bag over my head will produce enough drag to stop me from breaking every bone in my body is a pipe dream.

A leader has an obligation to their team to do the homework first. My Sears Tower example may seem a bit overboard but you have to remember you have the livelihood of your team in your hands. You owe it to them to perform your due diligence. Due diligence is what I mean by you don’t have to actually fail to “fail fast.” Doing the research on what other companies have done, taking an inventory of your capabilities, or running a simulation of the change are just a few ways to “fail fast” without failing. According to this Inc. Magazine article, most CEOs read a book a week! Even if that number is inflated, the most successful are voracious readers based on the number of books they recommend. Why do they read so much? To learn lessons from others so they don’t have to try it themselves. You don’t need to risk of jumping off the Sears Tower. Read Newton’s Principia Mathematicato determine it won’t work instead.

Thinking that a company will succeed where every other company has failed based solely on the rationale that “I’m better/smarter/different” isn’t daring, entrepreneurial, or inventive. It is stupid, shortsighted, and arrogant. Fail fast when introducing a new product into the market (after completing the market analysis of course). Fail fast when the frontier is new, there are no comparable experiences, and evidence exists that makes the idea seem feasible. Fail fast after doing the research and it looks like a good idea. Don’t fail fast on things others have already tried. Don’t learn lessons that others have already learned. You can “fail fast” without failing.

The Inspirant Insight’s Throwback series is content written by our team before they were part of Inspirant Group with additional Insights added in the form of video commentary. This article was originally published at lenmusielak.com on October 10, 2017 as “You Don’t Actually Have to Fail to Fail Fast.”

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Agile purists have long preached that truly agile development can only occur with collocated teams. Meanwhile, novel coronavirus 2019 (COVID-19), has more and more people working from home every day. Does that mean we have to abandon ship and go back to waterfall? Should we burn our Scrum Alliance and SAFe certifications and race to the nearest PMP certification authority? Of course not. The truth is, while oftentimes preferred, colocation has never been truly required for highly functioning Agile teams thrive. Let’s start by looking at the Manifesto for Agile Software Development, the foundation on which all Agile frameworks are built.

  • Individuals and interactions over processes and tools.
  • Working software over comprehensive documentation.
  • Customer collaboration over contract negotiation.
  • Responding to change over following a plan.
  • That is, while there is value in the items on the right, we value the items on the left more.

Nothing in that statement says that the teams must be located in the same place. The assumption is that interactions and collaboration are easier when team members are in the same room. That assumption, however, does not infer that interaction and collaboration are not possible for teams working remotely.

The fact is that organizations like Zapier were founded to be entirely remote and agile has worked just great for them. I personally have set up Agile Kanban teams that included developers and test engineers who were located on-site, local remote, in Colorado, and in India. The key to success is sticking to the four tenants of the Manifesto for Agile Software Development and finding ways for your geographically distributed team to follow them. The path to this goal is as unique as each agile team. However, based on our experience and that of other experts, here are best practices in team building, communication, and collaboration to get you started.

Note: Many of Agile experts recommend requiring new teams to collocate during the “storming, forming, and norming” phases of team development. We understand and agree with the rationale for this. However, we have approached these best practices from a position where face-to-face, in-person, meeting and working are ill-advised or impossible.

Team Building

Software development is often thought of as a technical endeavor embarked upon as a solo journey by introverts who love the beauty of code. In reality, software development is a creative effort taken on by teams and reliant on huge amounts of trust between individuals. It is crucially important for Agile teams to act as teams. We have gone into creating a culture in a remote workforce in more detail in a previous article. Here we will focus on specific ways Agile teams can build the necessary comradery to be effective.

Individuals and Interactions are important parts of being Agile. For a collocated team, many of these interactions come accidentally and informally just from being in the same room. This is more difficult for remote teams, but it is just as crucial. As a leader, you can lead by example by sharing and asking about non-work subjects. Something as simple as starting the Monday stand-up with something along the lines of “Before you give your update, tell us the best thing that happened to you this weekend” goes a long way toward building rapport amongst the team members–rapport which is key to build trust, increase self-organization, and encourage ex parte communication.

Along those lines, the Agile ceremonies remain as, if not more, important with a remote team. Daily standups should continue to occur with everyone on video conference and actually standing up. Depending on your particular framework flavor (i.e. XP, Scrum, SAFe, etc.) there are other important meetings and milestones which normally occur in-person. All of these events should continue with a remote workforce. We have some links at the bottom of this article for tips on running the different ceremonies effectively while remote.

