Thinking Lean? Think Social Business

Lean production at Toyota. Source: www.toyota-forklifts.ch

Lean production at Toyota. Source: http://www.toyota-forklifts.ch

For my money, Lean Thinking is one of, if not the most influential management philosophy of the last sixty years.

Ever since the 1950s, businesses large and small, from manufacturers to service providers, have been investing in the tools and techniques that have become known as “Lean” to boost profits and efficiency.

Toyota is the most famous exponent and the company where much of the practice began, but there are plenty of other examples of organisations that have benefitted across the public and private sectors.

To a greater or lesser extent, Lean has probably influenced every organisation active today.

Social Business, by comparison, is still in its infancy.

Many businesses still assume it means a Facebook or Twitter strategy and are dubious about how  “social” can be of benefit to them, beyond a channel for marketing promotion.

But I would argue that any team of managers applying Lean Thinking today needs to consider Social Business as an essential part of their strategy if they’re to get the maximum value from their investments and truly gain competitive advantage.

How are the two related?

Let’s look first at how they’re defined:

Lean: “The creation of more value for customers with fewer resources. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste.” (taken from http://www.lean.org)

Social Business: “The culture and systems that encourage networks of people to create business value.” (IBM)

Culture, people and value: there’s some clear correlation.

As Social Business is often mistakenly defined by social media platforms, so Lean is also often misunderstood as a set of tools and processes.

In fact it’s a philosophy designed to focus organisations on how they can deliver more value to customers by meeting demand instantaneously with ‘perfect’ quality and zero waste.

To do this means creating a culture of continuous improvement involving everyone at every level – as well as partners and suppliers too.

Foundational to Lean is a focus on the customer and an understanding of their needs so that customer demand can “pull” products and services through the production process.

Based on this definition it’s clear that one ingredient is essential for successful Lean transformation – good communication.

Managers need to be active and involved in the change process and visible and accessible to the wider workforce, which in turn must be well connected to ensure that the organisation can respond swiftly and smoothly to customer demand.

It’s here that Social Business transformation has a vital role to play.

By encouraging the culture and establishing the processes and technologies to enable more networked and flexible communication and collaboration, organisations can equip themselves with the means to successfully practice Lean.

In effect, organisations can apply Social Business methodologies to empower their workforces – another essential aspect of Lean.

It’s only by empowering people to take decisions and make changes that the proactive, incremental improvements can be achieved which Lean identifies to create better organisations.

In practice this means giving people the means to make their voices heard: to express ideas, make recommendations, share their achievements and gain feedback and recognition.

Again, the application of Social Business practices makes this possible.

A great example is the recent work by IBM (my employer) with Tesco, where by putting in place an internal collaboration platform and new working practices, colleagues across the organisation can communicate in a much more fluid way and be freer to focus on the customer than on navigating the structures of the organisation to get their ideas heard:

The business landscape has changed tremendously since Lean first came on the scene, but today I believe it’s more valuable than ever.

Business has become more networked, sophisticated and complex, driven to a large extent by technology.

This creates more potential for waste – whether in people’s time or materials – and that’s bad for the organisation and for its customers.

I’ve argued before that every business is a Social Business because the act of business itself is inherently social; an “Unsocial” business would have a hard time recruiting employees and forming partnerships with suppliers and distributors …let alone attracting any customers!

The difference is that now we have the technology, processes and expertise to enrich that innate sociability, encourage it and enable it to deliver benefits to the organisation and the people it serves.

So adopting Social Business shouldn’t necessarily be considered as the radical change it’s often portrayed.

Rather, it’s a natural extension of the practices they’re already applying today.

Innovation in partnerships

 

"The emergency exits are here, here and here." Airbnb and KLM

“The emergency exits are here, here and here.” Airbnb partners with KLM at Schipol Airport

When we think about innovation it tends to be in the context of devising new products and services.

Innovation can take lots of different forms though, and one of the most effective ways a company can innovate is through partnerships.

Recently, IBM (my employer) announced a partnership with Twitter that will enable both companies to offer more insight and analytics services to enterprises.

With over a century of history, IBM is one of the most established firms in the technology industry.

Twitter is a new player by comparison, with very different origins and heritage, but the contrasts between the two firms make for an exciting and fresh combination and promise something new for businesses.

