Why are we lagging?

Here is a response I penned this morning in one of the LinkedIn process groups.  The person who initiated the discussion was asking the question “Why are Americans lagging in trying new things in relation to processes?  Even the two approaches of Lean and Six Sigma are not being adhered to as strictly as in the UK and on the continent.”  

My response to that question is:
You have hit directly at the core of a problem I keep running into.  I have been trying to connect conceptually and intellectually with both business leaders as well as academics around the idea of business design. Every principle you can think of in relation to process design is equally true for business design.

Here are some examples:

  • A poor process design can never result in great process performance.
  • The key to process performance is in the design, not the strategies.
  • You can not execute process strategies unless the process design can accommodate those strategies.
  • Processes have a design, just like products.
  • Performance requirements for processes should not be arbitrary but instead based upon requirements of the market place and stakeholders.
  • Before making adjustments to a process you should always document the process to reduce the likelihood of unintended consequences.
  • When documenting a process what one is actually doing is documenting the design of the process.
  • Process management consists of four steps (DIEM): Design (according to performance requirements); Implement (the design according to specs); Execute (the design according to specs); and Manage (keep track of KPIs to know whether design is meeting requirements of two sources: customers and shareholders).  Go back to first step when design either does not meet performance requirements or performance requirements change.
  • Now reread every bullet in the preceding paragraph and substitute business for process. And every sentence is equally true. Only now you are operating at a higher level, one where processes are just one piece of the puzzle.

Why am I having trouble getting across the importance of business design to executives and academics? I think for two reasons: 1) they have trouble with critical thinking. They have been taught what to think and not how to think. They filter everything through what they have been taught and can not see other possibilities. This is reinforced by consulting companies who keep selling them the same processes (strategic planning for one) that continue not to work (which I can explain why rather easily). And 2) they have too much invested in the way they currently think to allow something new to come in. I have been especially disappointed in people I know and respect and have even studied under in their inability to consider what I have to say. They have been teaching the same ideas for years and have all of their case studies lined up for students to review, analyze and report. But the universities and colleges are supposed to be the heart of new ideas and creativity and what I am finding is a stone wall just as thick as those of the business world.

And I see some of that same resistance in several of the process groups.

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Speaking Engagements

January 10, 2009 Leave a comment

Throughout my college years I traveled all around the United States – for free.  My home base was California, Pennsylvania the site of a small state-supported college.  During those years I spent a summer in Alaska; went to California three times; Florida twice; New England once and enjoyed the Mardi Gras.  I spent one summer traveling back and forth from Hamtramck, Michigan to Rillton, Pennsylvania every weekend to see my girlfriend.

My mode of transportation was my thumb.  I simply stuck it out where the driver of every car passing by could see it and waited for some kindred soul to stop and offer me a ride.  When I first experimented with hitch hiking I was very tentative about putting my thumb out.  I did not want to seem too aggressive nor did I want to impose myself upon the drivers.  So in my meekness I barely held my thumb away from my body and I never looked directly at the driver.  End result was   people were confused about what I was doing on the side of the road.  They thought I was waiting for a friend to pick me up or that I was loitering with nothing to do. 

After hours of disappointment I had the epiphany that I needed to put my thumb out where everyone could see it.  I needed them to know that I was asking for a ride and then let them decide if they wished to offer it or not. 

My thumb went out, I looked directly at drivers (not defiantly) and suddenly my success rate dramatically increased.  One of my trips from Pennsylvania to Lancaster, California took only three rides and 52 hours.  As one friend said:  “It takes longer to drive it than that”.  That trip held many interesting stories (accidentally setting a car on fire; being offered a large knife by someone who had been stabbed; being in a car chase around Albuquerque NM, and riding through the Mojave desert in the back of a pick up truck being driven by two cowboys).

Well here it is nearly 40 years later and I am ‘sticking my thumb’ back out and looking for opportunities.  Only now I am not looking for a car ride but instead I want speaking engagements.  My blog, my company’s website and my webinars on business design are all ways to make the public aware of ideas around the concept of business design.  And while writing can be effective I prefer to directly speak with people about it.  I want to speak with as many people as I can about the impact design has on the performance of their businesses or agencies.  They need to know that 80% of the time the performance issues facing their business are design-related.  Executives need to be reminded that the design of the business is their responsibility and they have to be shown how they can escape the business life/death cycle (Strategy Cycle).

If anyone reading this blog can point me to a speaking engagement I will be very grateful.  Business design is the key to change, not strategy, and I welcome the opportunity to speak about it.

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Make Contact

January 1, 2009 3 comments

If the ideas you read on this blog are of interest to you, let me know.  I would welcome your input.  You can email me at skirkwood@gmail.com or through the contact page on my business website at www.businessdesignconcepts.com

I look forward to hearing from you.

