Time and time again, we have heard business owners and executives make this statement. Coaches will recommend a disciplined approach to prioritizing each and every task, motivational speakers will recommend a “just say no” approach, but our philosophy is to build systems around decision-making.
Business owners are reluctant to delegate decisions and tasks because of a strong need to know about everything that happens inside the company – and perhaps the owner or executive never learned how to delegate. Over time, as the organization grows in size and complexity, the key decision-maker becomes more of a bottleneck, and the heuristics (rules of thumb, experience, requirements, dependencies) necessary to inform a smart decision are all trapped in the decision-maker’s head. Thus, the cycle of not delegating and becoming the bottleneck perpetuates.
With careful analysis, it is possible to extract this wealth of knowledge from the decision-maker’s head and build a system that is capable of replicating many of the same smart choices or – at the very least – serve as a filter that brings attention to crucial decisions only when necessary. From a large corporate perspective, this system may look like an executive management team. For the small to medium-sized business, this system could be a standard set of processes that inform role players on what to do in certain instances.
One of our clients was undergoing a transformation, and customer service response times began to exceed acceptable levels. After deeper analysis, it became evident that one person had become the bottleneck who was impacting the team’s ability to react quickly to customer inquiries. We worked with this individual to map her decision-making criteria and captured that process into a set of protocols for the rest of the team to follow. In one week, we measured a drastic improvement in customer response times and the organization was able to benefit from the dissemination of knowledge that had once been in one person’s head.
Though modern science cannot actually clone a person, it is possible to build a system that can serve as a pretty effective substitute.
This sobering accusation about the NSA being overwhelmed with data should be a wake up call to businesses who are collecting data for the sake of collecting data. It is becoming increasingly easy for organizations to collect data on almost every aspect of their existence: customers, sales, inventories, markets, costs, operations, etc. but without a process for collecting troves of unstructured data, synthesizing the data into information, and translating information into action – you’re not effectively wielding the power of data.
- Improve Revenue
- Identify corellations and opportunities to cross sell products or services
- Identify and prioritize investments in specific customer / market segments
- Inform the supply chain to make smarter decisions as a whole and be more responsive to changing customer demand
- Lower Costs
- Reduce the amount of overstocked inventories
- Improve production efficiency and performance
- Flag customer behavior that may indicate a drastic change is on the horizon
- Predict when an asset may be expiring so action can be taken to prevent downtime
- Benchmark utilization and identify the superstars
We worked with a client in the telecommunications space who was collecting data on all of its customers. The client was interested to know if there was a way to improve customer retention, so we built a database around those customers with the goal of creating profiles based on certain characteristics and attributes. After careful analysis and many iterations of challenging and confirming assumptions, the result was a set of heuristics that enabled our client to have better conversations with their customers by anticipating customer needs, improve customer satisfaction, and increase average revenues per customer by offering more appropriate solutions.
The customer data sets contained all the pieces of the puzzle, but it took a team of people who possessed domain knowledge, an understanding of mathematics and statistics, a certain level of curiosity, and patience to assemble everything into a cohesive picture. This is the power of data, to information, to action.
NSA Mission Statement
The National Security Agency/Central Security Service (NSA/CSS) leads the U.S. Government in cryptology that encompasses both Signals Intelligence (SIGINT) and Information Assurance (IA) products and services, and enables Computer Network Operations (CNO) in order to gain a decision advantage for the Nation and our allies under all circumstances.
In other words, the NSA uses data to protect the Nation. Is your organization using data to protect its territory and gain a decision advantage over competitors?
Have you ever found yourself thinking:
- “This could be so much easier if… ?”, or
- “Why was I trained to do this task this way, it doesn’t make any sense?”, or
- “Who decided it would be a good idea to do things this way?”
Processes are designed and defined to accomplish a task, but, over time, as systems, technologies, and people change, the processes are not updated to reflect new norms. Thus, workarounds AKA “Band-Aids” are created as a way for people to bridge the old with the new. Eventually, people get so caught up with workarounds that no real work gets done. In other words, “Band-Aids” are highly inefficient and can even be detrimental to the operations of an organization. They are only meant to be a temporary solution that address an acute pain, but never really solve an underlying root cause. Unfortunately, “Band-Aids” often become part of the process.
As an example, we worked with a client to map and understand tier one supplier spend in an effort to improve the cost cost structure of their supply chain. Sounds like a simple enough exercise, except for the competing definition of Cost in the engineering, purchasing, and accounting functions. Over time, each group had figured out different tricks to adjust for other groups’ cost calculations in order reflect each other group’s numbers. The tricks had become so ingrained that analysts were taught to make the adjustments based on who was asking for the report.
Additionally, the patchwork of “Band-Aids” created huge inefficiencies and confusion in communication. There was additional paperwork, irrelevant quality controls to validate the numbers, and individuals dedicated to ensure the workaround performed smoothly. Agreeing on one number required weeks of effort, when it could have just been a simple calculation done in a matter of minutes.
Ideally, one standard definition of Cost could have saved this client time and money, but peeling away the “Band-Aids” was much too painful. Does your organization tolerate practicing old and costly habits rather than peeling away the workarounds to streamline critical business processes?