Manage product not a function

In today’s corporate environment company comprises of various function/departments. Often innovation and product excellence is  lost when company concentrates on multiple activities such as employe management, product performance and profitability, meet various statutory requirement, maintain various applications and so on.

Top management has a box full of issues, concerns, glitches which have to be dealt with. How could one manage this humungous task of organization management

A different perspective:

Create products as a business unit, make products and service as a profit as well as a cost center instead of an entire function.

Take for examples products such as Mailing, Hosting, Cloud, Security services etc. What if we make each product as center of excellence.

Lets look at how this type of management drill down, case in here “Mailing Product”.

Cost involved to sell each product – R&D (Innovation), People (Salaries), Operations (help-desk costs, Administration costs, Technology , Facility cost, Travel, Infrastructure) etc.

Profit – Revenue-Cost

A dedicated support function (Compliance, Sales, Procurement, Support etc) can be setup to these individual product (Dedicates resources for Mailing, Hosting, Back up etc). Hence mail service is not just a product in X company it is their individual value stream, a revenue center and a center of product excellence where the objective is to create more innovative products.

Each product have similar center of product excellence teams that strive to be on top. Even the measurements against these particular product becomes manageable.

Typical measurement lists for a product:

1. Number of support calls logged

2. Revenue per head count

3. Number of complaints

4. Delivery within time.

5. Revenues, Profits and so on…

This is a decentralized way to run a company but one may try to see if such management style reap any benefit.

I credit Jack Welch who forced me to think products as individual center of excellence (reference: Straight from the gut)

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Wait, now automate

Did your organization deployed rapid automation recently?

If yes,

  1. Did your organization contemplated seriously on impacts of the new automation on internal systems, external systems, suppliers and customers?
  2. Does the new automated system eliminate 7 kinds of waste?
  3. Does the new automated system add value to customer?

If your answer to point 1, 2 or 3 is negative then probably you rushed to automate rapidly that may produce an undesirable outcome to organization’s good intention to automate.

Toyota takes really long time to accommodate any kind of IT solution into their system. Principle 8 of Toyota Production system states to use only reliable, thoroughly tested technology that serves your people and process across boundaries.

At Toyota new technology is introduced only after it is proven out through direct experimentation with involvement of a broad cross-section of people. Toyota will go to great lengths to analyze the impact it may have on existing processes. (The Toyota Way – Jeffrey K . Liker)

Nowadays, majority of IT solutions are implemented with direct proposed solution without any defined metrics, cost-benefit analysis, impact on customers/systems/suppliers, impact on cross functional department, value addition and so on.

Points to remember before we automate:

1.      Establish manual process with the help of Lean, Six Sigma, TOC or any other proven improvement methodologies.

2.      See if the new automated system will add value to existing process, customers, suppliers and other stakeholders and remove waste from the process.

3.     Analyze the impact of new system that affects processes, customers, suppliers, systems and stakeholders

4.     Perform cost-benefit, impact and risk analysis.

These are just few tips but the organization must go to greater lengths and spend a great amount of time to decide implementation of new systems.

Decision making at Toyota imply strenuous planning for 10 months and then implementation in installments such as with pilot production and be fully implemented at the end of the year with virtually no remaining problems – Alex warren.

Let’s not rush to develop or buy the newest technology or application before you thoroughly test it and prove that this new technology will cater to all respected needs.

Less is innovation

Apple engineers coaxed Steve Jobs on impossibility of smart phones without call, cancel, menu, power or music keys. But, Steve was difficult to be convinced by the idea of having multiple keys in a smart phone. The idea felt callous and complicated to him; he was resolute and kept insisting to have only one main (home) key.Shocked engineers wondered on how to create or make something like this. But the engineers ultimately lost to Steve’s dream and dedicated incredible amount of hours, conviction and hard work to convert Steve’s dream into reality.

It is easy to build a phone with multiple keys that do multiple jobs, it was even easier for Steve to just copy. But instead, Steve challenged the conventional wisdom. This is an example of innovation.

Ironically, stripping extras from a product or eliminating extras from your application is not easy. It takes courage, time and loads of thinking to innovate. One, who continuously challenges the conventional wisdom, innovates and succeeds.

What does Microsoft project do? Creates task, allocate resources, budget and do a lot of “other stuff” but does it really do project management. It’s always perceived that tool for project management stands for Microsoft Project , is it? Is there anyone else who challenges the virtue of application being created based on conventional wisdom of project management?

Yes, we do have innovators, 37signals and many other such companies have challenged such conventional wisdom and created innovative apps. The answer to Microsoft project is Basecamp. The answer to search is Google. Almost every application you see is victim of old, sluggish and convention methods.  The gravity of conventional wisdom towards applications and products must be reversed and defied.

The customer needs wonderful, easy, useful and simple applications, lets give them just that.