Happy New Year

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Merry Christmas

December 27, 2008 Leave a comment

Just wanted to extend a Merry Christmas and Happy New Year to all reading this blog.  Fortunately we had children and in-laws with us during the holidays and it was wonderful.

This should be an interesting year – globally.  We can see from the US bail outs how interdependent our companies and countries are so we may rise and fall together.  I am not particularly optimistic (short-term) because of the adversion to facing our problems head on.  We create artificial solutions which only buy us some time – in hopes that somehow things change enough to avert a complete melt down.  None of us want severe economic times but we will most likely have to experience more pain than we have thus far.  Bite the bullet and lets get on with recovery.

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Beyond Strategy

December 4, 2008 Leave a comment

I have essentially made a career out of being able to dig down and uncover the root cause of problems.  For many years I served at the request of the CFO of a large consumer goods corporation.  He would crunch the numbers, do some analysis and then say “Go down to the plant at Dayton, Tennessee and see what is happening in the warehouse – invoices are arriving to dealers before the product does.”  And off I would go, dig through all the issues, discover the real source of the problem and develop solutions on how to fix the problem.  The CFO would pick from the choices I had offered up and then I would lead the charge to make changes.  It was a great deal of fun.

 

But there were two itches that could not be scratched in the role that I had.  One, often times the solutions I developed were only partially implemented.  I would create what I felt was a great design but reservations of local management would prevent them from fully implementing my solution.  And though improvements were gained, they often fell short of what they could have been.  I wanted to have control of an organization where I could design, implement and then execute. 

 

The other itch was wanting to participate in the setting of direction for the corporation.  One of my inherent strengths is the ability to think strategically.  I wanted to be in the Board Room when direction was being set and strategies were being developed. 

 

In order to gain access to that august group I had to take on the role of an executive so when I was offered the CIO position I took it.  I believed I would now have control over an entire department and could mold it in the image I felt would best serve the corporation.  And I would participate in strategy sessions. 

 

Indeed I did get to shape the IT department but there were constraints placed on me by the CEO.  This is to be expected.  This one form of governance for the IT department.   

 

And I became disenchanted with strategic planning.  If every company goes through a planning process then why do so many companies underperform?  What is it about the planning process that is not working? 

 

Turns out it has to do with design.  A strategy can only be executed if a design can accommodate it.  Executives fail to realize that their business has a design and therefore ignore it or think that changing strategies has an effect on business design.  It does not.  To improve the performance of a business you have to go beyond strategy!  You must look to the business design for success.

General Conversation

November 3, 2008 1 comment

I joined two groups on LinkedIn – one for general business opportunities and one for executives.  Since most of the entries in both groups are advertisements for services I decided to use it to spread the word about the value design plays in the success of any company.  I did receive two responses from one thoughtful gentleman and have decided to publish our dialogue.  My comments are in black and his are in blue.

 

This Post will be used to share questions that are posed to me and my responses to them.

 

 

Beyond Strategy! The closest thing to a Silver Bullet in improving performance is Business Blueprints.

 

Strategy alone can not take you where you need to go. The design of each business must factor in the goals it has set and the strategies it wishes to execute. Goals that can not be reached and strategies that can not be executed are harmful to the entire organization.

 

Design is the key to success, not strategy. 80% of performance problems can be tied directly back to a poor design. This is true with businesses, processes and products. Go to my website at http://www.stankirkwood.com and see the top 10 common Business Pain Points that can be addressed with a set of Business Blueprints™. You can also request a presentation of the system we created to address business design issues at http://www.businessdesignconcepts.com.

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Plan you work and work your plan!

 

 

Business Design is much more than creating a plan and then executing that plan. Probably every large business that has failed had annual (business) plans as well as strategic plans.

 

The progression is: establish goals and identify desired strategies; design markets to support those goals; design processes to support the markets; design an organization to execute the processes, and design systems to support all of the above. The overall design must be able to execute the desired strategies. Then you create the implementation plan and execute the implementation plan. After the design is implemented it must be executed. An execution plan must be created and executed.

 

 

 

 

 

In theory I agree, however I’ve been associated with too many businesses that can’t get out of their own way due to the weight of the planning process. And that process allows too many to forge their own agendas, diluting the resources to simply move from “A to B”.

 

I sat in too many senior management planning sessions just mumbling on how we were able to make the simple overly complicated. And generally, once a process document was crafted, the senior most managers went on their way, comfortable in knowing their job was done! Never did it occur to them that outside of making sure their board meetings notes were put in lock step with the plan, did they ever think they actually had to work that plan themselves! That’s why most major companies fail miserably when it comes to a plan.