Communication

The inability to easily engage in ad hoc communication is a downside for any remote team. It is especially detrimental to the software developer who, in the absence of being able to simply speak up and ask a question aloud, now has to task switch, open up the chat application, ask the question, and wait for a response. However, this annoyance is more a matter of getting used to the new paradigm than an immense obstacle to overcome. Issues are more likely to occur in cases where a subject matter expert (“C”) would overhear a conversation between “A” and “B” in a collocated space and could provide vital details. In a virtual team environment, if that conversation is occurring between “A” and “B” in a one-to-one chat, “C” will never have the opportunity to fill in the missing facts. For this reason, team chat spaces should be encouraged whenever possible. If a conversation clearly becomes between “A” and “B,” they can take it to another room, but getting the initial discussion out to a large audience should be the first step. Any decision or question about function or architecture should be communicated to the entire team. It is better to over-communicate with your team than under-deliver (or completely miss) the product owner’s expectations.

What you communicate with a remote team will also differ from what is communicated with a collocated team. The Manifesto for Agile Software Development values “working software over comprehensive documentation.” With a remote team, you will find yourself documenting more. Asking clarifying questions, whiteboarding concepts, and interpreting the nuances of a user story is just more difficult for teams that aren’t in the same room. For a remote team, even non-functional requirements need to be discussed and documented at the outset. Test and acceptance criteria added to user stories is a good way to provide more insight into the expected outcome.

We have more on general communication best practices in our articles on working remotely from an employee perspective (“Working From Home: Not as Easy as It Sounds”) and on “Maintaining Your Company Culture with a Remote Workforce.”

Tools

Quality, easy to use, collaboration tools take on a new level of importance for virtual development teams. For all other virtual teams, collaboration tools make work easier. For virtual development teams, they make work possible.

It all starts with your project management software. JiraTrello, and Basecamp are just some of the options available to track and manage what is, has, and needs to be done by whom and by when. These software options are specifically designed for development teams. So, little customization or compromise is needed prior to use. And, they offer options like virtual Kanban boards to move your user stories from sticky notes on the conference room whiteboard to the digital meeting space.

Project management is the start, but it is in no way the end. For software development teams, a source code repository with a distributed version control system is the real engine for efficiency. GithubBitbucket, and GitLab but a few of the options in this space. The use of these systems helps to create a culture of continuous integration. They also allow for work to be split between groups or teams (i.e. frontend/backend, database and services/frontend, etc.) but still kept in a common repository.

The “Best” best practice for Agile software development is to collocate your team. However, sometimes the best practice for Agile software development is at odds for what is best for your team. Following these high-level best practices will allow you to get your virtual agile software development team off on the right foot. As always, you should customize the strategies you use to build your team, the ways you communicate, and the tools you use to manage your work to best allow your team to develop software according to the principles of agile.

For more information on maintaining productivity, engagement, and morale with a remote workforce, visit inspirantgrp.com/covid19 or email hello@inspirantgrp.com

 

Other Resources

How to Run an Agile Retrospective for Remote Teams

Ultimate Guide to Remote Standups

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Inspirant Insights: Getting Your Transformation Started with Inspirant CEO Amir Azarbad

Getting started on a project is often the hardest part. When that project is as substantial as enterprise digital transformation, the first step can feel crushing. I sat down with my Inspirant co-founder & CEO Amir Azarbad to ask for his advice on getting transformations off the ground. Here is the video of our interview. A transcript of our conversation is included below.

Meighan Newhouse: Hi, welcome to the first in a series that I think we’re going to call  Ask an Unconsultant. My name is Meg Newhouse and I’m here with Amir Azarbad, my friend, co-founder and co-partner at Inspirant Group. And today I’m going to ask him some questions about how to prepare for transformation in 2020.

I thought as we get started in the new year, it might be fun to think about, to reflect on 2019 and to help our clients and others think about what they should plan for in 2020. I know you’ve always talked about the idea of the journey. Maybe you can explain a little bit about what the journey means for folks going through a transformation.

Where do people you know, when they are thinking about where to start–they have all these projects they want to get started on 2020–how do they even wrap their arms around these a hundred projects? How do they get started?

Amir Azarbad: Let’s focus on the transformation journey itself. At most companies, the way these conversations usually go is the CEO comes into the CIO’s office and says, “This technology sucks. We need something new. Let’s go.” And the CIO typically goes to his or her team and starts asking questions like, we need to fix this. What’s the best solution out there? Who do we know in the market? And what that always ends up doing is bringing in the same set of people, the same set of technologies, the same set of conversations that have happened historically. And everyone jumps to, “Let’s invest in a new technology platform. Let’s put a product off the shelf and off we go.” The short answer and simple answer to your question is, “Start with the end in mind.” Don’t jump to the technology. Like we said, don’t jump to the people and the process don’t look at your data.

