Let's start with 3 very important and topical words in many sectors: process, business agility and digital transformation. We have all heard at least 2 out of 3 of them in conversation.
A process is any set of activities sequenced to obtain a specific result.
Business agility revolves around people, leadership, and company operations. Link people to more humane leadership. Through this leadership and this new mindset, a capacity for adaptation is generated in the processes, services and products with changes in the business structure to give the maximum value to the client as quickly as possible.
Digital transformation is the change associated with the application of digital technologies in all aspects of human society. This application of digital technologies usually has an impact on the processes that have been carried out by people, executed completely or partially with human intervention.
The processes are redefine in 2 aspects, one, optimizing or reducing time and the other hand the costs. This does not always imply greater value for the client, but rather greater benefit from cost reduction (direct or indirect).
In most cases, people revolve around the process, reducing time & cost to provide a value very focused on optimization. In many times you can be delivered earlier, but it does not imply greater value for customer. One solution is greater value must be generated with innovation and creativity with customer proximity and one result is we can obtain more time (the time saved) to generate new opportunities. Simply by saving money or time we do not generate new opportunities of value, only generate spaces to create these opportunities.
This approach can be called "making the process dance around people." People know the process and have to be taught to optimize and improve it, continuously, always in a system where psychological safety is present and enables the creation of "intangible" benefits (knowledge, creativity and innovation). To do this, you need to pay attention to how you work, what happens? What is generated? Why is it generated? Who participates? How do you know what to do? How is it interacting? Help lead by example, seeing and hearing what happens, to constantly implement small measures and subsequently measure their impact continuously. Leading by example comes from having courage to help others, but not by saying what they have to do, but by helping to discover what they have to do from their own example, go, see, always make small improvements and measure their impact to keep improving.
The old or traditional processes remain defined in stone in many cases, where perhaps, annually or every x years, they are reviewed to try to optimize them (reduce time / cost). In many cases, such optimization impacts people's dedication to the process, that person is replaced or discarded as a cost reduction and is not seen as a valuable opportunity for the organization. The reduction of people reports short-term benefits (immediate in costs), they are processes with a cultural model of more than 200 years ago, different context and human knowledge, than is necessary today.
An example is the restructuring in the banking sector, with large banks making layoffs to reduce costs and improve efficiency, but the great experts already say that their challenge is to attract talent in the coming years to innovate or they will be left off the hook and with a loss of irreparable credibility for your customers, BBVA Bank, Santander Bank, Caixa Bank in Spain.
Great experts from the Future Forum such as Santiago Carbó, Professor of Economic Analysis at the University of Granada and Director of Financial Studies at Funcas, Luis Colorado, Head of Digital Banking and Innovation at Santander Spain, Susana Malcorra, Dean of the IE School of Global and Public Affairs, are aware that digital tools have to be adapted to the needs of each client, to provoke a qualitative leap in the quality of life and access to services, improving the perception of the sector and helping to access banking digitization to the people at risk of exclusion due to lack of preparation in new technologies. (1)
The big mistake made is to use the process to optimize and eliminate waste. We must design the process based on the new context and the existing uncertainty in today's world, based on people and from the point of view of maximizing the value for the customer.
Believing in known solutions to known problems, when they really must be new solutions to new problems for a new context, which is to evolve from a face-to-face to a digital or online way. This is the point.
The adaptation of people based on the creation of value, with an impact in the medium - long term, maximizing the value to the client (income), by being able to train and adapt their skills (without the need to lose talent, maximizing value through creativity and innovation) is the solution and what provides greater knowledge in the organization, generating new value opportunities for the client in areas where it had not been previously contemplated (due to lack of time).
Companies such as ING-Direct, CapitalOne, Bancomer have carried out these adaptations and experiments promoting the development of skills in people based on their passion to later adapt to projects with the greatest impact on said skills developed.
Rob Alexander, Director of Information Systems of Capital One commented in 2020 how they made the migration to AWS in the US, saving by recycling tons of copper and steel, their subsequent measurement by promoted and empowered people to improve the system, thus allowing Its employees create excellent software bringing innovation to customers, attracting the best talent to the company at the same time. (2)
In this way, we avoid the extra cost of parting with talent and knowledge and subsequently incorporating new talent without that knowledge already.
For years, this has started to happen in certain companies and now it will be (or should be) much more after COVID19. A continuous and conscious change, which has come to stay and which will accelerate digitization and transformation, which should maximize the value reported to society, as a benefit, but not at any cost.
In many companies, their priority is costs and then value, for others it is value and then costs. Differentiating companies, those that we have as a reference and that we often ask ourselves, how do they do it to be at the forefront in everything? To keep the customer always satisfied? They start with the people (benefit of knowledge), then the value (benefit for the customer) and then the cost (benefit for the company).
In current times, organizations need to define or redefine and optimize their processes continuously, that the processes reflect how the work is done being aware of it, since it brings many benefits to the organization:
- Knowing where the work comes from, what type of work they request and who the clients are gives you a global vision and really brings you closer to the client's needs to offer more value.