 

 

I was cleaning up some emails and reread your message to me.  You hit on several problems in your response:  1) the weight of a planning process; 2) covert agendas; 3) making the simple complex, and 4) lack of commitment or understanding on the part of senior management on their role in the implementation of a plan.

 

Each one of those issues does cause problems in many companies today.  If a company were to go through the Business Blueprinting™ process the first three issues would be immediately addressed.  The process itself is intentionally designed to deliver maximum impact with minimal effort required by the senior management team.  The entire process of documenting the design of a company, analyzing that design to determine whether the company’s goals can be achieved and strategies executed and then redesigning the business to ensure success only takes eight days of our clients’ time.  It takes us 8 – 10 weeks, but only eight days for our clients. 

 

During the gathering of company and competitive environment information agendas become apparent.  Why?  Because our goal is “Total Business Performance”.  We are looking for what is necessary for the business as a whole to be successful.  As Dr. Farson suggested:  “Leaders have to become designers and designers need to become leaders”.  In actually we do the design with the input from the leaders.  Our design is actually a recommendation which the leaders need to agree upon.  It is exactly the same role an architect has in designing a house.  S/he would gather important information from the prospective home builder and then design a house to meet those requirements. 

 

We do the same in business – which leads to your third point about complexity.  Businesses are complex.  The challenge is to simplify them as much as possible and we are able to do that.  Basically all businesses are the same.  Certainly their products and services vary and how they do their work varies but the foundation is the same.  For instance every business must create demand for its products and services (unless you enjoy being a monopoly or government agency).  And every business must fulfill the demand for its products and services.  We have created a common framework, common structure, common DNA, and common metrics for all businesses.  We simplify the complex.

 

Another way we help address complexity is by documenting the design of the business.  Five people can use the same word and have a different understanding of its meaning.  By putting a picture in front of executives it brings them together and they share a common understanding.  Those meeting rooms you spoke about are often like the Tower of Babel and they don’t even know it.  We give them the common language of pictures.

 

Lastly, we do our best to involve the senior management team by delivering not only an updated business design but also a strategic plan, master project plan and a governance model to keep the design current (Strategic Management).  The master project plan is a very strong reminder that their responsibility is not over when the meeting ends.  If the CEO will take ownership of the master project plan (does not need to manage it but does need to own it) then the issue you surfaced is greatly diminished.

Invalid Business Assumptions

October 24, 2008 Leave a comment

Each person goes through the day making assumptions.  We assume the sun will rise in the east; the light will turn on in the bathroom; the shower will have hot water; the car will start when we leave for work and our computer will connect to the internet.  The number of assumptions we make every day as we walk through our lives must add up into the hundreds.  We are blind to them because events unfolding in front of us do not challenge our assumptions but instead support them.  Unknowingly to us most of our assumptions are strengthened every day. 

 

Perhaps assumptions are mental habits or conditioning and serve a similar purpose to learning how to tie shoes.  When we first learn to tie a shoe it requires considerable attention or intentionality.  We think about each move and either verbally or mentally repeat the instructions.  It is a very manual and slow process.  As we learn to tie our shoes we create ‘moving memory’.  The more we practice the less attention is required and the faster and smoother we become.  After the memory is completely programmed within us there is no benefit to keep thinking about each movement.  Movement without thought can be a good thing.  Ask any athlete about thinking too much when playing a sport.  Just let your body do what it does and it will perform well.

 

Assumptions are often referred to as something bad.  Many times I have heard the phrase:  “You know what happens when you assume something?  Makes an ass out of u and me”.  So what would our lives be like if we didn’t make any assumptions?  What if we thought through every situation and condition before making a decision or taking a step?  If making assumptions is a bad thing then it follows that not making assumptions is a good thing.   

 

We have all had an experience where we made an assumption that led to an unexpected and negative incident.  In those situations we vow to never assume anything again because it can sneak up and bite us.  Is that vow realistic or even desirable?   

 

Why do we make assumptions?  To relieve ourselves of the active thinking about events that almost always occur based upon our experiences.  We don’t waste our time thinking about whether the sun will rise.  We don’t think about how our bodies will digest the food we have for lunch.  We don’t think about many things going on around us.

 

So from one perspective assumptions are time savers.  That is until the assumption does not work in our favor.  It is similar to the noise the refrigerator makes when it is running – you don’t notice it until it stops.  We don’t see our assumptions until things do not go according to plan.  Then we look for what we missed and try to see how it could have gone differently.  Quite often we discover an action we overlooked but did not recognize because we made an invalid assumption.

 

This is especially true in business.  Decisions based upon invalid assumptions can lead to disastrous results but we are blind to the assumptions until the results are coming in.  And then it can be too late. 

 

Imagine the value of a list of common invalid business assumptions that lead to poor performance.  By knowing the assumptions you can avoid making them.  Stay blind and you are doomed to repeat them over and over again. 