Ultimately, the question is not what technology ails you or what your people lack in skill sets or what processes you don’t understand, but, “Where do you want to be three years down the road?” And if you start to really map out what three years down the road looks like and five years, and then short term one year and figure out how you measure success, that really starts you in kind of taking that first journey transformation step, if you will, which is ultimately prioritizing the work you want to do versus the shiniest object or the lowest hanging fruit that might not always yield you the best results.

Then you start to do is start to take a look at your majority of processes. And that’s where you should start as your kind of your first step is you have your strategy, you know where you want to go, what the outcome is, and now you take a look at, “What are all the internal business processes across your value chain that will get you to where you want to go?”

And that’s where the real trick with transformation starts. The thing that we’ve seen in the market and the kind of the gotcha–if you will–is that most folks just take existing processes and figure out, “Hey, there’s new technology. We can just start to put it on a solution.” That doesn’t work because you don’t know the process of what you’re trying to transform and you’re not even looking at it.  And more importantly–it’s something I know you’re passionate about–is the people side. You haven’t even thought about the impact to your people, both internally, externally. How would that whole organization function in this new world?” Buying a product off the shelf usually is a hard thing to do because what it ends up doing is–you’re trying to take what is proprietary to you and try and plug it into a box and then customize it.

And anytime you start to get in that world, you’re adding a whole different set of costs and et cetera. Why not have your own blank canvas and take your process and build it on there? Most of your processes are probably fixable without any new solutions. It’s just a matter of looking at what people do on a day to day basis.  And most organizations don’t spend the time or put in the effort to do that because most organizations and most executives are hand juggling 50 different things at the same time, and it’s really hard to try to convince them to take a step back and really have an in-depth discussion and an observation of a process and try to really think through it.

But once you start to look into your process, once you start to optimize your process, you now have a really good use case for a technology discussion, a people discussion, and a data discussion. But, until you really have a process sort of mapped out, optimized for what you want and how you want to measure based on the strategy, you really shouldn’t jump into that next layer of, “Is my workforce ready for this? Or do we have the right data? And ultimately, what is the technology solution that we’re going to use?”

MN: Well, so I want to go back. I want to think about, you know, I think it’s easy for us as consultants or Unconsultants at, you know, a 20,000-foot level to say, these are the things that you need to do, you know, executive person or manager person, you know. But I think about being in that role, which I know we’ve been in. All of these things coming at you. You said it yourself juggling 50 different things.” I just want to implement the easy solution.” Maybe it’s, “My technology is at end of life and I just need to go to the next version.” Or, “This thing does seven of the 14 things that I want it to do. So that’s good enough for now, cause I got to get it going and get it going.” So. What kind of advice do you have for people to kind of step back and, you know, do you have any experience when you were in that seat, right? Like what? What did you experience when you were trying to get those things pushed in? And the difference between doing that and stepping back and actually being thoughtful and planful about what that looks like.

AA: Yeah, I’m guilty as charged. I actually was that same business executive who was pushing everybody to get things done quickly and not willing to spend time it, and this conversation needs to be split up into sort of a large enterprise discussion organization because there it’s a whole different politics and culture and sort of environment that folks operate in versus the middle small type businesses that are looking to transform.

And so, let’s, let’s focus on the large enterprise. Large enterprises. The directives come from above. Very rarely do you get a chance to sit and look at one process or observe one thing. So, what I would recommend to folks as they start a new journey, it’s to really try to push and pilot and show and demonstrate value in the new way of doing things. Potentially change a process, train a new staff member. Get a new skill set. For some of you folks, it’s show value in a small sort of organic way and let that organically grow, if you will.

MN: I learned that early on. I’ve, I’ve been known to want to boil the ocean or to, you know, big dreams, right? But I’ve had lots of coaching and mentoring in my career to say start small, start with a small pilot and show the success and kind of build that energy at a smaller level and kind of a grassroots, which can be hard to do, I think, in larger organizations, but you can even do that in a large organization. That’s what you’re saying, right? Which you did in a large organization.

