The challenge of business process improvement is to bring the right kind of solution to bear on each problem. To the carpenter with a hammer, every problem looks like a nail. So, too, the analyst fits the business problem to the tools he has acquired from his experience. We have built our business around the idea of breaking this mindset, and bringing the right tools to bear on each problem we tackle.
Our method focuses on five “habits” that we learned have the greatest impact on solving the widest variety of problems. Taken individually none of these is new; but practiced together consistently over time they consistently affective.
Our long history in the automobile industry, supplemented by work in finance, healthcare, and other industries, has presented us with enormous variety of problems. We were smart enough to solve a lot of these ourselves, but we don’t have all the answers; this gave birth to the first habit: keeping a “Rolodex of Talent”. We developed the habit of keeping in touch with the best people we have worked with. Now we have a worldwide network – an extended team – in industry and academia that we can draw upon to bring new thinking to difficult problems.
Looking at the problem from the customer’s perspective is a habit that comes naturally with practice. There is a tendency for people to structure a solution too early, and it is natural to fit a problem to patterns already learned in order to “get one’s mind” around the problem. This leads to “inside out” thinking, which is another version of the hammer and the nail problem. Finding out what the customer thinks is the second habit – and an essential one. It breaks down inappropriate assumptions and changes perspective from the analyst’s view to the business view.
The third habit is what is called "Genchi Genbutsu” in the Toyota Production System, and can be paraphrased as “go see for yourself”. The idea is that the problem solver needs to remove all barriers to his understanding of the problem. If a problem is described by a third party, the description is only an abstract of the real-world situation, and may leave out facts essential to understanding and solution. Seeing for yourself is often “seeing what the customer is seeing”, which reinforces the customer view and encourages a “now I know what you mean” experience. Without this habit there is significant risk of investing in solutions that simply don’t work.
Large elaborate projects bring with them a commensurate amount of risk. Size breeds complexity, comprehension problems and communication problems. It also increases time to delivery, which exposes the project to change, and change is the enemy of a complex design. The industries we have worked in are large and complex, and present complex problems. Making a change within a complex organization almost always creates unanticipated side-effects that have a habit of being the kinds of side-affect you don’t want. The habit of breaking a project into measurable, manageable parts provides feedback, and opportunities to make adjustment to resolve negative side-effects and business changes. Like Genchi Genbutsu, this is also a proven practice at Toyota.
The fifth habit is to avoid early automation. Automation introduces additional risk, and reduces flexibility. The first priority is to get the process right – where “right” generally means “simplified”. Simple processes are more understandable and manageable. They tend to produce a higher quality result at lower cost, and are cheaper to automate.
Taken together, these habits break the “hammer/nail” dilemma. We focus on the process; we go and see it for ourselves; we look at it through the customer’s eyes; we form a solution, using the talent from our virtual team as necessary; then we structure an implementation that provides phased feedback and business returns.
These are our five habits, and we have applied them successfully to all types of problems:
- Distribution of new cars – Getting the right car, to the right place when the customer is ready to buy
- Service – Providing dealer technicians with quick and easy access to service information
- Diagnostics – Providing dealer technicians with most probable ranked repair list for symptoms that appear on their cars
- Parts & Accessories – Providing a simple process for independent repair shops and consumers to buy parts, accessories
- Warranty – Reliability Analysis using Weibull methods
- Order levelizing system - To achieve level production flow combined with Just-in-Time dispatch
- Sales Programs – Providing a innovative system that helps simulate and roll out new sales programs for banks that can then be used by the dealers to finance vehicles
- Investment - High yield (junk bond) portfolio management.
- Communication - Secure physician/patient communications
- Management - Absence & disability management
- Portal - Life insurance agent portal
- Distribution - Optimum rack loading