 

During the past four years my business partner and I have been compiling such a list and have found them to fall into four categories.  For the sake of brevity I have only included one invalid assumption in each category along with a description of the assumption.  I have three more invalid assumptions for each category listed in a lengthier document.  If you wish a copy of that document  contact me through this blog or directly reach me at skirkwood@gmail.com. 

 

The first category of invalid business assumptions executives make are about the Goals they develop.  These are important assumptions because the goals of a business establish the performance requirements for the entire enterprise.  For instance if a corporate sales goal is to increase revenue by a certain dollar amount then the year will be considered successful only if the business performs at that level.  Anything less is unsatifactory.  Goals and performance requirements are the same thing.

·        All Goals are Achievable.

o       Just because you set a goal does not mean you can achieve it.  Businesses are challenged to set “Big, Hairy, Audacious, Goals” (BHAGs) but if those goals are not achievable then setting and working on the goals is actually harmful.  There is nothing wrong with setting stretch goals but they need to be attainable.  If it is impossible for your business to grow a certain percentage with your existing Business Model – there are five discretely defined components to a Business Model – then you have to either change the goal or redesign your business to be able to achieve that goal.  If you are not designed to achieve the goal then no matter how hard you work or push your people you will not reach the goal.

·        Invalid Goal assumption 2

·        Invalid Goal assumption 3

·        Invalid Goal assumption 4

 

The second category of invalid business assumptions made by executives concern the Design of their business.  There seems to be an intuitive understanding that businesses have a design because the term Business Model is used frequently by CEOs.  A model is the physical manifestation of a design.  When a product is prototyped the designer creates a set of blueprints (designs) that are used to build the model.  The next time a CEO speaks about his/her business model ask him/her to show you the design.  And since the CEO’s understanding of the business design is so vague it is easy to have invalid assumptions about it.  Here is one.

·        Improving Information will Improve the Design of the Business

o       Many executives look to IT systems to solve their problems.  With better information they will be positioned to make more intelligent and timely decisions.  Executives need to remember that systems support organizations / organizations execute processes / processes create products or services / products or services are delivered to customers.  Systems are the last thing executives should be looking to change!  Will replacing the dashboard (information system) in your car change its performance capabilities?  No.  The root cause problem in your business is seldom the result of any IT system.  The fault usually lies in the design of the business.

·        Invalid Design assumption 2

·        Invalid Design assumption 3

·        Invalid Design assumption 4

 

The third category of invalid business assumptions deals with Strategies.  This is an activity that nearly executive has engaged in and can relate to.  It is the source of out-of-the-box thinking and it sets the direction of the corporation for years to come.  Strategic planning is considered essential for the survival of every company because executives know that to be stagnant is to die.  They have to change and the vehicle for change is thought to be strategies.  And if this is indeed the vehicle (which we know it is not) then any invalid assumption in this group can be crippling.  Here is the first invalid business assumption in this group:

·        Strategies are Strategies

o       Not all strategies are created equal.  There are at least three types of strategies:  design strategies, implementation strategies and execution strategies.  The nature of each type of strategy is very different as well as their timing.  Business executives often confuse a design strategy with the design of the business.  They are two completely different ideas and need to be kept separate in order to reduce confusion.  Know the difference between design and strategy.

·        Invalid Strategy assumption 2

·        Invalid Strategy assumption 3

·        Invalid Strategy assumption 4

 

The fourth group of invalid business assumptions is about Performance.  Performance is important for the health of the organization.  If there is substandard performance from the customer’s perspective then sales will suffer and the business will fail.  Customers are looking for companies that can offer the greatest Value Proposition.  If there are performance issues as it relates to the return on investment then stockholders will opt to invest their monies in better performing businesses.  Shareholders are looking to create personal wealth and companies that are not financially successful suffer in the market place and that has a negative impact on the company’s stock price.  Actual Performance is very important in the long-term prospects of any company.

·        Performance Problems are Always Execution Problems

o       Business executives are aware of the impact that the quality of a  design has on the performance of the product but they fail to apply that understanding to their business.  80% of the time the quality and relevance of the business design is at the root of performance problems.  A poor design can never result in good performance.  But since executives are unaware of business design they see execution as the culprit.  Execution is particularly attractive to management since those problems are the fault of the employees while the quality of the design is management’s responsibility.

·        Invalid Performance assumption 2

·        Invalid Performance assumption 3

·        Invalid Performance assumption 4

 

Knowing that you are operating under an invalid assumption may give you the chance to change your decision making.  If you are making assumptions about things that you can control then you do have the option to make changes.  If your assumptions are about large external events such as the economy, then you can not control the outcome but you can develop scenarios.