We are living in an era of continuous change and major disruptions. If, in the 1980s, we defined the general context using the acronym V.U.C.A. Largely as a result of the strained relations between the world’s major powers –characterised as volatile, uncertain, complex and ambiguous– it now seems clear that this approach is no longer adequate for describing the world in which we live.
In the current context we have many more elements that contribute to unprecedented levels of uncertainty that, combined together, keep us on the brink of chaos in many aspects of our lives. It is for all these reasons that there is a broad consensus on describing the world today using the acronym B.A.N.I.: a new model adapted to the context of globalisation and climate change, which is gradually being implemented and will reach maturity in 2020. This model characterised by fragility (Brittle), anxiety (Anxious), non-linearity (Non-linear) and incomprehensibility (Incomprehensible) describes, sometimes overwhelmingly, the context which we live in.
In the 21st century it is as necessary for leaders and organisations to learn new knowledge as it is to unlearn knowledge which is no longer valid.
Lean, Agile and Disruptive Innovation
In recent years, many institutions from different sectors have seen continuous improvement as the solution that will lead them to become an efficient and effective organisation in all their processes. In a way, the BANI context has encouraged many managers to look towards the future, including in this group for the first time those who so far have been operating in a quiet millpond.
In order to carry out this cultural change that would allow them to face the future with guarantees of success, many of these organisations have based their implementation on widely proven work models such as Lean, Agile or, on occasions, they have worked on the search for Disruptive Innovation that would provide new solutions. Unfortunately, the selection of a single model as a reference for their transformation is a mistake that, far from providing greater competitiveness to face the future, can lead to a rigid corset that hinders their ability to adapt to the market’s needs.
The basic mistake that these organisations make is that they believe that the model they should go for should be based on only one of these frameworks and that, once they have selected one or the other model, they should proceed to implement all the artefacts and routines that go with it (thinking that with this approach they will achieve the results that others like Toyota or Google are achieving). This is not the case at all. In fact, you cannot find an organisation in the world that achieves excellent results in a sustainable way over time that uses only “lean” models, routines or tools, or one which uses only “agile” models.
Organisations have an obligation to define their own framework according to their particular needs, combining what best adapts to their needs from each of these models in order to achieve high performance.
- Six Sigma: robust processes. Six Sigma Six Sigma is a method born with the goal of reducing process variability in a systematic way. The successes achieved at Motorola and General Electric catapulted its popularity during the 1990s, although the technical complexity and statistical basis needed for its application have slowed its expansion. Essentially, the model aims to eliminate process variability and with this approach, achieve robust processes and zero-defect products.
- Lean: efficiency. The most widespread continuous improvement model is “lean”. It is based on the Toyota production system, a working culture with a history of more than 70 years. Over this time, continuous improvement has spread from the world of operations to services and even project management. Essentially, the model aims to eliminate anything which does not add any value to the client and, with this approach, increase process efficiency by taking advantage of the contributions from all the company staff.
- Agile: effectiveness. While in the case of “lean” we can say that it was already a work culture from its origins and that improvement methodologies were a natural consequence of this obsession with eliminating waste, in the case of Agile it is exactly the opposite. We can say that Agile was born as the agreement of a group of experts who, individually, had developed methodologies for the software project development. This agreement described in the Agile Manifesto in 2001 was the basis for the model to begin to develop as a global framework that transcended the operations of the systems area. Instead of the traditional sequential system, Agile proposes an incremental, faster and more flexible development model which allows a first result to be placed in the client’s hands from the initial phases. Agile approaches have expanded beyond the realm of product development and companies are increasingly organising themselves to achieve agility in all their activities.
- Disruptive innovation: new solutions. Disruptive innovation is a model which aims to develop new working or new business models. Unlike the previous models, in this case it must be developed outside the current organisation, creating a safe space in which a system that may initially be seen as a threat has options to progress.
Hybrid organisation
Although in all cases these models ultimately aim to deliver value to the client or user, a common misconception is that “lean”, agile and disruptive innovation are mutually exclusive because they are based on fundamentally different principles and approaches and apply to very different types of activities.
In many cases “lean” is assumed to be for routine and repeatable operations, while agility only applies to creative projects or tasks and disruptive innovation in cases where the current paradigm is to be changed. Therefore, organisations, departments or functions must choose one and focus exclusively on it.
However, this argument reflects an essential misunderstanding: don’t we have in every organisation some processes or activities which are repeatable in nature, others which have a more innovative component and others which are clearly disruptive? Depending on the variability or uncertainty of our processes, the “recipe” we apply will need to have a touch more related to Agile, Lean, Six Sigma or Innovation.
Translating this theory into practice and using it to one’s own advantage is not so easy. People are terrified of any possibility of error and we avoid the intrinsic risk of the unknown whenever possible. This is why, for the whole “moonshot” model to become a fact, it is necessary to learn fast: when setting an ambitious goal, it is necessary to identify those points which are critical to success and those which entail high levels of uncertainty.
Once those points that can be considered critical have been identified, we must establish a process of continuous experimentation which allows us to work on these aspects, detecting errors before disbursing huge amounts of money on initiatives whose future is limited.
To reinforce this concept of hybrid organisation, we must not forget that, setting aside the specific characteristics of each model, they all share a broad foundation of common elements: team autonomy, frequent monitoring of indicators, continuous experimentation, data-driven decision-making, a constant focus on customer satisfaction… these are, in every case, common elements that underpin these systems.
For all these reasons, operational excellence cannot often be achieved solely through a model implemented dogmatically across the entire organisation; instead, it will be achieved through a tailored combination, applying the approach that best suits the needs of each area, process or team within the organisation.
If you want to design the system your organisation needs, we can help you. We will be happy to guide you through this transformation.
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