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Published by: examplecg on Sep 03, 2008
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06/15/2009

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www..hN.159Jl2008
WaNttoimproveyourBeLoW-averaGeBusiNessprocesses?–iNNovatedoN’tiNveNt
The CXO
1
reads through the dismalresults rom the customer satisactionsurvey. Another indication that hisdepartment is perorming below average.Why can they not improve? He is workingnight and day to fx the problems, buthis department is still spending way too much money and his customers arestill deeply unhappy. The CXO knowsthat his business processes badly needto be fxed but with all this constant frefghting there is just no time or money to get the job done. How can he improvehis department’s business processesquickly and cheaply? 
Sound amiliar? Do you have processesthat your customers describe asbelow average? Are you struggling ora breakthrough improvement? Don’tworry, you are not alone. Businessprocesses are notoriously dicultto re-engineer and 50 to 70% o re-engineering eorts ail to achieve thedramatic results that were intended.
2
 What would you say i we oered you acheap and ast way to make all o yourbusiness processes above average?Interested? The answer is to innovate bybringing in ideas rom other companies,industries, or contexts and then rapidlyincorporate them into a better processdesign. Using these techniques wehave worked with clients to achievea 10:1 return on investment.
3
But rstlet’s see why the majority o attempts atbusiness process redesign ail.
thblwhnnng
The typical mistake that managersmake is to redesign the broken businessprocess rom scratch. The “invent”approach goes something like this.The CXO assigns a team o “experts”to solve the problem and then asksthem to report back in several monthswith a new process design. The teaminterviews as many people as possibleand then locks themselves away todesign a better solution and then re-emerge to test out their new ideas.Does the new process work? In ourexperience, sometimes – i you arelucky. Usually it either oers onlyminor technical improvements andcustomers barely notice the dierence,or it is radically dierent but simplyunworkable.The bottom line is that inventing is hard.It requires lots o time, a air amount oinvestment, smart people, and a greatdeal o serendipity. But there is aneasier way…
mhbnn
The alternative to inventing is to lookoutside your company and “borrow”ideas rom others. We have oundthat using this technique a team cantypically redesign a relatively simplebusiness process in a couple o daysand a more complex set o interrelatedprocesses in a week.
4
 Ater all, there is a strong probabilitythat a company in the FT100 or theCAC40 has a better business processthan yours. So i, like many CXO’s,you already know that your businessprocesses are average at best thendon’t wait until these processes grind toa halt through neglect. Get innovating!
cBllngn
IMD Proessor oProcurement andOperations Management
drhdn
IMD Program ManagerPartnership Programs
 
Hlgnn
The rst steps are straightorward:
•Pinpointaprocessorasetofprocessesthat
need overhauling. Start with ones that yourinternal or external customers would describeas “must-x.” Remember that businessprocesses are more than just the routinesembedded in IT systems, such as the order-to-cash. Almost every task perormed in abusiness is linked into a repeatable process.All o these processes are ripe or redesign.
•
Puttogetherastakeholderteamof8to10
people rom all the unctions and departmentsthat are part o the process or are impacted by it.
•Scheduleanoff-sitedesignevent.Typically
three or our days are enough to deal withmost processes.There are no hard and ast rules about theexact agenda or the design event. But there arethree critical ingredients: knowledge brokering(borrowing new ideas), rapid prototyping(brainstorming the new process) and collectiveintelligence (voting or what will work).
1. Knowledge brokering to bring in new ideas
Knowledge brokering is the process o taking anidea rom one context and applying it in a not-so-obvious way to another.
5
For instance, a team roma wholesale bank was working on an initiative tomove the bank rom selling low margin commodityproducts to high margin solution-selling totheir key accounts. So they looked or industrieswhich are already excellent at solution selling.They discovered that high technology servicecompanies compete ercely or market share byselling tailored solutions to their customers. Sothe team invited knowledge brokers rom IBM,
Oracle,MercurySoftware,HPandCisco.Andas
none o these companies were competing directlywith the bank, they were happy to share theirknowledge.How does brokering unction? Typically theknowledge broker joins the team by phone orvideo conerence or one hour. During the rst10 to 15 minutes the broker simply tells his orher own story as it relates to the process that theteam is redesigning and describes the “must-dos”and the pitalls. Then it is up to the team to askquestions. During this conversation the team tapsinto knowledge that is not written down anywhereand that is largely impossible to transer withoutdialogue. Much o this knowledge may be obviousto the broker but not obvious to the team strugglingwith their redesign challenge.Is this the same as best practise transer orbenchmarking? Well, no. We are not talkingabout a cut and paste solution that can be litedrom one environment to another. As mentioned,this process is closer to a product design event.O course some process elements may work“as is” but other elements that have worked orthe knowledge broker need to be ltered out. Inmany cases the team can combine ideas rom thebroker with their existing ideas to produce a muchbetter process. Or brokers may not bring anyuseul ideas but simply speaking to them helpstrigger-o or unlock a good idea rom one o theteam members.The richest source o knowledge brokers comesrom industries where being good at the processis required or survival. For instance, a teamrom a private bank was redesigning the processo opening up oces in emerging markets,so they spoke to brokers rom McDonald’sand rom a chain o pizza restaurants. Why?Because, in the ast-ood industry being able toopen up restaurants quickly and eciently givescompanies a signicant competitive advantage.It is this dierence in process competencebetween industries which creates the potential orborrowing good ideas (Fig. 1).To nd good brokers you need to think laterallyso that you can tap not-so-obvious sources. Forinstance, a team rom a European retail bankwanted to improve customer queuing in theirbranches. So they looked at other industrieswhere queuing is a major issue and where ecient
Wnlkngbnlnhnblffnnnnnh.thlgnn.
0%100%0%0%100%= world class

