Tag Archives: built to last

Airlines Offer Excellent Example Of Importance Of Business Process

I’ve picked on them before and I am going to do it again. It’s just too easy. From time to time, I have to fly American Airlines and every time, my experience is abysmal. This past Sunday was no exception.  Flying out to a national healthcare conference, leaving from Southern California to arrive (with any luck) in Texas was a hopeful and optimistic experiment. Sadly, my worst fears were realized. My worst case scenario, it happens, plays itself out on a large scale for this company with great regularity. They have earned this Dunce Cap.

How Does Southwest Do It? What Makes Them So Good???

USA Today reported (Monday April 6, 2009) that most airlines performed better in the past 12 months. Consumer complaints to the Department of Transportation were down approximately 20%. Southwest Airlines had the very best performance based on consumer complaints with only 0.25 complaints per 100,000 passengers. One important measure – delays – showed, however, that American Airlines had the worst performance among 17 airlines measured with only 69.8% of flights on time.

What Role Do Employees Play?

American Airlines, in a related story, is unable to conduct talks with its unions. No agreements in the past year. USA Today reports that American Airlines’ pilots union has said its members will disrupt (delay) flights to pressure the company until they get a contract. Their bag handlers and mechanics have launched an ad campaign ridiculing American Airlines executive bonuses! Their own VP of HR states: “No one in the industry believes airlines are in a position of financial strength.” What is going on here?!

If you’re not in a position of financial strength, American Airlines, don’t pay out executive bonuses so obscene that your bag handlers(!) are provoked to run ads nationally. If you’re scoring lowest in terms of flight times, negotiate new contracts with your pilots (AA is the only airline NOT to have done so since 9/11).

Bringing all of this back around to the personal level, my flight out was delayed by 90 minutes on the tarmac at the gate. Why? “Ladies and gentlemen, we’re delayed because the crew landing this plane on the previous flight noticed a mechanical problem so we’re waiting for a mechanic and can’t find one.” They knew about the issue BEFORE loading us into the plane, had no mechanic in sight and boarded us anyway. My flight to Dallas ended with 30 minutes on the tarmac while they waited for an open gate. Arriving at my final destination (2 hours late) we waited at the gate 30 more minutes while they tried to find (!) someone who could open the door(!) and hook us up to the jet-way. No crew to be found for literally 30 minutes. This is a mockery of the way a business should be run. Is it any wonder the lead story in USA Today the following morning blasted this joke of an airline? I think not.

What does this have to do with you?

If you run a business or operational area and have anything to learn from this series of blunders, by all means, please apply the lessons. Lessons learned include:

  1. Apply BPM to produce superior customer experience
  2. Be on time – eliminate time wasting steps and take a “zero tolerance” stance
  3. Score high in consumer ratings
  4. Get good press
  5. Perform well and pay people appropriately
  6. Learn from your competitor – especially when it’s Southwest Airlines (King of Process Innovation among airlines)
  7. If a product needs mechanical work, take care of it before involving your customer
  8. If you suck, make sure you make amends with your customers
  9. Don’t pay big bonuses if your performance is in the toilet

Seriously folks, apply what you learn from others’ mistakes. Bring those lessons into your shop and apply them before you become your own achilles heel.

Advertisements

BPM Requires Will & Leadership: Part 2 – The Solution

The Solution: Leadership and Management for the 21st Century

I am suggesting a rather radical approach to the process re-engineering required to pull ourselves and our organizations out of the pits and back into the game. Frankly, it begins with leadership. We have to be led out of the dark places we now inhabit. The problem with leadership is that it is – in business, non-profits and government – totally antithetical to our political system and philosophy. Our democracy is in much better shape than our economy so perhaps there is a lesson in there for us.

Identifying and Appointing Our Leaders

Our business leaders are very rarely elected by virtue of their competence and performance. More often, they are; dictatorships (sole proprietors); family-owned monarchies where the crown is passed to heirs; pseudo meritocracies where high performers are imported by the board from outside the company; or corrupt, criminal gangs that promote the most manipulative con-men from among executive ranks only. I hate to be so cynical but make a list of the organizations you know who hold elections for executive post and share with us. I dare you!

