Make the Sale, Now Flip the Switch
Each problem that I solved became a rule, which served afterwards to solve other problems.
—René Descartes
While the Agile Manifesto points to the power of responsive and customer-focused work, there’s an underlying implication that should not go ignored.
Take a look at the phrasing. The creators could have written, “individuals and interactions, not process and tools.” Instead, they phrased it as “individuals and interactions over process and tools.” The insinuation here is rather significant. While individuals and interactions may be superior to process and tools, these two items should not be discounted. Processes play an essential role in a thriving organization. They build a foundation from which to grow.
Let’s examine this in context. In the last chapter, we covered agility—how best to harness the unexpected to grow your business. But isn’t growth inherently disruptive? How does an organization maintain a stable foundation as its resources expand and its needs change?
The answer, as you might’ve guessed, lies in processes. Standardizing operations will help you create your organization’s bedrock. It will do away with the fires you find yourself fighting again and again, and allow you and your senior team the freedom to direct your gaze toward the future. The MIT professor and author, Peter Senge, put it rather well, “If you reward fire-fighting, you get a lot of fires.”1
Some organizations devote a task force to this. Usually titled the Organizational Effectiveness Function, the group’s goal is to eliminate any inefficiencies or recurring problems. They comb through the different processes of their organization and mine the data to determine what can be further optimized. This kind of team is great, but I recommend you take things a step further. What I look for in a healthy organization are processes that operate with routine efficiency.
I call this strategy functioning as a utility. I often give my clients the metaphor of a light switch—you roll out of bed in the morning and, without thinking, flip the switch. You don’t waste any brain power on lighting the room. A light switch has one job, and it does it well; this is the nature of a utility.
To establish the bedrock of your business, there will need to be processes within your organization that work the same way. There’s no doubt you’ll need to fight many fires as you grow. Some of them will be unavoidable.
If you can begin creating processes within your organization that function as a utility, you will be able to mitigate many of these disruptive issues.
For a process within your organization to function as a utility, it must embody specific criteria. Let’s explore the “what” and “why” of each.
The Four Traits of a Utility
1. Efficiency
Efficiency should be pretty straightforward. The reason for converting any process into a utility is to create consistent reliability, so that everyone involved can shift their focus elsewhere and to more important concerns. It should be efficient enough that it allows you that freedom. The simple on–off methodology of a light switch is a quintessential example.
2. Flexibility
Because the definition of growth is positive change, you’ll need to design your processes so they’re able to accommodate these changes. I recommend you periodically review your methods to ensure they’re still delivering the results you want. Things may need tweaking as your organization evolves. For example, it’s easy to flip a switch, but how is the energy powered? Is it coal? Gas? Nuclear? Solar? Initially, coal could be your best option because of cost, but as you grow, you may realize that solar benefits your eco-friendly brand and strengthens customer loyalty.
3. Replicability
For a process to function as a utility, it must be repeatable. If you’re fidgeting with how you do things every time, it undermines any efficiency—and can often lead to confused or upset customers. This is the power of standardization. A utility will operate the same way every time, which will please you and your workers. It will also satisfy your customers if they’re a part of the process. Uniformity allows for trust and reliability while doing away with unnecessary problem solving. Think about every hotel room you’ve ever been in—no matter what it looks like, the light switch is always at the same height on a wall, performing the same function.
4. Scalability
It should come as no surprise that the purpose of creating utilities within your organization is to mitigate many of the issues that arise with expanding your operations. As a result, a utility must be able to grow alongside your business. No matter what you’re lighting—be it a bathroom or a stadium—the electronics are always triggered by a switch. Even in the case of voice recognition technology like Amazon’s Alexa do we arrive at the same utility model. Using Alexa is equivalent to outsourcing the process of turning on the light switch to a third party, a system that allows for the same routine functionality and scalability of a utility. (You’ll hear more on outsourcing in a moment!)
If you’re thinking how similar this all sounds to grown-up behavior, don’t worry, you’re on the right track. Just like there’s a spectrum between start-up and grown-up (as we saw in the SOP continuum), there’s also a spectrum between agility and utility. In fact, you could even say they’re the same. Functions of an organization must be agile to innovate and grow, but other departments must act as a utility to support this growth with consistency and stability. This balance allows your organization to root itself in the ground ,while also reaching toward new heights of innovation.
Maintaining balance depends on why not every process within your organization should function as a utility. There are several ways to gauge what strategies warrant this optimization.
Consider creating a threshold for problems that arise within your organization. Convene a meeting with your senior leaders and discuss what fires you and others are always fighting. Some issues may not be worth your time to address. Others may be more impactful. For difficulties that fall into this category, graph out their frequency. If the number of times a difficulty arises crosses a certain threshold, you should consider turning it into a utility (Figure 6.1).
Different problems will require different thresholds, which will depend on the degree to which each issue is compromising your success and taking your focus away from what’s important. For example, there may be a challenge you deal with on a regular basis, but its impact is so low, and it takes so little time to solve that it doesn’t threaten your performance. In other situations, it may make sense to outsource specific functions of your organization. You may consider this if your organization is on the smaller size. It’s a quick, hands-off solution, and a great idea if you’re expanding rapidly and don’t want to have to deal with strategizing for expansion.
