“In this interview, Richard Milnes, CEO of Zaptic, discusses how to enable digital operational excellence and close the gap between customers and frontline workers. He also encourages leaders and managers to consider the manifold benefits of building their digital work platforms with Business Process Management. “
makes it easy to configure and distribute processes for execution
Organisations are often focused on the customer experience, making use of mobile, social, and analytics technologies to optimise the online relationship. But if the customer has a poor in-store experience because of a process failure, the whole customer experience is jeopardised.
A key benefit of BPM is the ability to bring data, best practice guidance, and specific applications all into one place.
â€˜insights to actionâ€˜: the convergence of awareness, knowledge, and action.
responsive and predictive maintenance (as opposed to the usual planned maintenance). Itâ€™s about using data to prioritise what happens on the front-line.
Process agents work out in the field using their mobile apps, and fixing problems
Process experts know how to do something specific. They are experts in that process.
Business managers predominantly focus on KPIs and making sure that a process is executed well by the process agents at the front-line.
The challenge for companies, as always, is to ensure that correct standards are in place without having to put everyone through months of expensive training.
So, one of the challenges is to maintain the brand standards and the quality and compliance across the franchise networks.
“Autonomy may be the single most important element for creating engagement in a company. How can anyone feel engaged, let alone inspired, if she feels that some supervisor is always looking over her shoulder? But autonomy is a double-edged sword. On the one hand, it spurs creativity and involvement. On the other, unchecked autonomy can lead to ambiguity and inefficiencies, even organizational chaos. To find the right balance, you have to wrestle with three challenges:”
Balancing autonomy and accountability. An essential counterweight to autonomy is strict accountability for results, and for the actions and behaviors that deliver those results. A company has to establish a strategy and a purpose that provide context for employeesâ€™ actions.
They establish transparent boundary conditions and clear expectations. Employees and teams know they will be held accountable, and they know where the guardrails are.
Balancing freedom to innovate versus following proven routines. The art and science here is determining how to get both outcomes â€” consistency and innovation â€” in the right proportion and in the appropriate parts of your organization.
In many areas, freedom to innovate is the critical need
Other areas, however, may benefit from standardized approaches. These are areas where consistent outcomes are essential and where speed of execution comes from deploying common methods, best practices, and enforced routines
Balancing alignment with control. This task is closely related to the other two.
In dynamic business environments, where innovation cycles happen in days or weeks rather than months and years, and where much of the work is cross-functional in nature and is undertaken by small, agile teams, this type of organizational model can be slow to respond and innovate.
Its more than 2,000 employees are organized into agile teams, called squads, which are self-organizing, cross-functional, and colocated. Spotify has largely succeeded in maintaining an agile mindset and principles without sacrificing accountability. It enables innovation while keeping the benefits of repeatability, and it creates alignment without excessive control
Spotifyâ€™s core organizational unit is an autonomous squad of no more than eight people.
Each squad is accountable for a discrete aspect of the product, which it owns cradle to grave.
Leadership within the squad is self-determined, while the chapter leader is a formal manager who focuses on coaching and mentoring.
At first reading, it might sound like just another way to define a conventional organizational matrix in Millennial- and digital-friendly terms. But a closer examination reveals just how different the model really is and why it seems to work so well.
The squad structure achieves autonomy without sacrificing accountability. Every squad owns its features throughout the productâ€™s life cycle, and the squads have full visibility into their featuresâ€™ successes and failures.
To ensure that the feedback process is effective for individuals as well as for the squads, Spotify redesigned its performance management system to separate salary discussion and performance evaluations from coaching and feedback.
Employees may solicit feedback as often as they choose. Spotify employee Jonas Aman told us, â€œThe result is a process that everyone needs to own and drive themselves â€” it is about development and personal growth.â€
Spotify encourages innovation without losing the benefits of repeatability. Since squads are the primary centers of innovation, Spotify introduced its chapters as the matrix to connect competencies across squads.