The democratic process is our most cherished accomplishment yet we fail to recognize the irony of its absence in business leadership.

Gary Hamel challenges us in the current issue of Harvard Business Review (February, 2009) to acknowledge and develop 25 modern management practices. It’s a brilliant proposal. Most of the 25 have direct and immediate implications for the future of BPM so I urge you to read the article. Here’s my brief summary for your consideration:

  • Promote interdependence by encouraging the formation of smaller business units that participate in multiple internal as well as external networks
  • Reinvent management at the individual level and provide everyone the data they need (within their small business units) to know how they are performing in real time. Transparency will ensure that only the strong survive. There will be no hiding from the truth when you leverage information.
  • Recast the organization as a social system where leaders are social architects who provide everyone the time, space and resources to collaborate and innovate.
  • Celebrate and harness divergence of ideas and diversity of tactics.
  • Minimize the tendency to recede to the way things have always been done. Recessions are born out of retrenching.
  • Innovation and invention will provide for the variety, selection and deployment required for evolution.
  • Spread the responsibility for strategy and direction throughout the hive, herd or flock. “Buy-in” is a notion that involves a sales job. Aim for participation instead.
  • Democratize information. When leaders hoard information, they are feared instead of trusted.
  • Enable the revolutionaries and measure the number of new ideas people bring to the table. Find your renegades.
  • Promote experimentation and accept small, failed pilots as proof that people are trying to find a new and better way to make your widgets.
  • Include people of all ranks in the engineering of the work they do. Defining one’s work incites a deep sense of ownership and passion.
  • Retrain leaders and managers so they can acquire the tools and practice management in complex ecosystems.

Time For Serious Strategic Planning, Widening Process Improvement & Balanced Scorecard

If there was ever a time to call your executive and leadership teams together for some mission-critical thinking, this is that time. I am slightly biased toward making those process-oriented meetings but that’s besides the point. The market – globally, nationally, locally as well as from a unique, individual consumer standpoint – is taking a beating. A mugging really. The capital we thought we had to conduct business with is not there the way we thought it was months ago when all we feared was a recession. With recession eclipsed by fears of a deeper, longer meltdown, it’s time to think and talk about survival of the fittest.

Who’s Fittest?

How is fitness defined in your industry? We know stock price alone isn’t the answer. If that were the case, nobody would be considered fit today. Is it profitability? Productivity? Innovation? Customer satisfaction? How is the strongest competitor in your field or in your market deemed the strongest? How long can they sustain in a down economy?

You must be able to define fitness and bear in mind that definition will vary from one industry to another. What makes a great hospital does not make a great publication or a great restaurant or a great garment factory.

There is an argument to be made for reading Colins’ Built to Last before the end of the month. Preserve the core and change the tactics and process as it is called for in order to adapt to this new environment.

Build On Core Competencies & Core Processes That Work

Want to widen your process-orientation? Want to document, design and implement more efficiency, productivity and innovation? Start by pinning down and understanding what you do best. Start by identifying what your core competencies are and deeply understanding what makes them so. Take an inventory of what it is you do best and how it is that came to pass. Do not change a thing in these areas right now if you can help it – except to do more if you can.

Is there some aspect of your core competencies that can be expanded to other areas of your work, product-line or service? Can you become the outsource provider of these services to another firm? To a competitor? Can you market and promote your core competencies in new ways? Can you take them into new markets and embed what you do in an entirely new supply-chain? The point is to identify what you have 100% confidence in and do as much of it as possible during tough times. This is your greatest survival tactic. Don’t under-estimate your need to survive right now. Read Zook’s Profit from the Core before the end of the month while you’re at it.

Balancing Your Scorecard

As I mentioned earlier in this post, you must begin identifying your most meaningful performance metrics. Collectively, we do an abysmal job of this. We rely too much on financial measures or quality measures or employee satisfaction measures or none at all. Too often, we measure one dimension of our business at the exclusion of others. If you haven’t already done so, pick up Niven’s Balanced Scorecard. The implementation of a balanced set of metrics can be relatively straightforward and will do wonders for you if you can stick to it.