The day before the IBM – Twitter announcement, PwC announced a partnership with Google.

For Google, the intention appears to be to build the credibility of its Apps for Work platform amongst enterprises, while PwC will benefit from the opportunity to provide implementation consultancy services.

In combination the two companies can enhance their existing propositions and take them to new markets in new ways.

In a different industry – retail this time – GE has partnered with Quirky to develop a range of devices for the “connected home”.

The partnership makes sense for GE given its portfolio of domestic products and brands, and strategic drive to build its digital proposition.

Quirky meanwhile can benefit from the resources and opportunities to develop product that integrate with existing home devices that a relationship with GE can offer.

Probably the most eye-catching example of an innovative partnership I’ve spotted over the past fortnight is KLM Royal Dutch Airlines’ partnership with Airbnb to convert an airplane into a temporary hotel.

OK, this one feels a bit more like a promotional stunt than a strategic partnership, but nevertheless, it illustrates the creative possibilities that can emerge when two brands work together.

And if I ever find myself with a stopover at Schipol Airport, you never know, I might consider checking-in.

Redistributed future: the IBM and Twitter partnership

IBM-twitter

“The future is already here. It’s just not evenly distributed yet”

I get reminded of this quote from William Gibson all the time.

Almost everyday I’ll spot a situation where applying a technology that’s already available could make a difference, but the practicalities of cost, expertise or the logistics of making it happen mean the problem and the solution aren’t able to connect yet.

In business, the partnership announcement by IBM and Twitter yesterday brought those two things closer together.

Twitter is an invaluable source of insight for businesses of all shapes and sizes into market trends; what their customers think of them today – and are likely to think tomorrow – and a valuable early warning system to spot potential issues on the horizon.

Most businesses I encounter have some form of Twitter listening system in place; it helps them tailor their products to better suit customers, deliver greater value and be more successful as a result.

But they also use lots of sources of data to aid decision-making and a major challenge is integrating them – from market research material held in a structured database, to the unstructured conversation content that can be harvested from Twitter and other social platforms.

Twitter’s relationship with IBM means the two can be integrated, which is good news for businesses and I believe good news for customers too.

For business, it means better insight which can lead to new business models; attract and retain customers; transform processes and improve risk management.

And for consumers it means value, because if the businesses isn’t firmly focused on understanding its customers and the market environment to deliver value, then it will have a rocky ride indeed – no matter how good its data and analytics platforms might be.

Earlier this year Twitter acquired Gnip and now it’s partnering with IBM. I predict there’ll be more partnerships and alliances like this to come across the technology sector.

And bit by bit, the future gets redistributed.

Update (1 November 2014): I’ve just discovered that Google and PwC has announced a partnership, offering clients a combination of Google technologies and PwC consulting services. It will be exciting to see how these relationships play out in practice.

Service, motivation and collaboration

The other day my wife was out shopping with our three year-old daughter and popped into our local high street  branch of a large national grocer retailer.

When she came to pay, she noticed that alongside the usual array of sweets and chocolate bars by the checkouts, was quite an extensive range of painkillers and other medicines.

All over-the-counter products, but all on display at the perfect height for a three year-old to mess with.

Now, anyone who’s been shopping with a young child knows what it’s like: the moment you take your eyes off them they’ve either disappeared off down the aisles or they’ve levered open a jar of something-or-other for quick snack.

And when the time comes to pay and you’re distracted trying to find your loyalty card, dig out the right cash, or key in your pin number, that’s the perfect time for them to get up to mischief.

All this considered my wife thought stocking medicines so low down in a part of the story where young children could get their hands on them was a dubious idea.

So she decided to raise it with one of the store staff.

The response she got was a blank face, a shrug and “it comes down from Head Office.”

She mentioned it to a couple of her friends with children the same age and they’d noticed the same thing.

So when she next visited the store she asked to speak to the manager.

The response she got this time was pretty much the same as before: a shrug and “well, yeah, it comes down from Head Office, so that’s where we have to display them.”

I’m paraphrasing, but you get the idea.

To be clear, my wife wasn’t expecting the store to remove the products from sale or change its stock lay out there and then.