Spotify fosters alignment without excessive control. The central organizational feature that shapes Spotifyâ€™s model is the concept of â€œloosely coupled, tightly aligned squads.â€ The key belief here is that â€œalignment enables autonomy â€” the greater the alignment, the more autonomy you can grant.â€ Thatâ€™s why the company spends so much time aligning on objectives and goals before launching into work.
Clearly, not all of Spotifyâ€™s choices will be appropriate for every company; thatâ€™s not the point. Rather, the point is that a company must make explicit choices in its operating model, ways of working, and culture that address the three core tensions between individual autonomy and organizational goals.
As digitization penetrates more fully, it will dampen revenue and profit growth for some, particularly the bottom quartile of companies, according to our research, while the top quartile captures disproportionate gains
Fast-followers with operational excellence and superior organizational health wonâ€™t be far behind.
Its impact on the economic performance of companies, while already significant, is far from complete.
This finding confirms what many executives may already suspect: by reducing economic friction, digitization enables competition that pressures revenue and profit growt
Beyond the averages, we find that performance is distributed unequally, as digital further separates the high performers from the also-rans. This finding is consistent with a separate McKinsey research stream, which also shows that economic performance is extremely unequal. Strongly performing industries, according to that research, are three times more likely than others to generate market-beating economic profit. Poorly performing companies probably wonâ€™t thrive no matter which industry they compete in.
ut our survey results suggest that as digital increases economic pressure, all companies, no matter what their position on the performance curve may be, will be affected.
These findings suggest that some companies are investing in the wrong places or investing too much (or too little) in the right onesâ€”or simply that their returns on digital investments are being competed away or transferred to consumers
Improving the ROI of digital investments requires precise targeting along the dimensions where digitization is proceeding.
This picture, combining the data for all of the industries we studied, reveals that todayâ€™s average level of digitization, shown by the dotted vertical line, differs for each dimension. Products and services are more digitized, supply chains less so
he results confirm that digitizationâ€™s effects depend on where you look. Some dimensions take a bigger bite out of revenue and profit growth, while others are digitizing faster.
The biggest future impact on revenue and EBIT growth, as Exhibit 4 shows, is set to occur through the digitization of supply chains. In this dimension, full digitization contributes two-thirds (6.8 percentage points of 10.2 percent) of the total projected hit to annual revenue growth and more than 75 percent (9.4 out of 12 percent) to annual EBIT growth.
Despite the supply chainâ€™s potential impact on the growth of revenues and profits, survey respondents say that their companies arenâ€™t yet investing heavily in this dimension.
Similarly, there is little investment in the ecosystems dimension, where hyperscale businesses such as Alibaba, Amazon, Google, and Tencent are pushing digitization most radically, often entering one industry and leveraging platforms to create collateral damage in others
By now, in fact, this critical dimension has become â€œtable stakesâ€ for staying in the game. Standing pat is not an option.
is whether companies are overlooking emerging opportunities, such as those in supply chains, that are likely to have a major influence on future revenues and profits.
Our survey results also suggest companies are not sufficiently bold in the magnitude and scope of their investments
The one exception is the ecosystem dimension: an overactive response to new hyperscale competitors actually lowers projected growth, perhaps because many incumbents lack the assets and capabilities necessary for platform strategies.
Here we can see that the most assertive players will be able to restore more than 11 percent of the 12 percent loss in projected revenue growth, as well as 7.3 percent of the 10.4 percent reduction in profit growth.
Leading companies not only invested more but also did so across all of the dimensions we studied. In other words, winners exceed laggards in both the magnitude and the scope of their digital investments (
So we found a mismatch between todayâ€™s digital investments and the dimensions in which digitization is most significantly affecting revenue and profit growth.
. Combining this kind of superior strategy with median performance in the nonstrategy dimensions of McKinseyâ€™s digital-quotient frameworkâ€”including agile operations, organization, culture, and talentâ€”yields total projected growth of 4.3 percent in annual revenues. (
Yet many recognize that few companies can mount disruptive strategies, at least at the ecosystem level. With that in mind, we tested a second path to revenue growth (Exhibit 9).
This fast-follower profile allows more room for strategic errorâ€”you donâ€™t have to place your bets quite so precisely. It also increases the premium on how well you execute
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