Better and Better

James Surowiecki, author of The Wisdom of Crowds and business and finance columnist for The New Yorker, published an article in the magazine’s Nov. 10, 2014, issue entitled, “Better All The Time.” The piece connects the importance of culture-wide continuous incremental improvement using data and analytics — what the Japanese call kaizen — to business and employees.

There should be no doubt at this point about the effectiveness of the analytic techniques pioneered by American business theorist W. Edwards Deming, which the Japanese used to become a world-class manufacturing nation. The same techniques were adopted elsewhere, eventually even in America, to produce impressive results, including lower costs and higher quality of manufacturing processes and their resultant goods.

However, Surowiecki’s article touches on another part of business that’s not often discussed, which I think is the next frontier. Front-office business processes have been a collection of random efforts for as long as anyone can recall. Our technologies — including CRM, but also social, mobile, and almost anything you can name — have been added to the mix to make spot improvements without a great deal of thought going to the bigger picture.

A Little Here, a Little There

Ironically, kaizen is all about spot improvements — but with an important difference. Surowiecki makes an interesting comparison to modern athletics, post about 1970, when athletes reduced their reliance on pure natural ability and began working to hone specific skills.

For example, weight lifting to improve strength and off-season conditioning (rare prior to about 1970) have made athletes stronger, given them greater endurance, and made them less prone to injuries, Surowiecki points out. Moreover, working on specific skills, like developing your left hand if you happen to be a right-handed basketball player, has made athletes just plain better than their peers from a scant generation ago.

All of this attention to specific skills and conditioning training has been directed to specific purposes in sports. Today, many more baseball pitchers than ever before can throw 90-mph fastballs, but their teammates also can hit better, thanks to eye and strength training. The combined result is that teams with players that excel at improving put themselves in a better position to win.

In business, not so much. Too often, we seek spot improvements and leave it at that. For example, there is a plethora of products on the market aimed at speeding up one or more aspects of selling without any thought of how that acceleration affects the overall sales process. Can shaving a few seconds on data entry really enable a sales rep to close more business? How much more?

Specific Objectives, Specific Outputs

My point, borrowed from Surowiecki, is that we need to think more about the whole process — as well as the spot improvements — to achieve the goals we set. Even as recently as a few years ago, that would have been a big ask, as there was no good way to see around the corners of most business processes. Today, though, we have big data and analytics, the missing ingredients that made kaizen possible in manufacturing.

Before manufacturers began collecting process data and analyzing it, the best we could hope for was a quality inspection regime that kept defective products off the market long enough for teams to fix the defects. That resulted in better quality, but at a terrific price for rework. Continuous improvement became possible when we stopped inspecting and began planning whole processes, down to what should happen if an unexpected event temporarily threatened product quality.

This is our state in the front office today. We have lots of potential improvements but we often lack the overarching vision of end-to-end processes that can give us the edge we need to improve overall, not just in a tiny segment. It starts with capturing customer data, and it requires data analysis with the specific purpose of improving the whole process.

The surest way to that kind of improvement is to have specific goals. In manufacturing and sports, that’s easy. You might want to make products with fewer defects at a specific price point. In sports, you might want to win more games, but that quickly breaks down to specific objectives — like more and longer possessions, or causing opponent turnovers — and specific outputs. “Scoring more touchdowns” doesn’t help anyone because it is so vague it isn’t actionable, but “improving blocking so that the average carry gains more yards” is.

In business, we need to broaden our focus on speed and include more metrics that determine how well we perform. We also need a focus on moments of truth in our interactions with customers. Understanding the customer’s perspective of what’s really important in customer-facing situations will provide a natural framework for planning and executing our continuous improvements. At this time of year, that’s a good focus to have.