Operational Innovations Can Transform Your Company

Home/Publications/CIDM eNews/Information Management News 08.04/Operational Innovations Can Transform Your Company

JoAnn Hackos, PhD
CIDM Director
joann.hackos@comtech-serv.com
www.infomanagementcenter.com

In his April 2004 article in the Harvard Business Review, reengineering guru, Michael Hammer, takes on the unglamorous changes in everyday operations, revealing their potential to produce significant reductions in cost, increases in productivity, and improved customer satisfaction. “Deep Change: How Operational Innovation Can Transform Your Company” speaks to the operational innovations that are near and dear to the hearts of information-development managers.

Hammer begins by telling the Progressive Insurance story, a company that has seen phenomenal growth in an otherwise staid auto insurance market. Progressive’s growth came not through acquisitions or mergers, the stuff that puts CEOs on the front page of The Wall Street Journal, but through substantial innovations in everyday operations.

You’ve probably seen Progressive’s television ads inviting customers to use their rate-comparison Web site. Behind the scenes, they simply did their work better than their competitors. For example, if you have an auto accident, Progressive representatives are on hand 24 hours a day to take your call and schedule a claims adjuster. The claims adjuster works out of a mobile van, enabling a nine-hour turnaround rather than the industry-standard seven to ten days. The adjuster prepares an estimate on the spot and will, in most cases, write you a check immediately.

What provoked this innovation? At Progressive, we note a strong connection to the customer, the willingness to listen to customers’ frustrations, and the common sense to act on them by changing the core of their business operations. As a result of customer feedback, they did not merely tweak the details of the claims adjustment process. They dramatically rewrote the process, resulting in significant cost savings for the company. More important, however, the hassle-free claims process keeps customers happy and loyal, reducing the significant burden of constantly replacing lapsed customers with new ones.

Hammer tells several stories of operational innovation, including Dell’s direct sales model for computer sales and Wal-Mart’s cross-docking practice, which moves goods from an inbound delivery truck to an outbound one going to a store, eliminating the need for expensive warehouse space. With every new story, we find substantial decreases in cycle time, development expenses, and operating expenses, at the same time that customer satisfaction is boosted.

Inventing Operational Innovations in Publications

In information development, we have the potential to pursue innovations in two areas: development and operations. Although some of the work we do in information development is a part of product development, a high percentage of our costs are related to the operational tasks of producing and delivering information to customers. We package information for multiple products, produce graphics, facilitate localization and translation, handle final production activities, and supervise, if not control, delivery.

Our development innovations focus on designing and developing unique new ways to affect customer productivity. Our operational innovations involve finding new ways to do our work, including single sourcing and content management. By automating final production tasks, publications organizations have reduced cycle time by cutting days or even weeks off the end of the life cycle. By managing small chunks of information so that they can be translated earlier, we have promoted simultaneous product releases in non-English-speaking markets.

Despite the obvious productivity gains and cost reductions, publications managers still bemoan the lack of support they get for their efforts from senior managers. Hammer sympathizes, noting the operational innovations are traditionally undervalued in corporate culture. “Operations simply aren’t sexy,” Hammer exclaims, in a business climate that rewards grand strategies and big deals. The everyday work of getting the product out the door is just too boring for executives to pay attention to.

As we know all too well, operations are often out of sight. How many times have I heard publications managers tell me that none of the senior managers know what they do? Only when the CFO notices the documentation department’s budget line does anyone seem to pay attention. Hammer tells us that we’re not alone. Most operational innovations are grassroots efforts begun by people who care about finding opportunities to improve processes.

Despite making the case for operational innovation, Hammer points to a shortcoming that strikes at the heart of technical publications—the deadline. Publications managers have to respond to the demands of the product release cycle deadlines. As a result, we often put aside opportunities for operational innovation. “We’re just too busy getting the books out the door,” we insist. “Where will we find the time to make changes in the way we work?”

Yet, the most spectacular operational innovations come under pressure. Offshore outsourcing, reductions in force, budget cuts—all these provide us with incentive to search for new ways of doing business.

Hammer lists four ways that help us discover new ways, not just better ways, of operating:

  • Benchmark with companies outside your industry
  • Identify the assumptions that constrain how you think about your work
  • Turn special cases into everyday actions
  • Look closely at seven key dimensions of work

Examining the Seven Key Dimensions of Work

The seven key dimensions of work represents a series of questions, all of which should be reexamined in the search for operational innovation.

  • What results are required to be delivered?
  • Who should do the work?
  • Where should the work be done?
  • When should the work be done?
  • Does the work or all aspects of it need to be done at all?
  • What information must be provided to the performers?
  • How thoroughly does each aspect of the work need to be performed?

Consider just one of the questions: when should the work be done? In the past, we’ve assumed that translation cannot take place until final documents are signed off. We considered the cost of making changes to translated text too high, and the translation vendors preferred to receive all the work at one time. We’ve learned that we can reduce the translation cycle time by delivering modules for translation throughout the development process, without significantly increasing costs, if we’re careful about what we consider ready to go.

As project managers, we have also learned that we can reduce total development time for content if we spend more time in the planning stage.

Operational innovation means inventing and implementing news ways of doing work. It typically involves tough-minded decision-making and unglamorous hard work. However, as Hammer concludes, “…it is the only lasting basis for superior performance. In an economy that has overdosed on hype and in which customers rule as they never have before, operational innovation offers a meaningful and sustainable way to get ahead—and stay ahead—of the pack” (p. 93).