Do yourself and your organization a favor this week and make a commitment to measuring at least one  from each of the four dimensions of: customer satisfaction; financial performance; internal process improvement; and employee growth. If you make this commitment today while times are tough and while your employees are looking to your for leadership, then you will instill in them an abiding belief in your ability to see and appreciate the big picture. You will also be setting in motion the machinery that will set you far apart – so far as to be in a different league  – from your competitors when the dust of this economy settles. You will thrive.

Do These Things

Leverage your process improvements, your new skills and your deep desire to outlast the bad news of late. Bring your people together. Have frank and hard-working sessions together. Plan like professionals. Work more and work smarter. Apply your process-orientation as widely as possible and make a commitment to measuring what matters. Then what matters will get done in some surprising ways and you’ll be glad you made these commitments 1, 2 and 3 years from now – long after your competition has thrown in the towel.

Make The Tough Decisions

As you plan, apply yourselves to the core of your business, and begin measuring your performance in new ways, I assure you that weaknesses will become apparent. You will certainly be faced with difficult decisions to make. Resist the impulse of simply making deep cuts. If you manage to discover you have resources at your disposal, think of them as an investment before you think of them as a savings. This may, in fact, be the best time in your industry to provide exceptional customer service or it may be best to expand into a new market. The very people you may have otherwise shed may be the best people to take you in a new direction. Lead outside the box. If you do have people to let go of and you cannot justify any other conclusion, make the decision, be compassionate about it and help everyone through the transition. By all means, keep your high performers who “get” your vision and mission.

Build Business Process To Last Or Not?

Reading Jim Collins’ Built to Last reminds the reader that great companies (and non-profit organizations) are built around a core of immutable ideology. Yet he is clear in telling us that the same great companies were able to (if not internally-motivated to) constantly improve their processes and procedures. In the name of market development, customer service and innovation, change is embraced by the greatest companies. I love it and couldn’t agree more. However, in the move toward automating basic services such as those found in service and manufacturing sectors, are we losing the capacity for “on-the-fly” process innovation and improvement?

“The System Won’t Let Me”

Have you called a customer service center like that of Bank of America or been to a store like JC Penny and asked someone a simple question or asked them to perform a basic task only to hear: “The system won’t let me?” As a customer, how do you feel? Imagine working somewhere where you have to say things like: “I know that’s a great idea but I can’t do it. The system won’t let me.” My fear is that workflow and business process analysis gives us the tools and methods to improve quality, speed and service yet too much emphasis on automation will force more hard-coding of processes that can fall out of favor very quickly. Keep the method and stay flexible on the application side. If your IT bench isn’t very deep and modifications take too long, your beloved workflow and process-turned-user-interface may come back to haunt you later.

Don’t Automate It All

Leave room in your process, training and performance appraisal systems for employee ingenuity, grace, imagination and stellar service. Collins reminds us of the Nordstrom fanatical service standards. Employees are rewarded for delivering purchases to customers’ hotel rooms! He reminds us how it is that Mariott originally evolved from 9 small restaurants to a global food distributor and hotel chain by first packing lunch boxes for the passengers of a local airline despite the fact that it wasn’t in their strategic plan. If we remain too rigid in our standards and too dedicated to our plans (a la Project Management), we lose the opportunity to act in positive and rewarding ways when the moment calls for it. Evolution consists of golden moments when variation from the norm produces very good results!

Seize The Moment – Keep The Core, Change The Process

It may sound like a radical departure from standards and requirements, rules and workflow, however inspiring your brilliant people to make recommendations and pursue the greatest outcome when the need arises is absolutely critical to your success. Fundamentalism in business leaves no room for creativity and problem-solving.

How can you pursue both process standardization (inherent in automation) and innovation? How can it be done in a smaller organization that lacks IT and programming depth if you hard-code all the work you do? What is your expectation for process improvement cycle-time in workflow and systems? Is that the same as allowing over-rides and exceptions to the rules? Can your people get away with saying: “Despite the system, I CAN do that?”

Tell me, how do you maintain that kind of balance and become great?