“The light bulb wasn’t invented by continuously improving the candle…it was about understanding what the job to be done was and then stepping back to look for solutions to solve this”
You could spend lots of time and energy making a candle burn longer and brighter, but you would never get to a light bulb – it would always be a candle. In the same time if you don’t truly understand what the ‘job to be done’ is then you could waste time and resources improving processes not fit for purpose.
A really great point to reflect on. It reminds us how important it is to ensure that the technology is implemented to support the business, and not the other way around. In the end, it all boils down to this – does your current business process actually fit the needs of your customers?
Process Innovation vs Continuous Improvement
“At what point do you stop with continually improving and look for a new process or new innovation?”
Continuous Improvement is about observing the way things are done and improving them. Typically, there will be gains in efficiency or reductions in cost. Continuous improvement happens over time, bit by bit, and is never finished – with every change resulting in a small gain. The main focus is on improving of what is already in place.
Process Innovation puts the emphasis on solving each problem in the most effective way. Innovative changes tend to be big and disruptive, often reshaping or redefining the way things are done.
No improvement of a candle would result in a solution as effective as the light bulb. That requires an innovative shift in focus. But at the core, both process innovation and continuous improvement are intended to do the same thing – to help us achieve our goals more effectively. And although none of us would want to light our offices with candles, we wouldn’t want to use the early versions of the light bulbs either. An effective strategy for growth considers both: innovating and improving what’s already in place.
What can go wrong?
The majority of the companies betting on the digital transformation ask themselves this question: “How can I organize my existing services/products better with the help of this new digital technology?” This is a wrong thing to ask when it comes to digitalization of the business. The process usually begins with documenting all the existing ‘as is’ business processes and giving this to a software vendor to implement in their new solution or platform, and then expecting a different result. It puts the company at a high risk of re-inventing old problems in a new technology.
Why aren’t companies taking the opportunity to digitize and improve at the same time? Most probable answer is that oftentimes digital vendors don’t have a slightest idea about their customers’ business needs, as well as have no interest in growing their customers’ bottom lines or market shares. Instead they have a large team of software engineers and project managers, who are very interested in growing their personal portfolio and digital tool kit.
How to make it right?
The best recommendation is to always ask ‘why’ and analyse every business process to see if it can be done better, before looking at any software product or solution.
The right questions to ask yourself before reaching out to any software vendor is this: “What are the real needs of my clients and their business? How can I understand their real (and constantly changing) needs better and how can I provide them with better fitting solutions with the help of digital technology?”
To build effective new business models and take advantage of digital technology, the companies need to agree on the strategic way forward, adopt new performance metrics, and rebuild their networks as well as their older processes (in fact, remove them).
The new economy has new building blocks: SaaS, API’s, big data and improved customer experience – all based on well-designed business processes. Changing the way you think about your business and your business processes is the true key to success.