I’ve been talking about innovation for the past few months. Innovative teams, 10x change, disruptive innovation, etc. A fundamental premise is the need for speed to avoid disruption by a startup. However, your speed is limited by your vehicle. You need to make sure both your vehicle and its drivers are ready for the speed associated with innovation.
Fitting with my analogy, one of the most famous approaches for efficiency was pioneered by Taiichi Ohno and Shigeo Shingo at Toyota in the 1990s. It's known as “lean” -- simply put, the elimination of waste. One of the core lean manufacturing tools is known as value stream mapping. This identifies where value occurs in your process and enables you to focus on removing everything else (i.e. the waste.) The good news is that this doesn’t apply to just manufacturing. Almost everything in your business has some sort of process flow. You simply need to draw it. Often the complexity surprises the people who live in the middle of the process every day. Our processes change regularly, but rarely with the whole picture in mind. These changes add up over the years and often yield very complex and slow processes. If your core processes in your well-established company have not been “leaned,” they can prevent innovation from moving at the pace necessary for success. Each pivot in innovation can't be a relaunch of a project or your pace of innovation will never have the momentum necessary to escape gravity and enable true moonshot thinking.
There are several processes that can hamper your ability to move at the speed of innovation. If purchasing takes three months to onboard a new vendor and another month to complete the purchase, how can you execute a new idea in six weeks? If you make financial allocations annually, based on an annual budgeting cycle, how do you adapt to the rapid changes of today’s marketplace? If you view every innovation iteration as a new project, PMO overhead can kill the project. Eric Ries’ book The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses provides a look at how startup processes work differently, and how any business, new or old, can apply these concepts to its operations. The concept of “pivot or persevere” and building a “minimally viable product” are key principles to startup speed and success. However, this blog isn’t about how to be innovative, this is about how to make sure your core processes are up to the task of supporting the entrepreneurial activities of your organization.
So, what are some simple things to help you encourage efficiency in your company?
- Value stream map your core processes: This includes, but is not limited to, purchasing, financial approvals and project management activities. A survey by Boston Consulting found that the amount of procedures, vertical layers, interface structures, coordination bodies and decision approvals needed increased by 50% to 350% in the past 15 years . Leaning your processes not only speeds up your team, it highlights the value of why certain processes exist and it gives you a competitive advantage over the startup that often lacks the fundamental processes that more mature businesses take for granted.
- The two-pizza meeting rule. Jeff Bezos’ two-pizza rule states you should never have a meeting where two pizzas couldn’t feed the entire group. The premise is that large meetings are unproductive. As John Kenneth Galbraith said, “Meetings are indispensable when you don’t want to do anything.” This doesn’t mean you cancel your all-hands meetings, and certainly many meetings are purposeful and necessary. But inefficient meetings can drain your organization and sap people of their opportunity for time to think. If people in your organization suffer from fear of missing out (FOMO), provide offline ways for them to stay abreast of the organization’s progress without auditing every meeting. By setting a culture of efficient meetings, you can help instill the value of efficiency in all areas of your team’s work.
- Drive outcomes. Cross-functional teams organized around product outcomes can thrive in an innovative culture. Siloed teams with metrics unrelated to your business value proposition can get out of sync with the cultural shift toward innovation and slow you down. By engaging each function in your most innovative teams, they can take learnings back and “pivot or persevere” with their functional processes. This helps them to prepare for the new normal of rapid innovation. Outcome thinking also helps the organization focus on the value of value stream mapping, not the waste.
Why am I so obsessed with speed? I think this quote from Hal Varian, Google’s chief economist, makes the point best:
- A billion hours ago, modern Homo sapiens emerged.
- A billion minutes ago, Christianity began.
- A billion seconds ago, the IBM personal computer was released.
- A billion Google searches ago… was this morning.
That quote is from December 2013. Today, Google performs about 3.5 billion searches daily. My point is that change is accelerating, particularly technology change, and hence startups have greater leverage because they start with the latest and greatest capabilities. This is one reason businesses are racing to use cloud computing. It enables them to leverage technology advances in computing at the same rate as startups. Startups are also not encumbered by decades of process control creep. If you are a mature business, you need to turn your experience into an advantage. By leaning your control processes, you can deliver strong governance that startups lack, with the efficiency that comes with “Kill the Company” thinking.
By “tuning your car” for today’s race to the future, you can help your company win. Process efficiency will not only help your “car” -- it will also energize your “drivers.” And as you and I know, energized employees are key to your company's success.
 Yves Morieux, “Smart Rules: Six Ways to Get People to Solve Problems Without You.” Harvard Business Review, September 2011.
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