AA: At the end of the day, what you’re trying to show is that you have the capability to do something differently. Yeah. What has been traditionally done in the large enterprise organization. That’s really the biggest challenge with transformation in large organizations is trying to take. A new way of thinking, a new way of doing into an organization that is an 800-pound gorilla and doesn’t want to change, and everyone has a role, and everyone wants to sustain their role and go forward. So, transformation in a large organization is a very difficult endeavor for anybody to take on. Well, once you get that going, once you get the transformation started and you get people on board–we always use this analogy for folks–digital transformation in a large enterprise is pushing a boulder up a mountain. It’s, it’s really hard. And you can have as many people trying to push it up there, but that boulder is, is as heavy as it could possibly going up there. There is a tipping point where you get to the top of the mountain and everyone understands the value of transformation, how to do business differently, how do we nimble and agile. And once that Boulder falls on the other side and everyone wants it, your challenge then as an organization is trying to figure out how to slow it down. Cause just as hard as it is to get it started, it’s hard to make sure that you do the right things when you scale and you grow.

So that’s the other side of the house. Enterprises that have already started this transformation undertaking and have accomplished a significant amount of good deliverables, let’s say in 2019 and 2018 as they go into 2020 their focus needs to now shift a little bit more on the governance and the centers of excellence and making sure that the best practices are being enforced.

You need to leverage your credibility to really push everyone to understand the importance of governance, the importance of building people, the importance of just understanding what your processes are and to not have your find yourself in a place in three to five years where you’ve made so many bad decisions–technologically or process and people wise–that now you have this significant digital debt. You really don’t want to lose control of that boulder. Cause if you do in five years, you’re right back to where you were–the solutions don’t make sense, processes are understandable here, people don’t know how to support it. And you’re back to square one.

MN: It sounds like that initial roadmap, that planning, is really essential for people getting started. Right. And then for those who may already be in there if they haven’t had the opportunities sat down, had do that roadmap. Now, might be a good time to do that–think about where they are in that process and you know how to keep it going in the right direction.

AA: There’s also this, this notion that transformation requires agility and it requires a transformation in the way you approach implementation.

MN: You know, the culture will change. The cultural change, the expectations will change, and roles will change. One of the transformations we’re talking about now, the average tenure in this organization is 20 years. You know, so to go from, “Well this has always worked this way.” You know, the, “If it’s not broke, don’t fix it” to ” We’re going to do things differently and more efficient” causes a big change. And people, I get scared when there’s change.

AA: Your people are inherently going to put up roadblocks because they’re worried about their job security.  They are like “This is the way we’ve done it. Why are we changing?” And one of the biggest mistakes that enterprises make is ignoring the fact that your people need to have new skillsets, new training, new–sort of–way of doing things, and if you don’t keep them involved, through change management early on through learning opportunities, what you’re going to get is a lot of resistance every step of the way.

So that’s, that’s sort of your large enterprise organization type folks. The smaller middle size businesses, they have a whole different problem. It’s a capital conversation. We’ve seen, in a lot of these organizations, they’re willing to invest in their people. They are nimble and they can move and they enjoy the conversations of looking at processes and all that.

They don’t have old legacy systems that are completely hard to integrate with. What they’re ending up with is, “I know that we need this Excel spreadsheet automated. We know that this access database is not scalable, and we know our workforce is out there and then they need to be mobile and they need to be able to do X, Y, and Z.” Right? There’s all of these sort of usability type discussions, and needs, that are coming up in these small and midsize organizations. Delivery is not an issue. It’s just about capital investment and that make it a lot more difficult for them to transform.

For those folks. I think that the more important part is, is start small. Start, don’t boil the ocean. They’ll go in there and trying to completely overhaul it. But take one use case, take one scenario, build it, take another scenario, build it. And this way you’re spreading the investment out over multi-year sort of plan. But what you’re getting is immediate returns every six to eight weeks.

So, we start with the end in mind. Always, no matter what size organization you are. But the approach of how you get to that end. It’s different for a small midsize company than a large enterprise company.

MN: That’s what I was going to say, I mean, it sounds like the roadmap for anyone really. You just have to be planful about it, but the smaller companies, if it is the capital flow is an issue, then maybe they just choose one. They have to prioritize, which one of these do we want to accomplish first to show the value, to show the worth before we go, and maybe they can only do one or two small projects a year, but at least they’re moving the boulder in the right direction.