- What information the client has to provide to request something, so as not to have stops and reprocesses due to lack of information, remember when we request something and due to little transparency we lack information to fill in that must be presented again.
There are many improvements in digital transformation, from collecting data, analyzing it, observing it and continuously improving it, but the big mistake is with the classic approach of processes and digital transformation focused on processes.
It is correctly carried out by car sharing companies such as Zity, with the Hispano-French collaboration between Ferrovial and Renault, Share Now (formerly Car2Go) with Daimler, Free2Mov (formerly eMov) with the PSA-Citroen group.
Companies like Zity, launched in 2017, expect to be profitable by the end of 2021, with all the technological investment made, despite the COVID19 to which it has adapted, generating resilience to influence nearby suppliers and companies with its aptitude (3).
In many times is a wasting time (taking longer to give value to the client), we lose the ability to adapt, increasing definition and documentation time to improve in the future, we fall into the suboptimization of the whole when thinking about the optimization and efficiency of the process and not the value to client.
One big solution is involucrate right people, from start, with end to end vision, knowlege and value for the customer.
Artificial intelligence, blockchain, machine learning will promote automatic processes, optimizing and evolving through own learning, but it must be aware that they must be designed and defined based on human knowledge, with a global vision of processes are made thinking about value and not about sub-optimization by zones.
Therefore, the process has to dance around people; to receive value they have to know how they interact, how they get involved, how they generate information, only in this way is knowledge maintained, with the consequent lower cost of training, reducing the effort to maintain and adapt, improvement ideas arise naturally with a human continuous improvement mindset.
People have to be empowered, so that in the processes that have to be automated, said people validate and verify the correct operation of said automation, seeking solutions, innovating and improving (challenging the process and themselves) continuously, in terms not only of times, if not of benefits to society with this automated process. These people become responsible for the process and its continuous improvement.
Manual or automated processes have to be at the service of humanity, for this they have to speak the same language and not the other way around, they have to dance around people, not people around the processes, why? Because Traditional processes were created to control people with little knowledge while today's times are volatile and people gain a lot of knowledge quickly to be creative and make humanity prosper. The human is the creative and not the process created by the human.
In every company there are exploitation and exploration cycles, balanced to a greater or lesser extent towards one side or the other depending on the activity of said organization.
Other companies in sectors such as the surveillance of both homes and companies have automated their processes to improve and innovate, but they have carried out reskilling and upskilling of their employees so that they control the processes, are the bosses and responsible for the continuous improvement of said processes automated for years to come, focusing on continuous innovation as Securitas Direct or Prosegur. Challenging startups to integrate with a winning solution that facilitates the processes as carried out by Prosegur with Veridas (4).
These cycles have to evolve in organizations, not only focusing on optimizing exploitation, totally legal, to obtain savings and maximize profit, but not as a conservative and short-term strategy, if not to look beyond, to obtain more exploration time, to be more creative, innovate and acquire more knowledge in the organization that allows us to generate differential value for the client in the exploration part with new opportunities not seen until that moment.
The difference in companies comes from reversing these cycles. The first strategy without relying on the second strategy (increasing the time of dedication) will drown companies, they will become dinosaurs in their sectors and they will approach extinction like them, without knowing or perceiving it, and if they decide to change it will be late because it will have been taken advantage of by those in the same sector who have opted more for the exploration of new routes, sources and have found them.
People have to be prepared for continuous improvement,
in order to improve the process, to have a greater purpose, going beyond what
they have been improving until now in a systematic way, with a mentality of
growth and continuous improvement. Do not stay in an already automated process,
challenge the process, analyze the data, exploit it, continuously improve it.
Finding their strengths and weaknesses (of processes and people) to train people, develop new skills that will enable the company in areas that had not currently been seen or imagined until then, making the organization more competitive, improving their interactions, their adaptation and their organizational culture, fostering sharing to generate, fostering embracing the error to improve, fostering the absorption of fear from above (the bosses should feel the fear of responsibility, not the employees) to free fear from the colleagues, enabling by teaching by example and not telling what to do.
In conclusion, the processes have to be reviewed based on the people who interact and generate value for the end customer. A global vision of the processes, even if it is to automate them. Adapt knowledge, to preserve it and enhance it in other areas or necessary areas, through people, where value is generated and that existing knowledge is not lost, creating new value opportunities for the organization with people reskilling. Generating such knowledge and opportunity spaces depends on the organization, taking advantage of existing talent and empowering it instead of dispensing with it. The cost of this lost or untapped knowledge is much greater than the savings generated in optimizing said process.
References:
(1) https://cincodias.elpais.com/cincodias/2021/04/21/economia/1619009524_216534.html
(2) https://aws.amazon.com/en/solutions/case-studies/capital-one/
(3) https://www.businessinsider.es/carsharing-zity-espera-ser-rentable-finales-2021-746661
https://www.tandfonline.com/doi/full/10.1080/0960085X.2021.1884009
(4) https://veridas.com/news/veridas-wins-prosegurs-comein-open-innovation-challenge/