All she wanted was to know that her comment was being taken seriously and would be followed-up with some kind of response.

I’ve not named the shop in this case because I think it would be unfair to and, call me cynical, but I suspect that you could walk into one of a number of large store chains and have a similar experience.

Some of the most successful and truly innovative grocery retailers in the world are borne out of the UK, leading the way in everything from supply and logistics to customer insight and intelligence.

But as they’ve grown – as with any business – the lines of communication within the organisation have been stretched and the ability of the people at the front line of customer service to deliver on the promise of the brand, weakened.

They feel distant from the heart of the organisation and somewhat disconnected from the brand.

I suspect some of this was at play in my wife’s experience.

I could say that the answer is technology, and to some extent it is – collaboration platforms can allow workers to connect with the wider business, be recognised and rewarded, and appreciate that their actions and contributions make a difference.

But arguably more important is the cultural and structural change that encourage workers to adopt new behaviours and recognise the possibilities in doing so.

In their management classic, “In Search of Excellence”, Tom Peters and Robert Waterman note that change happens when “one or more persons engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality”.

The reciprocal benefits of collaboration. People at all levels brought closer together and distances reduced.

The retail environment is increasingly competitive and customer service is a key differentiator for brands wanting to build competitive advantage.

From internal collaboration to external customer engagement – and systems that bridge the two – there’s some truly exciting work taking place across all kinds of businesses.

I look forward to seeing more of it coming to fruition in store – for my benefit and for the guys on the shop floor.

Art and media innovation

Water lillies by Claude Monet. National Gallery, London

Water lillies by Claude Monet. National Gallery, London

 

When I started at Edelman, I was lucky enough to be based just around the corner from the National Gallery in London.

Sometimes, when I needed to clear my head, I’d take a wander down there to find some inspiration.

I never had the luxury of enough time to roam the halls for too long, so I’d usually pick a picture, sit down and focus on it for a while.

I suppose it was a kind of ‘creative meditation’.

But it worked, and more often than not I’d go back to the office feeling fresher and reinvigorated.

The ‘restorative power of art’ in action.

Only a few weeks ago the National Gallery changed its policy on photography.

Now visitors are free to snap any work anywhere in the Gallery, as long as they don’t use flash; it tends to bug other visitors.

The Gallery team talked about their experiences so far at a Social Media Week event they hosted a couple of weeks ago.

So far the new policy has proved to be a success, both in helping people get more out of their Gallery visits and raising the profile of the artworks through online sharing.

After the Social Media Week presentation I took a proper tour round and saw lots of people on cameras, phones and tablets snapping away.

They were all still taking time to appreciate the paintings and the new policy didn’t seem to be disturbing the flow of people through the halls.

The art is strong enough to speak for itself and command direct attention.

But walking round the Gallery made me realise the tremendous amount of media innovation on display and the power of visual storytelling.

Particularly the earlier works on display – painted at a time when literacy levels in Europe were low and access to media rare for those outside the elite classes – really show how choosing a simple subject, captured with plenty of nuance, can captivate an audience.

As technique developed in perspective, light, colour, texture and so on, you also see how painters adapted to heighten the impact of their work.

This week, North Korea has been in the news a great deal due to the conspicuous absence of Kim Jong-un from public life.

A bit of an odd link back to my tour of the National Gallery, but it reminded me that this is one of my favourite ever infographics:

Korea at night. From www.globalsecurity.org

Korea at night. From http://www.globalsecurity.org

It’s a photograph of the Korean peninsula taken at night from space.

Like the paintings in the National Gallery, it’s a simple, powerful subject that tells a million stories about the states of North and South Korea in a single image.

While I was in the Gallery I tried to get a snap of someone photographing a picture; it was tricky to do and I probably looked a bit like a stalker attempting it, so I gave up.

So instead, you’ve got some Water lillies.

MBA lessons #1

Back in January I promised to publish some regular posts about progress on my MBA in the hope that they would be useful for other potential students.

It’s now September and so far I haven’t published a thing, but I make no apologies.

The course is demanding and to do well and get the most value from the learning experience takes a significant time commitment.

So in the competition between study, work and family time this post has sadly been the loser until now, but hopefully I can make amends with some reflections on the first nine months.