AA: I think that the ultimate take away from all of his conversation is that transformation is hard no matter who you are and what you’re trying to do. And every step of the way, it’s important to take a look at where you are on that journey and make sure that you are still going down the right path. Everything aligns back to your roadmap, back to where you where you sort of had that end in mind. And every decision you’re making is focused not just on the technology but on your people and process. And ultimately back to your strategy and where you see yourself in five, three, one year, whatever that roadmap looks like. Cause you can keep investing in technology, keep doing transformation type stuff, see results and everyone can be happy about it. But are you ultimately driving towards being that company that’s unique in the marketplace as a value proposition and you are ahead of your competitors in terms of, what it is that you’re delivering to your customers.

Build your own brand as an executive. Don’t fall into the traditional, “All I need to do is this to be successful at this company.” You try to figure out your own brand and differentiate yourself in that, in the company you work with, then you really end up standing out, getting credibility, and can take on and tackle on bigger challenges going forward versus the same old every year process or same, well, every year deliverable, and this is the way things go, so I need to do the X, Y, and Z.

That usually tends to get you not to be a transformative leader, but more of just sort of the same old leader following the same old steps. Digital transformation needs digital and transformative leaders, if you will.

MN: I am all about new year’s resolutions. I look at the new year as a fresh start. I love starting new. You can look ahead. What did I do last year? Reflect on what you did last year and how you can improve on that. And so I think, you know, this is a really cool conversation to reflect on what 2019 looks like, how we can be planful for 2020 I’d say for leaders who feel overwhelmed, who don’t think they have enough time to sit and plan things out, I think now’s a good time to assess what you spend your time on and see where the focus should be and to make these projects successful going forward.

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10,000 baby boomers retire every day. Replacing those loyal team members is the always moving “Millennial Shark.”

It can take two years for a new employee to become fully productive. Millennials change jobs every 2.5 years on average. That means you only have each role filled with a fully productive person 36 months every decade.  Without proactive action, the chances that your organization will ever have every role filled with a productive employee are astronomically low. The math is simple. Keeping millennial employees on your team will be the only way to survive in the post-boomer economy.

Millennial Shark is a digital native. He has never known a world without the internet; doesn’t remember pagers—let alone pay phones. Knowledge has always been available at a click. They have experienced very little waiting in their lives and aren’t going to develop the patience for it now. They don’t have time for seniority politics. When they feel like they have stalled, they move to another company. Millennial Shark, like his aquatic namesake, has to keep moving to survive, right? Not necessarily but keeping the shark in your pool is going to take some work.

Millennials will move if they feel like they have stalled, but there is a way to keep them on your team. Millennials live in a world that is constantly changing. They came of age during the great recession. They know that the next downturn can happen at any time with no warning. Staying in one role, at one position, for too long means they are not getting the knowledge and experience their peers are getting elsewhere… They aren’t getting that knowledge and experience unless you proactively give it to them.

To keep millennials on your team you have to actively develop their skills and build a culture of learning in your organization. You have to make them feel like they are moving while they are staying in the same place. A corporate university is the most effective way to do that. The best part? Establishing a corporate university program will help your organization achieve its goals while also helping your millennial employees achieve theirs. You are creating better-equipped employees with a common culture and deep knowledge of your organization and strategy while making sure they are gaining the knowledge they need to remain engaged.

Creating a corporate university is not a small endeavor but it is worthwhile.  Can you afford to have a less than 100% productive company?

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Efficiency is probably the most used word in any conversation about business processes and procedures.  Everyone wants increased efficiency defined by decreased costs, decreased cycle times, and/or decreased overall waste.  Efficiency, however, is only part of the equation when determining the effectiveness of a process.  In fact, I submit, efficiency is the least important part of this equation.  The ultimate determination of the effectiveness of process improvement is how that improvement affects the competitive position of the firm.

Organizations are organisms.  No single process, department, or division exists in a vacuum.  As such, every decision from process improvements to vendor selections must be not only weighed against efficiency benchmarks but also analyzed within the context of an overall business strategy.  Take these examples:

  • A service company can make an invoicing procedure super-efficient by only producing one format, sending invoices via email only, and ignoring client requests and complaints.  This would drastically reduce preparation time, development costs, and process errors.  Yet, if the firm’s competitive strategy is to differentiate itself from the competition by providing an exceptional customer experience, this process improvement has failed.

  • A consulting firm catering to local startups could save a few hundred dollars a month going with a big box supply vendor instead of a smaller local supplier.  Yet, if this consulting firm touts its support of local businesses as parts of its competitive positioning, a decrease in office supply costs would be a failed improvement.

  • A manufacturing firm can decrease production times by reducing redundant quality checks.  However, if this firm’s differentiation strategy is to provide the highest quality products, this process improvement has failed.

