What 2007’enterprise is. Production is changing.

0
2009

At first sight nothing has changed. Coca Cola still produces beverages, GM cars… So what makes me say production changed ?

If you have a closer look you’ll realize that enterprises are now producing information. And what about car manufacturers for example ? Exactly the same. Consider, for example, how much information was necessary to conceive and build the famous Fort T ? And the amount of information that the same goal, making a car, requires now. Compare the number of people whose job is producing information to those whose job is producing the final product in the 70s…the 80s…and now. Enterprises are information producers because the part of information contained in each final product, may it be a car, a shampoo, a computer, is increasing to an extent we can hardly realize.

The example of car manufacturers is clear : they invent concepts, try them, conceive cars, design parts of the car…have 95% of them built by subcontractors, assemble them, conceive a marketing campaign….

What is car manufacturing in all those operatons ? They are car conceivers, and less and less car manufacturers. Most of the people they hire work with their brain and not with their hands.

Finaly you may think you really knew all of that…and that enterprises also kwew…Perharps. But there’s a huge gap between acknowledging this situation and taking it into account.

First, considering the way you manage people. You hire brainworkers and manage them the Taylor way. Isn’t that a nonsense ?

Considering value now. The value of a product strongly depends on innovation, ability for people to think together. That’s where value is created…the product is only the embodyment of an amazing amount of information that’s been created prior to production.

This reflexion on value is essential and too often forgotten : we want to build agile and smart enterprises and we still ask for an ROI based on old fashionned indicators. What’s the ROI of a brainstorming, of monitoring competitors, market, ideas…? Hardly assessable. We kept indicators based on time and productivity in a system were time and volume producted aren’t as related as they were. Adding that, talking about information, we’re not looking for volumes but for quality… you may understand the dilemna of managers who are in charge to evaluate such activities.

It reminds me of this exectuive who told me once “we hire people because they can innovate, think. It’s very important in our recruitment process. But once they’re hired we put them in a system where everything is lead by productivity and where thinking or having ideas is a waste of time.”

Another point concerns production tools. Traditionnal production needs very tough information systems. If we take into account the evolution we’re talking about, enterprises also need tools based on individual information production and collective thinking. This new generation of tools may favorize information treatment by the individuals since only human being car enrich information with his thought and refelxions. Individuals are becoming their own machines and the innovation and thinking process isn’t ERP-able.

Since enterprises produce more and more information, and since their wealth is in their ability to think, to innovate and make their teams produce and share information, tools and indicators have now to take this new deal into account.

I’m affraid we’re very far from that.