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5 Process Model Innovations That Changed the World

· FLOW processes

For sure we all like to a hitch a ride on the consensus train passing by our screens all day long. It's easy to nod at what we know. More difficult though to admit to a little lethargy and overturn those assumptions that allow us to yawn when we should be thinking. The idea that you need to focus on business model innovation is a carriage on that consensus train, a big one. However, all of you who want a journey, a different idea is now traveling around: it is called process model innovation. Process model innovation changes whole economies. Process model innovation squashes old ways of work. It leaves nothing untouched.

Process model innovation begins in the firm with an idea like can we redesign our supply chains? Or can we do something more social? Is there a new way to organise? And then it spreads its wings and flies across the globe changing most forms of economic activity and sources of competitive advantage in its path.

Just like we all got a wake-up call from the business model canvas, we now need strong coffee while we face up to the need for a revolution in processes.

Flow is all about new processes. Process model co-creation, in fact. Flow is grown-up work where everyone gets a say and a role in decisions - you can buy the book here if you want to get in on the ground floor. Flow folks create good decisions by the way they interact and they interact around visualisations of work in progress. Flow is the ultimate in maintaining adaptability is we seek out value in everything we do. But before flow.....?

Process Model Innovation1: The Platform and The Ecosystem

I promise to go on and state the obvious later - one of the biggest process model innovations in history was the factory. Another was supply chain management coupled to business process outsourcing. Yet another would be the assembly line.

Before we pig out on the lists, here is the the most interesting of late: the platform and the ecosystem.

What is this thing called Platforms and Ecosystems? Basically, a way to scale business with often a broader scope of activities than has been normal in the past, at incredible speed. How is this done? By devolving risk to third parties (like app developers) or exploiting third party assets (like photos or taxis or data) and reorganising markets (like Amazon and Alibaba). Platforms are creating huge amounts of employment across the globe and changing the way business gets done.

Of course it is not new to organise markets. Entrepreneurs have always done it. But the newness lies in the incredible scale (120,000 customers per second at peak for Alibaba), scope (1 million new products in 2016 for Amazon Business) and the sheer speed (50 major system updates a day at Etsy). Scale, scope and speed have driven new software architectures like micro-services, in turn allowing us to think of large companies as the keepers of many smaller business opportunities. Here's a link to a white paper on China's tech platforms. It shows where platforms are headed next. Integration, dominance across sectors or as McKinsey recently said, borderless.

Process Model Innovation 2: Supply Chain Management

Supply chain management only began in earnest in the late 1980s. Coupled to ideas like business process outsourcing and labour arbitrage and supported by the big software movement (Enterprise Resource planning tools) it swept the world and raised many economic boats in China, India, Latin America and Eastern Europe.

Supply chain management is a catch-all for incredibly complex sourcing information and partnership development that redrew business processes internally but also externally, in effect ensuring that one firms' processes comprised of many other firms activities. It was the beginning of what a decade alter we began to call porous organisations.

Enough said? Nope. The next phase of BPO is nearly upon us. It is coming soon. Micro-outsourcing. We already saw a crude form of it in Mechanical Turk; we've fuelled the fire with the gig economy; and still to come.... lots of outsourced jobs at a local, but micro-level as companies pull work back from off-shore development centres.

Process Model Innovation 3: Microelectronics and Continuous Improvement

I tell the story in my book Platform, Disruption, Wave about the adoption of microelectronics by Japanese companies and why they were better at deploying integrated circuits than their US counterparts.

The example I give is the TV industry. Japan wiped the US industry out with a marginally inferior product. Why or how?

Two reasons:

The first is that working with silicon applications requires continuous learning, not just in the fab facilities but in design and application development. a chip is not a chip is not a chip is not a chip. Japanese learning processes allowed them to master the small adaptations needed to get semiconductor production on the path to continuous improvement.

The second reason is that, in the critical phase of development when TV sets were a mix of valves and circuits, US companies always went for broke. That is going for broke as in getting the best possible set out there. And going for broke in the sense that the sets were so high performance, the valves would burn out quickly, which meant your new best mate was the repair engineer. The Japanese pulled back from top flight performance and lived within the bounds of technology rather than pushing the envelope.

They won. And the idea of continuous improvement, like a rickety old fishing boat outside my window called Resurrection, was reborn to be joined by Shingo and Kanban and Obeya (and sadly Six Sigma!).

Process Model Innovation 4: Ok, The Factory

What's left to be said about it? Reorganising craft production, often stripping out skill and sociability (though by no means always), lowering cost and expanding markets across the globe for over a hundred years before assembly line production took factory know-how and raised it into something cheaper again, higher quality and more affordable. Taylorism, Fordism, scientific management FoxPro-ism. Bureaucracies evolved alongside factory production and created a kind of private sector cvil service full of white a collared middle class. I won't be as banal as to say factories changed how we live. They still define us.

Process Model Innovation 5: Open Source Software

There is not a single company anywhere on the grid that is not dependent in some form or other on open source software.

Surely one of the least appreciated revolutions every to take place, this massive commons of open-source lines of code, this meritocracy of collaborating developers, this global training school for how to get good code done, this fountain of innovation, this global band of smart people restlessly seeking the next best way to make stuff work, this school for how to organise and how to collaborate, open source dominates the Web, the enterprise, the Cloud and best of all no-one owns it.

Open-source defines process for good code but like the supply chain innovations of the 1990s it is also part-in and part-out, a significant and powerful gap through which talent can perform in the open and goodness goes back into the firm.

So how about FLOW??

It exists in a nexus of events: platforms that create incredible scale, scope and speed of change; micro-services that dissolve big systems into small parts and force us to think of process-as-communications; true global competition for the first time in history, where inevitably the best people will be pushing the second best; the enormous amount of information and innovation that we just have to know about and somehow shape without losing our hair.

In the age when complexity is unavoidable, FLOW is a way to make process a source of constant innovation, based on what we all know. In place of process being the anchor or the structure or the pillars of the organisation, FLOW lets process loose. That's what happens when you burn the scaffolding that holds hierarchy together. You have to convene; you have to talk, you have to co-decide, co-create, plan in the wild.

So FLOW in five bullet points:

  • Uses visualisations as a venue for people to co-create the best way to get work done together (good social interaction leads to good decisions at work)
  • Let's collective intelligence shapes knowledge on the best tools tricks, workarounds, experiences etc
  • Reduces cycle time through new levels of work breakdown, so we are working only a day or two before we have to talk, show, integrate (no going off and hiding behind a screen for a month!!)
  • Is an end-to-end systems driven by customer insight and customer feedback, all looped together
  • Turns the enterprise into a learning model where everyone can draw on the best of themselves and their colleagues
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