In the world of scalable efficiency, processes rule. Businesses around the world are well into their third decade of “business process reengineering”, massive initiatives designed to create more and more tightly integrated and standardized business processes to squeeze out the inefficiency that lurks when people don’t follow instructions to the letter. And, it’s not just companies – all of our institutions have caught the process religion, whether it’s schools, governments or even NGO’s.
But here’s a provocative proposition – perhaps processes are becoming prisons that keep us trapped in a world of diminishing returns rather than providing us with platforms to help us achieve more of our potential. And perhaps routine processes that worked so well in times of relative stability become increasingly inefficient in a world that’s characterized by increasing uncertainty and an accelerating pace of change. Maybe they’re actually becoming a barrier to performance improvement rather than a prerequisite for performance improvement.
Where do workers spend their time?
It turns out that we’re spending more and more of our time outside processes. An informal survey that I did many years ago suggests that as much as 60-70% of employee time in large, established enterprises is being spent on something called “exception handling” – an event that occurs that was not anticipated by the process and that the process policies and procedures cannot handle, so it gets handed off to an employee who has a short time (typically 24 – 48 hours) to resolve the exception. That person usually cannot do it on his or her own, so several other people need to be found and brought together quickly with relevant data and analytics to get to a resolution. Today, these activities tend to be very inefficient.
And, when we’re not handling exceptions, we’re often coming together in teams or work groups on a more sustained basis to launch some kind of new business initiative – e.g., entering a new market or seeking to expand our network of business relationships. These new initiatives are becoming more frequent because we are dealing with a world that creates unexpected opportunities and challenges. The people involved in these initiatives are rarely governed by processes and they are improvising as they go.
If we’re spending more and more of our time outside established processes, maybe we should shift our focus away from processes and focus instead on the practices that small, front line work groups use to improve their performance over time by learning faster on the job.
Learning faster to accelerate performance improvement
This notion of learning faster has been a core theme of much of my writing for years now, but I’ve encountered a lot of misunderstanding when I use the term. Many people assume that I’m talking about training programs or knowledge management systems – helping to improve access to existing knowledge within the institution. No, in a world that’s increasingly driven by exponential change, existing knowledge depreciates at an accelerating rate. The people and institutions that will be most successful in this new world are those who learn faster by creating new knowledge through action – coming up with new ways of doing things that can increase impact.
This kind of knowledge is often not explicit knowledge that can be written down and disseminated to others. Instead, it’s tacit knowledge that’s in our heads and even our bodies (think of muscle memory required to ride a bicycle). We have a hard time articulating this tacit knowledge to ourselves, much less to anyone else. It’s embedded in our practices and hard to understand unless we are deeply embedded in a specific context with the individuals engaged in these practices, often as part of a small workgroup.
So, here’s a question:
What are the specific practices that can help small, front-line workgroups to learn faster – to evolve their practices more rapidly to generate accelerating performance improvement?
These are meta-practices, if you will – practices that specifically help to create new insight into how to act in new ways to improve the impact of the workgroup in terms of performance that matters to the institution.
The assumptions behind the question
There are a lot of assumptions embedded in this question. For example, it focuses on small workgroups rather than individuals or departments. It assumes that these workgroups will be the most fertile setting for learning faster – far better than an individual sitting alone in an office or a larger department that doesn’t have a rich enough understanding of the context that these small workgroups are operating in. Also, these small workgroups often include participants that span across multiple departments. Increasingly, these small workgroups also include one or more participants from other institutions as we seek to tap into the practices that others outside our organization can bring to bear on a particular challenge or opportunity.
The question also focuses on front-line workgroups rather than the workgroups that operate at many levels of an organization. The assumption here is that the most meaningful performance of institutions will ultimately be driven by practices on the front-line – dealing with customers or suppliers, for example, or working on the assembly line of a factory or in the engine room of a cargo ship. The front-line is often where the unexpected problems or opportunities first appear and where the practices that could have the greatest impact in addressing these unforeseen situations will be first crafted. Here’s an interesting observation: the more uncertain and volatile our world becomes, the more important the front-line becomes – that’s where the action will be.
In line with my earlier comments, the question emphasizes practices because the assumption is that these are the most effective way to respond to unforeseen and new situations. But, practices present challenges. They tend to be highly context specific, so a key challenge will be to see if we can generalize about practices at least a high level that seem to relevant across many diverse contexts. Practices tend not to be explicitly defined – they emerge and evolve depending on the context. They have to do with how we perceive that context, how we think about it, and how we act in it, often in ways that we couldn't even make explicit to ourselves, much less to anyone else. For example, one set of practices involves how we can more quickly make sense of a new context that we’ve never seen before so that we can act in a way that has more impact.
There’s an issue of how far we can go in making these practices explicit so that they can be communicated to others. We have an instinct that the most effective way to understand practices is by becoming embedded in the context – it’s why apprenticeship models tend to be so effective in building capability in a practice.
The question also refers to accelerating performance improvement, not just one time performance improvement. This assumes that one-time performance improvement is no longer adequate. What we need in a world driven by exponential change are practices that will help us to accelerate performance improvement – getting better faster over time. One time or even linear performance improvement will become less and less adequate and the winners will be those who can move beyond that and find ways to unleash a trajectory of accelerating performance improvement.
There’s been a lot of work done to understand the practices pursued by high performing front-line workgroups but, to my knowledge, very little if any work has explicitly focused on the question as framed above. Yes, a workgroup may be high performing today, but what’s the trajectory of performance improvement and what are the specific practices that contribute to accelerating performance improvement?
Our next wave of research
This is going to be the focus of our next wave of research at the Deloitte Center for the Edge. We’re going to be bold and suggest that “business process redesign” will actually lead to diminishing returns. In its place, we suspect that the most successful institutions of the future will be the ones that focus on “business practice redesign” – seeking to cultivate the practices specifically designed to accelerate performance improvement and learning on the front-line. We expect that this will be a key factor in helping our existing institutions transform themselves as they seek to move from scalable efficiency to scalable learning. It may in fact turn out that the only way to operate efficiently in the Big Shift will be to focus relentlessly on scalable learning.
A call for help
I’m using this blog post to reach out to ask for help on three fronts:
- Does the question as framed above make sense and are we in fact making the right assumptions in framing the question as we did?
- Has anyone else done work on this question or one like it? What research could we access to learn more about what might have already been discovered on this front?
- Do you know of any front-line work groups that have demonstrated accelerating performance improvement over a reasonable period of time? We’d like to find some workgroups that we can study to begin to identify the practices that seem to be specifically contributing to accelerating performance improvement.
We need all the help we can get. As usual, we’re venturing out on an edge that we don’t think has been explored, but that could yield great insight into how we can accelerate performance improvement in a world of mounting performance pressure. In doing so, we’re venturing beyond our comfort zone, but isn’t that where all the growth and insight occurs? We'd welcome others to join us on this exploration and help us with the questions that I’ve framed above. Who knows? As we move from a relentless focus on process to a more nuanced exploration of practices, we might actually change the world.