What a year! 2020 has certainly been one for the record books. It has been marked with dramatic and volatile economic change. What has made the current environment such a shock to most companies is that it has come on the heels of several years of stable and impressive economic growth.
As a result, we see companies facing even greater pressures to mitigate losses, boost financial returns, enhance good corporate citizenship, and seek new ways to expand. What this means for most companies is that to continue their growth in a sustainable and unencumbered way, they must consider streamlining their operations if they are to be properly positioned for growth.
It sounds straightforward enough right? To streamline for growth, simply reduce costs to increase profits. Then find ways to innovate so you can increase market-share and sales-revenue, right? It is Not.
Because when the chips are down, most companies fail miserably at producing real, meaningful, and lasting results. Often making the same mistakes as lifetime industry veterans, expert consultants, and their own predecessors. Even tried and true strategies they’ve always relied upon are now failing and they don’t know what to do.
What’s more, you may be shocked to find the areas where they fail are often totally avoidable. Why? Because they get two things fundamentally wrong, and that is the timing in which they change (i.e. the “When”); and the manner in which they make the required changes (i.e. the “How”).
When and How? Continuous Improvement and Do It Now
The answer to when you should streamline operations is so simple that I can explain it in a single word: Now. But before you think that I am insulting your intelligence with simple concepts; it is more about the closely related concept that’s saved companies lots of trouble before ‘the economic tide goes out’ so to speak. But it’s never too late to put in place.
That concept for streamlining operations is called “Continuous Improvement.”
Continuous Improvement has been defined as the practice of constantly re-examining and improving processes. However, it’s not necessarily what you do, but the way in which a company or team operates. Adopting continuous improvement within a company typically means three distinct things:
- Creating a Culture of Improvement: and not just management or a specific team but everyone in the company being dedicated to this culture; so we can ensure the changes are both long-term and lasting.
- Maximizing Efficiencies: or minimizing un-necessary waste and cost in the company while also seeking opportunities for automation and process improvement.
- Focusing on Growth: and incrementally improving products, processes, platforms, and services, while innovating new and differentiated capabilities or expanding into new markets.
A Culture of Continuous Improvement & Operational Excellence
In order to build sustainable, solid, and long-lasting value in business, you must always be streamlining the way you operate, innovate, maintain quality, produce value, and achieve measurable, tangible, immediate, and repeatable results.
Why? Because each iteration of process improvement becomes exponentially simpler and easier; and also requires your competitors to secure far greater investments and resources to compete with your advancements -if they’re not!
More importantly, it makes it orders of magnitude easier for your own business and internal teams to achieve amazing innovations and differentiating business models by utilizing existing work streams to make profitable business advancements.
It’s important to note that by far the greatest area of opportunity to leverage continuous improvement is within the IT organization -and to do so by leveraging the agile development methodology and principles of software-development-life-cycle, strategic planning, principles of cost optimization, and most importantly forward-thinking technology investment strategies!
Additionally, as executive-level IT leaders, we have the greatest ability and position to empower the company’s different strategies for growth by leveraging the technology, automation, tools, and teams necessary while simultaneously finding ways to reduce overall costs. We can also consistently support re-organization for growth while solidifying differentiation. In many ways, the power is directly in our hands to be the greatest enablers of company growth.
On the other hand, think of the times you’ve worked for a company where this was NOT being done. It can be an especially frustrating experience as non-executive employees when you’re doing amazing work for a company only to find your work is being done in vain because upper management is getting it wrong quarter after quarter, failing to act NOW, and without the correct HOW.
So why do so many executives, even some of the most seasoned veterans get it wrong? Because today’s business world changes so quickly, that what was relevant even 2-3 years ago often may not even make a shred of difference today. Additionally, in the past 5 years alone, the average IT organization footprint has become dramatically more complex from a People, Process, and Technology perspective and many executives have not kept up with the industry. Additionally, to perform direly needed turnarounds, today’s corporate boards simply can not afford the time it takes to hire out-of-date or tired executives to figure it out on the fly.
Continuous Improvement takes rapid and immediate execution and a dedication to operational excellence by executives who have a natural bias for action backed by a data-driven management style. In fact, ‘Operational Analytics’ is one of the fastest-growing functional areas of the trade for IT-executives to make major meaningful impacts in Continuous Improvement right now.
To learn more, please check-out another article (2 min read) that I wrote back in early 2019 called ‘The Ultimate Guide to Operational Analytics.’ It outlines exactly how Operational Analytics is used in business and 5 common use-cases. [The article has been ranked #1 on Google for almost 2 years and provides practical and immediate applications.]
Maximizing Efficiencies and Cost Reduction: How to Make it Effective
There are several fundamental areas every executive should evaluate for maximizing efficiencies within their organizations and they are as follows:
1) Organizational Structure: is the Company/Business Unit/Functional Area structured properly for success? How are departments, teams, roles, responsibilities, and individuals distributed across the organization? Is the department decentralized, consultative, functional, hub & spoke, or centralized? Does it have the potential to become a true “Center of Excellence?”
2) Outsourcing: Depending on the extent to which your organization is doing this today you can quickly establish the opportunity areas for more or less. “Specialization of Industry” is one of the most valuable tenets of economics and has proven time and again that some capabilities are simply much better when they are provided by external vendors.
3) Process Improvement: Leverage agile development for all projects, specifically Kanban or Scrum. These are also proven to be some of the most efficient and effective ways of completing projects in iterative approaches and they provide transparency to all stakeholders as well.
4) Platform Automation: Find every opportunity possible to invest in the right tools and technologies to automate manual work and improve processes so you can save time and labor at every turn.