As you can see from these examples, there are situations where a process change can improve KPIs but hurt the organization.  As operations professionals, it is our responsibility to take business strategy into consideration when improving a process.  An “improvement” that saves $1,000/month but weakens business is not a real improvement.

Your billing procedures may be more labor intensive than is optimal, your factory output may be a little lower than you would like it to be, and/or your office supply costs may be a little higher than they could be.  However, if this is the cost of keeping your processes and procedures in line with the firm’s strategic vision, it is probably worth it.

Efficiency contrary to strategy is equal to waste.  Embrace strategic efficiency.

The Inspirant Insight’s Throwback series is content written by our team before they were part of Inspirant Group with additional Insights added in the form of video commentary. This article was originally published at lenmusielak.com on April 13, 2015 as Strategic Efficiency Is Key to Success.

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Digital Transformation: Surveys say most companies are doing it. Academics claim that those who don’t are destined for disruption induced failure. The one question no one seems to be able to answer is…what is it? There are many definitions of digital transformation, but all of them seem to miss the essence of what digital transformation really involves. Is it just a fancy new word for “technology integration,” “digitization,” or “digitalization”? Or, is digital transformation something bigger.  To get a handle on this concept, I believe a good starting point is to look at a real-life case.

Associated Textbook, Inc., a textbook publishing company, was about to release their first entirely digital book. You could get it on your Mac, PC, Kindle, or Nook, but it would not be available as a paper book. The digital assets were in place. The webstore copy was written and submitted. Everyone at Associated was excited about this strategic direction. Then, on launch day, nothing happened. Quite literally, nothing happened. The book wasn’t listed on the website, which meant no one could purchase it. Associated had an expensive digital asset which was supposed to disrupt an industry and no way to sell it. There was a mad dash to figure out who had dropped the ball. Fingers were pointed. Accusations were made. Everything was checked, and to Associated’s surprise, nothing had been missed. Everyone at Associated was stumped.

Every process at Associated Textbook had been digitized. Technology had been seamlessly integrated into every process. Most importantly, as far as the individual silos were concerned, those processes had been optimized. Every team that would be involved in the distribution of the digital book had been involved in the planning and done everything they needed to do to launch a digital book. Yet, despite all of that, the product launch failed.

Associated was missing was a broader view of how value had been delivered to consumers by the organization previously and how this would change with the new endeavor. Each silo had made sure that the systems they designed got the product from the beginning to the end of their process. Since this book would be entirely digital, the printing operations team wasn’t involved — yet they were the ones who had the answer to the product launch conundrum. The automated system which lists books for sale was tied to the receipt of the order by the printing team. (This check was implemented after an issue years prior when a book was listed in a physical catalog but was ultimately canceled). To ensure this never happened again, books were not listed on the website, until the print order was received. In our scenario, the webstore listing for this groundbreaking digital title was just sitting there waiting for the receipt from the printing team — something that was never going to happen. Associated had technology integration. What they needed was digital transformation.

Technology integration, digitization, or digitalization involve making manual processes automated. Digital transformation asks the questions, “Do our processes and strategy still match the way we deliver value to our customers?”and “Is our process frictionless?”  These question can’t be answered in a silo. They require an examination of everything from business strategy to delivery and, most importantly, all of the steps in between. Digital transformation takes a deep dive into what we are doing, how it is getting done, and why we started doing it that way in the first place. Only after this picture is developed can we integrate holistically developed technology to take the enterprise to the next level.

Next week, Inspirant Insights will take a deeper look Enterprise 2.0 and the Frictionless Enterprise. Stay up to date with the most recent Insights by following Inspirant Group on LinkedIn and subscribe to our weekly newsletter at inspirantgrp.com/inspirantinsights.

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It’s that time of year again. I’m not talking about how my gym suddenly triples its membership. I’m talking about the time of year that people who have been sticking around for their bonuses publish their resumes and put in their letters of resignation. They are “fully compensated” for last year, have used their vacation, and taken advantage of a few paid holidays. Job seekers know that January is the best time of the year to find a job because data shows it is the most popular month for people to leave a job. Bonuses are supposed to keep people around, but in many cases they have become a starting gun in the race to leave.

Only 30% of American workers, and 13% of global workers, are engaged in their jobs. Keeping your team engaged year round is the key to keeping your team on your team after bonuses have been distributed. If you are facing post-holiday personnel flight, it might be time to rethink your engagement strategy. Here are five tips to keep your team engaged throughout the year.

Communicate frequently and transparently with your team about what is going on throughout the organization. Give them a chance to have input and suggest ideas.