= 80% process competence
Industry B
Good at process
Industry A
Not so goodat process

= 30% process competence

0%

= 80%
Figure 1: Knowledge brokering potential
 
queuing is a requirement or success. They talkedto Tesco about their one-in-ront process, to Disneyabout the ast-pass, and to Woolworths aboutmobile tills. All these brokers provided the teamwith potential ideas that they could incorporateinto their redesigned queuing process. There wasno obligation to use all or any o these concepts butin the end the team recombined several elementstaken rom the brokers with their own ideas tocreate a much improved process.One question that we are oten asked is, “How canwe nd good knowledge brokers i we don’t havecontacts with people in other companies?” Well,you might be surprised to nd out that there arearmies o willing knowledge brokers out therethat most executives would not think o (see box).
2. Brainstorm the new process with rapid  prototyping
The second important element o your designevent is to incorporate rapid prototyping. Thisorces the team to
quickly 
put together a potential“answer” to the problem and then to either throwaway, rene or upgrade. It is the norm o productdesign companies such as IDEO
6
and essentialin any business process design event. The basicmessage o rapid prototyping is “do it rather thantalk about doing it.” When prototyping, use sub-groups to work in parallel on the same processdesign and then bring the prototypes together ina nal version.At the heart o rapid prototyping are iterativecycles o divergent and then convergent thinking.During the divergent phases the team brainstormsin a non-judgmental way to uncover conscious andunconscious ideas that might orm part o anysolution. Then during the convergent phases theteam sorts, groups, matches and melds theseideas into a coherent concept. The key is to setshort deadlines to create energy in the team andto push people’s thinking.There are no hard and ast rules about when to useknowledge brokering relative to rapid prototyping,except that the two should take place close in timei the team is to incorporate and recombine the
bestideaseffectively–ideallywithin48hours.If
the process being worked on is unamiliar to theteam then start with several knowledge brokeringconversations beore moving to rapid prototyping.Beginning with brokering stimulates the divergentphases o prototyping by bringing in new ideasthat can be re-deployed immediately. High levelso immersion oster creative thought and sparkinnovation when pieces o knowledge rom diversesources interact.I the team is already amiliar with the processthen go ahead and start prototyping. Stopping atvarious points to talk to brokers has the eect o
thnhnflbwhnknwlgbknglng,xhhwhlkllnfhnnbnhbffl.
WaNttoimproveyourBeLoW-averaGeBusiNessprocesses?–iNNovatedoN’tiNveNt
sfknwlgbk
•
sl
are probably the best sourceo brokering opportunities, particularlythose that work closely in partnershipwith your company. And the good news isthat they are usually delighted to help.
•
pnll
that are keen to makeyour business their business are usuallymore than willing to explain exactly howthey can make an in-company processmore eective and ecient. They can alsobe a great source o more radical ideas.
•
c
may be prepared to sharetheir business processes on the basisthat it will make you a better supplier andso in turn help their business.
•
vl-bbkng:
There are somebusiness processes where managers areattracted to work in these areas becausethey support a higher moral cause andhence are happy to share their knowledgeand experience with other companies.Good examples are processes such asresponsible procurement, diversity in theworkorce, or environmental processes.
•
Fnnl-bbkng:
Whenthe process being redesigned is locatedwithin a particular business unction thenthere is always the opportunity to accessbrokers through industry associations,or example, processes located in humanresources, nance, procurement, orshared services.
•
pfnl
are a good source obrokering knowledge, although you willprobably need to pay or their time.
•
Brokeringswap:
One concept that isdefnitely worth considering is a knowledgebrokering swap. Look or companies whohave a world-class version o the processunder redesign and then fnd out i there isa process that this company would like tolearn about in exchange.

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