In essence, outsourcing is a way to pay for flexibility and scalability. As we grew, Compaq had thousands of temporary employees. Rather than managing all that ourselves, we outsourced the process to various hiring agencies. The agencies functioned as utilities themselves. It became a central aspect of how we ran our business.
Figure 6.1 Thresholds
The flip side to this tactic, however, was the control we handed over to the agencies with which we contracted. Because outsourcing instantly converts that particular function into a utility, it loses its agility in exchange. The same is true for any process you transform into a utility. This is why it’s important that certain functions do not become one—as we covered in the last chapter, there are substantial reasons why particular aspects of your organization must remain agile.
Making a process function as a utility can sometimes be as easy as a simple discovery. Have you ever realized that a job that took several people to complete could be executed by just one person? Other times, though, it will require more thought.
A core competency of a utility lies in the staff that helps execute its function. You want employees who get satisfaction out of doing things efficiently rather than employees who enjoy working creatively, which should be a large factor to consider when choosing who will help with these processes. You don’t want an innovative manager redesigning your shipping procedure in the middle of a delivery.
But why list everything out when I can give an example with which we’re all familiar?
Henry Ford’s automobile assembly line is the epitome of a utility. In 1913, Ford took a process that was taking 12 hours and scaled it down to just two and a half. Initially using a rope-and-pulley powered conveyor belt, Ford’s workers were able to manufacture the famous Model T car in a continuous flow. A few months later and they updated to a mechanized conveyor belt capable of covering as much as 6 feet/ minute. As they amassed millions of customers, the same assembly line production methods proved successful not only because of efficiency but because of scalability, as well.
And yet, what’s worth noting is that Ford failed to synthesize the all-important balance of agility and utility. In the mid-1920s, about 10 years after his large-scale success, he began to see a decline in customers. Too intensely focused on elongating the popularity of the Model T, the entrepreneur missed where the market was heading. Consumers wanted inexpensive automobiles that featured more features than what Ford was offering.2 But alas, the historical tycoon missed the boat—or car.
Here’s another instance that’s a bit more modern.
For most businesses, onboarding is one of the most expensive and demanding processes with which they deal. In some cases, the sales force will develop its strategy for what works. The issue is that the sales people sometimes don’t communicate this to the rest of the organization. Suddenly, the sales force is describing products, explaining services, or making promises that the other departments can’t possibly fulfill. Maybe sales people guarantee two-day shipping when in reality it takes 10 days. Now the organization suddenly risks disappointing customers and degrading loyalty.
This disconnect in customer expectations is common across numerous industries, and it poses a legitimate threat to customer bases everywhere. You can transform the processes of sales, manufacturing, and delivery into utilities without compromising their flexibility—because, after all, each of your clients will have slightly different needs that you’ll want to accommodate.
All of this comes back to aligning internal and external strategies. Standardizing these processes will ensure that the sale is representative of what your business can offer customers.
You may find your business has already turned various departments into utilities. It’s common for an executive to create an efficient and routine procedure for something he has had a bad experience with in the past. That bad experience has become a hot button for him, so he develops a high level of efficiency around it to ensure it never happens again. It could be anything from requiring new employees to undergoing an orientation or creating a template for client contracts. While it’s always great to learn from our mistakes, this phenomenon is usually more subconscious than anything else. Intentionally and explicitly converting processes into utilities is where real optimization happens.
I worked with a market research firm several years ago by the name of Schlesinger Associates. They were a family business who had built themselves from the ground up and were highly successful masters at getting clients in the door. But as they grew, they realized they didn’t have the internal infrastructure to support their success. To create the proper standardized backend processes, the CEO brought in an executive with a background in finance and hospitality as President. They formed a true partnership and with their complementary skills, they led the company to exponential growth.
Of course, no strategy frees your organization from any and all turbulence. Fires will break out regardless of where you are or what you’re doing. You can use utilities to address these fires proactively or reactively. You can also send in firefighters. Often, you’ll have to rely on all three tactics.
It’s all part of surviving and thriving, and it follows the same tenets of the evaluating and reevaluating that I covered in the earlier chapters. Standardize your foundational processes, evaluate your successes, learn from your mistakes, and change accordingly.
It’s time for note taking again. Imagine what fires come up for you and your organization all the time. Which ones are the most obnoxious? Inconvenient? Tedious? Which ones have the largest impact on productivity? Now take a look at where this problem originates. What would it take to create an optimized process to straighten out the issue? How could you work with your fellow senior leaders to address this fire and others? Are there any processes in your organization right now that could easily be turned into a utility without expending many resources?
1P.M. Senge. 2006. The Fifth Discipline: The Art & Practice of The Learning Organization, Revised & updated ed. (New York: Doubleday).
2History.com Staff. 2009. “Ford’s assembly line starts rolling,” History.com.