Focusing on Growth and Incremental Innovation through Differentiation
Every company on earth wants to grow, and while there is no wrong way to eat a Reese’s, there also is no wrong way for innovating for growth! As long as it is moral, ethical, and legal; every company is free to follow it’s own process for finding growth, and usually, we would expect that the greater the growth of the company, the greater the process!
As noted on InnovationFocus.com, who explained it phenomenally: “Strategic intent must drive innovation. It is rarely, if ever, the ‘light-bulb’ notion of new ideas that deliver successful new products and services for organic growth. The reality of innovation is more like a ping-pong game – a back and forth interaction between the direction from strategic intent and the discipline and rigor of process for tactical action.
At least 70% of the new product/service development investment in organizations is driven by the need for organic growth through incremental innovation. This necessitates effective life-cycle management. We should ask ourselves if we are disciplined and rigorous enough in our ability to continually come up with meaningfully differentiated incremental innovation.
The obvious dangers of not doing that, is that one-off product introductions are not a good investment, and line and brand extensions that are not meant for consumers just suck up resources with no real value-added. The beauty and challenge of lifecycle management are in optimizing a platform. Lifecycle management, at its best, understands that each product has a pathway for growth.
Here are 3 tips for innovating successfully inside the lifecycle management box.
- Articulate a strategy to leverage the intersection of new product development and product management with the goal of creating pathways of meaningfully differentiated products within existing categories for current customers. This can have the collateral strategic benefit of less product introductions (costs) equals more success – incremental revenue).
- Practice smart, tactical, product lifecycle management. For this, you need to have an agreed-upon process that focuses on the customer, leverages technical capabilities, and understands a market’s trajectory. You need to apply creative problem-solving tools and techniques for finding, refining, and testing the best ideas to take into development and then commercialization.
- Make segmentation your friend. The core product may be a compromise across segments. Your incremental innovation may create greater loyalty within important segments as you make the product “just right” for them. Keep this in mind when you test the redesign. Don’t downgrade it because it does not work for the other segments.
While there is no one right process for innovating within the lifecycle management box, it is recommended that you perform the steps in the process diagram below, accomplishing them with the use of appropriate tools and techniques in each of the activity areas.”
In addition to the above, I’ve also created a framework for continuous improvement and innovation within IT Organizations to enable rapid growth. IT Organizations can be particularly complex and as a result even more difficult to navigate and manage than other departments. The 7 P’s for rock-solid IT Continuous Improvement are as follows.
The 7 “P’s” of IT Continuous Improvement for Rapid Growth
As a company, we have to take steps to create an environment where we can create effective, streamlined, and sustainable operations. Below, I will outline my model for “The 7 P’s of Continuous Improvement for Rapid Growth.” The only problem is that it is extremely rare to find leaders truly focused on doing this… and these P’s are the true key to the one single “P” that all stakeholders should actually care about the most: Profitability.
This model is specific to best in class IT Operations. Getting these dialed in for continuous improvement makes all the difference between organizations that streamline for growth and those who do not. They are as follows… People, Process, Planning, Platforms, Production, Provision, and Performance.
1) People: if there has ever been a more important asset to a business, please tell me. This P is for People -on the team with the required skill sets. They bring unique perspectives and backgrounds and are required to complete all work. Having the right individuals on the right teams in the right balance is critical to the success of any organization. Leaders who lead people best are able to build and design ‘centers of excellence’ or teams that function at extremely high levels of performance when they have all of the ‘aces in their places.’
2) Process: this means solid operations management and true documentation of all processes. This is required and also contributes to solid business continuity and decreased business risk. A leader should care about both the company’s data and business plans as well as the tools needed to develop the work to understand the processes behind all projects.
3) Planning: this is both high-level strategic executive planning, but equally importantly involves empowering the entire organization to plan PROJECTS with the IT organization effectively. Ensuring absolute transparency across the organization, effective and efficient prioritization, key milestone discussions, and dated timelines for completion. Inviting key leaders to IT-project-planning meetings makes everyone part of the process.
4) Platforms: identifying platforms used to collect, analyze, create, track, and communicate all work (i.e. corporate intranet, help-desk, MS-teams, Slack, JIRA, Trello, etc.). Once we know what platforms we are using, we need to leverage our PMO to use these platforms effectively.
5) Production: this where we get to the point of the execution of pre-planned, platform-supported, process-improved, prioritized, feasible, and agreed-upon projects. This is where our project-management-professionals (PMP’s), including BA’s, Scrum Masters, and Project Managers will ensure our experts are all working on the right projects and being utilized to their maximum capacity for complete resource planning and allocation.
6) Pronouncement: As projects are completed, they MUST be socialized and communicate objectively back to all key stakeholders across the organization quickly and effectively via all appropriate mediums. What good is a project well done if nobody knows about the new capabilities? This is also the absolute BEST time to reward and recognize top talent! (Also, to identify, coach, develop, and manage poor performers.)
7) Performance: IT-Operations must ultimately leverage our work to impact desired company performance! This is where we are constantly using data to measure the impact of our projects on performance. We must have a designated timeline of “post-project” follow-up to measure and analyze the impacts of our initiatives so we can continue to measure and ensure our initiatives are working as intended.
When organizations realize the complexity and work involved in effectively managing large and diverse IT Organizations and managing them well; having the right leadership, process, and technology in place becomes crucial for effective continuous improvement. With this in mind, the above is a brief structured overview of the How, but if one thing has become the new normal for IT Organizations going forward to be able to streamline their operations for growth, the time is and always will be… Now.