Every company goes through ups and downs. Resist the temptation to only share the good news. Your team can tell when something is wrong. It is better that they hear the details from you than speculate on the worst case scenario.

Provide context on the bigger picture of what they are working on. Understanding how their work fits into a larger project or strategy will make them feel like they are part of something bigger and builds loyalty to the project and the organization.

Listen to what they really need. Foosball tables don’t drive people. However, camaraderie might. Understanding your team’s motivators will help you to determine the best way to meet those needs rather than trying what worked for some other team. This is especially important for remote teams when you cannot directly observe motivators. A weekly touch point with all employees will help keep them engaged and help them to remember that they are a valuable part of the team.

Provide your team with the opportunity to learn more and take on additional responsibility. Most importantly, make sure they have the tools and training to do their best work.

Sweeping the floors is additional responsibility but it isn’t knowledge expanding work. Team members who feel the organization and leadership value them and are investing in their careers are happier, more innovative, productive, and creative. They will feel invigorated when they know they are growing–not just standing still. Give them every opportunity to learn and develop new professional skills.

Working with tools and training that are outdated, incomplete, or less than fully functional is frustrating and disheartening. Investing in internal initiatives may not take first priority because it is not client facing but it cannot be ignored.

Use failure and mistakes as a learning opportunity.

Not every idea will work out. This is an inevitable part of innovation. As a leader, you cannot accept low performance. You can make these failures learning experiences rather than an excuse to berate, or worse, micromanage. Mistakes happen, when they are done in good faith and admitted to, the team should understand that it is not unacceptable or fatal. Blaming and shaming shuts down the communication and stifles innovation. This will inevitably lead to feelings of stagnation and a lack of appreciation for the team’s talent.

Provide them with access to user feedback.

Providing the team with the feedback from end users of the product or service they create helps them to remember why they do what they do. This pride of ownership is a great motivator to keep teams engaged in their work and dedicated to the cause. Hearing what you think about their work is important but hearing what the users think is critical.

Keep your finger on the pulse of engagement.

Employee surveys are good ways to get a ballpark idea of how engaged your team is. However, they are infrequent, inaccurate, and often lagging indicators. Develop a dashboard of quantitative engagement metrics to assure you always have the most accurate data.

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A new year means it is new budget and new project time. Everything on the status chart is green and we resolve to keep it that way.  However, in the back of our minds, we fear this year will end like the last as a desperate race to get our deliverables completed just under the wire. How do things always seem to go off track and what can be done to prevent it? The answer to both of those questions is “culture” but let’s start with more tangible steps.

 

Planning

Keeping a project on track starts in the planning phase. Most planning stops when you find there is a “happy path” to success. This year, instead of stopping when you determine it is possible, take the extra step of really brainstorming what could go wrong. Make the unknown known by Red Teaming (have another team come in and with the explicit goal of tearing apart your plan) and by engaging “the guy on the ground” early on. The front line team has tacit knowledge that cannot be replaced by all of the preparation in the world. Adjust your plan to account for these contingencies. Prepare for what you will do when the unexpected occurs because the unexpected will occur. Finally, allow for some flexibility. When something doesn’t go according to plan, be prepared for your plan to flexibly adapt rather than rigidly crumble.

 

Execution

During the execution phase remember the plan is not the objective. One of the biggest hindrances to the successful completion of an objective is the “tyranny of the plan.” Simply put, at a certain point people forget about the long-term objective and become singularly focused on following the plan. It doesn’t matter how hard you plan, there will be variables you cannot control or foresee. Keep the objective as the focus and the plan as the current best route but, like any good GPS navigation app, be prepared to adjust your route during the journey if traffic builds ahead or a clearer path appears.

 

Culture

So what does this have to do with culture? Every person on the team needs to be comfortable pointing out what might go wrong in order to have a candid conversation about how to prevent it. Your front line team (“the guy on the ground”) is your most important asset for spotting problems early and determining how to prevent or fix them. However, for that person to be able to perform this function, a culture of trust and openness within the project team needs to exist. The point of the planning exercises is not to defend the plan. It is to accomplish the objective in the allotted amount of time. A defensive response will shut down conversation and lead to “surprises” that could have been planned for. During the execution phase, knowing “traffic is building ahead” or “a shorter route has been calculated” requires the constant tracking of key variables and most importantly the transparent communication of issues and successes both within the project team and with the wider group of stakeholders. Hiding problems also hides solutions.

 

Remember the objective is not the plan. Focus on that over projects plans, politics, and ego and you will find a way to meet that objective on time and on budget. Good luck!

