Business
is sometimes described as a (black) art, but in many ways I'd propose that it's
more akin to science. Consider the
following method described by renowned physicist Richard Feynman -
when explaining how a scientific law is
established (freely)
1. Guess
the law
2.
Compute the consequences of the guess accordingly and its implications3. Compare computation results to experience or nature (observations)
4. If the law disagrees with observations, it is wrong (sic!)
Similarly,
business reality - your scientific law - is what you measure in and adequately
can confirm as correct in your business, the foundation for how to direct your
investments, and base your decisions on.
Perhaps, at some point – even automate decisions on.
Fail to
measure - measure correctly, and the right things - and you will fail to manage
your business.
Recent
events seeing flash drops in the stock (DJIA) and currency
markets (Pound Sterling) give evidence of what can happen and go
terribly wrong, when autonomous decision and trading systems act on incorrect
data and algorithms.
The old
management adage "You cannot manage what you do not measure" rings
true in many ways.
(For physics aficionados; the
fact proven through different experiments that when observed on the quantum
level, reality doesn't seem to actually manifest before we attempt to measure
(observe) it, is even more intricate.
Luckily, business operations aren't that capricious.)
Secondly,
failing to connect incentives to the right and balanced set of measurements,
will inevitably yield some very unproductive behavior from the employees in the
organization.
One of
my favorite examples - urban myth or not - is the software company who wanted
to minimize the occurrence of bugs in their application suite, and ingeniously incentivized
the R&D department through rewarding the discovery of bugs in the code /
functionality.
-
Needless
to say, as the cynics of you will have figured out at the start of the example,
the number of bugs in the software didn't seem to go down, at all ..
How can
one go about to accurately observe, measure, and direct ones business and
organization? Depending on its current
state - it may be a lengthy journey, but there's ROI and reward to be had at
every step along the way. Though there
may not be a pot of gold at the end of the journey (in reality it truly never
ends, you just become better - as an organization, Customer, and supplier) there
are some business benefits enabled in the process which are not only financial –
it builds capabilities which enable business development, in a positively reinforcing
upward spiral. Similar to machine
tooling; we can’t assemble a production line without a basic spanner or
screwdriver at some point, and automation & robotics is a step further down
the line of maturity, rapidly becoming a major driving competitive force
regardless if you’re in the service or manufacturing business.
From an
IT perspective, there’s a similar dependency between data, information,
knowledge, tasks/activities, processes, and the level of accuracy and control
that can be asserted over each component across the business. With every step and level, small
discrepancies can amount to major inconsistencies towards the end of the chain –
making checks and balances, and (automated) mechanisms to confirm data accuracy
over time extremely important.
It’s
these building blocks that make up the digital dimension of your business, the Digital Customer Experience - harboring
the potential of getting closer to- and gaining a better understanding of what your
Customer really wants/needs, and leveraging that knowledge into
market position or industry partnerships (or both).
Speaking
of automation - something tells me that we’ll struggle to explain to coming
generations what came first – the 3D printer, or the 3D printer factory – but until
we get there, let’s focus on the next step that can be improved in your
business for starters.
A
follow-up post will delve into the details of how a maturity ladder improving
the information and process tooling may be approached and climbed step by
step. Keep an eye out
for the latest updates!
By Fredric Travaglia, Business Development
Consultant @ Enfo
P.S. On
a side note Mr Feynmans life and adventures are brilliantly captured in two
books anyone with a slight interest in
nature, reality, physics or just life will enjoy – The Pleasure of Finding
Things Out, and Surely
you’re joking Mr Feynman. Regardless
if it’s the ins and outs of your business, or the fabric of nature, they
highlight – as the first title states – the pleasure of finding things out,
because you can!
https://www.youtube.com/watch?v=EYPapE-3FRw
https://en.wikipedia.org/wiki/2010_Flash_Crash
http://www.travaglia.se/2016/10/the-digital-customer-experience.html
http://www.travaglia.se/2015/10/who-is-your-customer.html
http://www.cnbc.com/2016/10/08/pound-sterling-flash-crash-needed-computers-but-a-human-was-probably-the-cause.html
http://www.thedigitaldimension.com
https://en.wikipedia.org/wiki/Surely_You%27re_Joking,_Mr._Feynman!