So far I’ve completed modules on accounting, economics, organisational behaviour, and I’m now studying operations management, marketing and statistical modelling and analysis.

The curriculum is broad, but it also goes into quite some depth on each topic, so the learning experience is comprehensive. As you would expect in a business qualification though, there is an emphasis on developing the ability to apply the knowledge gained in a professional context, with plenty of academic rigour thrown in which you can read about below.

The experience has ranged from frustrating, difficult and stressful, to thought-provoking, stimulating and plain good fun. Overall however it’s been a hugely rewarding experience so far, and long may that continue.

Here are a few things I’ve learned so far:

1. Plan your time: Whether you’re studying full-time or part-time, the work schedule can be extremely demanding. Especially, for part-time students like me who are trying to balance study with a full-time job, falling behind is easy to do and when that happens it can be difficult to catch-up. The way to avoid this happening is to begin the course with a really clear time planner that enables you to plan your study schedule for the semester ahead. I’ve seen these break the workload down week-by-week and even day-by-day, depending on the student’s situation and working style. It can also be worthwhile to specify when you will make time for lesson reading and note-taking, and when you’ll attempt tasks and exercises as it’s when you actually apply the material that the learning really sinks in.

2. Keep practicing: Whether you’re being assessed by exam or coursework, completing practice exercises as you work through the course makes a big difference to the quality of your learning. The benefits in an exam situation are pretty obvious: you’ll be able to recall information, apply concepts and construct a comprehensive, logical answer much more quickly if you’ve had plenty of practice. When it comes to writing coursework, if you’ve already had experience applying the concepts you’re being asked to demonstrate in a lesson exercise, you’ll find applying them in the final assignment comes much more naturally. Crucially, you’ll also be more adept and linking different topics together, giving you a much more sophisticated grasp of the topic as a result.

3. Develop your style: The MBA course aims to give skills and knowledge you can apply in a professional context. Nevertheless, it’s an academic qualification and so the assignments you produce need to demonstrate the appropriate level of academic rigour to succeed. This means not only sharpening your skills of analysis and interpretation to determine the best business recommendation to make on a problem you’ve been set, but also justifying your recommendations with solid academic research, theory and evidence, and thinking broadly and reflectively about the problems posed to you so you can arrive at a truly nuanced answer. If you’re studying a topic in which you have some direct professional experience, it’s easy to forget the second part of this. Years of experience in a particular field mean that often we instinctively ‘know’ the right answer, but we forget how to set out our justification. It’s this skill an academic course forces you to reawaken.

4. Don’t get spooked: Particularly on part-time programmes with an emphasis on self-study, it’s easy to get spooked by the progress of others in your cohort. While you might be feeling satisfied one minute that you’ve completed Lesson 4 of Accounting, the next you’re in a state of dismay when you discover a fellow student is up to Lesson 8! As I quickly discovered, everyone has their own individual style of learning and works at a different pace. Some people like to study several topics simultaneously, others prefer to take a more sequential approach. Some prefer to complete the reading for an entire topic before attempting practice questions, while others like to blend the two. It’s your course and you need to work at a pace and in a style that’s right for you. Time planning, once again, is important here, but so too is reflecting on how you learn and focussing on the techniques that will get you the skills and knowledge you’re looking to gain.

There are plenty more lessons I’ve learned from the past nine months and no doubt many more to come.

As I begin to focus my mind on the end-of-semester exams happening in December, I’ll share some further thoughts  on my experiences so far.

If you’re thinking of embarking on an MBA and you have any questions, then please do let me know and I’ll think about how to cover them in my next post.

Cut outs #8

Lots of data and research today.

According to eMarketer it’s the simple things that matter for Smartphone buyers in the UK.

Meanwhile, in the US mobile video continues to rise, particularly amongst younger audiences.

Looking beyond mobile, a study by Leader Networks suggests there is confusion between social media marketing and social business. I don’t know the basis of the study, but I can believe this is the case.

And finally, I always find a great way to develop an idea or to encourage myself to think more creatively about a problem I’m trying to solve is to visualise it.

Grant Snider at Incidental Comics has written a comic about where ideas come from.

I think it has a simple, inventive, visual style that gives it great impact.

And most of all, makes it memorable.