This article was originally published at Inspirantgrp.com/inspirantinsights

 

Sources

The Dirty Little Secret of Project Management

https://hbr.org/2013/03/the-dirty-little-secret-of-pro

The Mission, The Men, and Me by Peter Blaber

https://www.penguinrandomhouse.com/books/301958/the-mission-the-men-and-me-by-pete-blaber/9780425236574/

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[Originally published January 2016]

As the health insurance industry completes another successful open enrollment period and the Affordable Care Act enters its third year of implementation, the healthcare business has been fundamentally reshaped. Since World War II the bedrock of the health insurance industry was actuarial calculations that predicted risk. The primary business was focused on employer groups and the business model was based on back-office processing. Today, the industry underwrites retail policies and competes not just on price, but on individual customer service. The strategic and operational implications of this shift are enormous, beneficial, and largely untold.

The need to focus on every single member is critical and difficult but that transformation has started. Significant investments have been made in the industry’s people, customers, and technology. The first dividends are starting to show. Of course, bad press and shrill voices sometimes dominate the tremendous work of thousands of dedicated people across the industry who are targeting — and hitting — the triple aim of better access, improved outcomes, and lower cost. Regulatory and policy changes only started the process. After the compromises are reached and the direction is set, the architects and builders have the massive, groundbreaking job of putting in the systems that do the work.

One might think that there are plenty of examples we could borrow from, companies that manage millions of accounts, but the reality is that we have a higher standard of excellence. Of course it is annoying if an airline messes up your reservation or loses your bag. Or if your credit card mistakenly rejects a charge at the grocery store. Or if a call gets dropped when you have four bars of signal. As consumers we expect convenient, flawless service at low price, or we take our business to a competitor that claims to do a better job.

But in healthcare, those accounts are not just numbers. They are real people looking for real healthcare. They are a parent making sure that their child is properly immunized. A spouse or loved one whose partner was just taken away in an ambulance, or just received a serious diagnosis that will change their lives forever. An adult child of elderly parents who cannot fully manage their affairs anymore. These are real stories, real people, and we have to do a great job making sure they get the services they need and are entitled to by their policies. We stand at the fulcrum of the relationship between our members, our providers, and our service delivery partners. There’s no room for error.

The strategic vision is rooted in data transparency, promotion of healthy behaviors in the day-to-day lives of members, and a “frame off” overhaul of the technology infrastructure. The goal of the transformation is simple: to change the basis of customer interaction away from crisis management to an integrated part of their everyday lives. This is a once-in-a-lifetime challenge, from gathering resources to maintaining intensity, but success and survival in the new age of healthcare requires us to deliver truly leading-edge services to create an integrated ecosystem for members and providers.

There are three elements to a successful transformation: the creation of a real-time data-driven ecosystem; digital automation that helps manage every member across the health continuum, and delivering to the market a suite of robust, reliable, secure, and easy-to-use solutions that engage members in their care, and enable shared decision making between them and their providers.

Of course, there are terrific advances in the technology frameworks, user interfaces, and analysis tools; the goal is to mount the new wheels, not re-invent them. Moreover, there’s been a recent explosion of health-related data from wearable devices — from blood glucometers to step counting — and a plethora of new apps focused on wellbeing. The investment in “big data” technology that aggregates all of these streams together, sometimes using open source components, and sometimes with custom solutions, have to be part of the equation. This wealth of information enables unprecedented insights, and feeds powerful predictive models that allow engagement of our members early so they can lead longer, healthier lives.

Second, the people we insure — from the young invincible to those managing chronic conditions — need to be empowered and engaged in their health. From the delivery of home monitoring tools, to tele-health alternatives for a doctor visit, the industry has to offer a menu of services that empowers members to take better care of their health, where they want to be, when they need the help, and how they want to receive their care.

Finally, the new era of managed care will focus on authentically-shared decision making between the member and their clinical care providers. This requires private and convenient access to accurate data so the provider can authorize services and referrals for members based on their benefit plan. In addition, by providing transparency into the care decision made by the provider to the member, they are empowered to partake in their own care. This brings the ecosystem together, puts the member alongside the provider in the decision making, and lets the insurance companies behind the scenes become a pro-active, constructive partner in care.

This is an exciting time in our industry. These transformations — from regulatory requirements to customer expectations, from advances in medicine to better access to care — are critical to surviving and even thriving in this new consumer-centric environment, and are mostly untold success stories of an industry that has joined the 21st century.

Copyright by Inspirant Group, Inc. All rights reserved.