I grew up loving football and enjoyed playing it in high school. To me, it was the ultimate team sport that represented the perfect balance between power and grace, intellect and brute force, and strategy and execution. One of the reasons I gravitated towards playing football as an adolescent was the joy of improving in the weight room. At the time, I may have been more delusional on images of myself as Rocky fighting the Russian. But I now realize it was the efficiency – the systematic approach to improvement – that attracted me to the hard work done during the off-season in the weight room.
So you can imagine my excitement when my high school coaches instituted a new strength and conditioning program called ‘Bigger, Faster, Stronger’ (BFS) into our program. The BFS program was a more scientific approach to ensuring that we stimulate both fast and slow-twitch muscles to increase not just size and strength, but also speed and agility. It had an outcome-driven system in place to drive continuous improvement and peak performance. The secret was in the process. I could trust that the process was focused on the right areas of improvement in the right sequence and find ways to get the most out of my natural ability. Trust the process and show up every day to work, and the only direction you could go was up. As a player, one could trust the process better (change management) because you knew why becoming BFS had value. It was my nirvana.
The 3 E’s of Value: Effectiveness, Efficiency, Experience
“Efficiency is doing things right; effectiveness is doing the right things,” Peter Drucker
Fast forward to my life nowadays. The love for ‘the process’ is still there, but my attention is now focused on helping large businesses systematically improve their operations using process improvement techniques and emerging technologies within intelligent automation like RPA, ML, NLP, AI and BPM. The goal is to define the process, trust the automation/continuous improvement process, and focus on the right inputs to execute on that process and you will achieve a desirable business outcome. The outcomes will drive more effective and efficient companies.
The business outcomes piece is the area where I see a lot of organizations running into challenges and eroding their momentum. There tends to be a misalignment of direction that leads to the wrong experience or solving the wrong problem with the wrong tool. While an initial business case may seem very attractive to automate, they struggle to either realize the value outlined in that business case, and/or they underestimate the complexity of automating parts of a process that have been in place for many years. They also underestimate the change management required to change the people, process, and technology of their current state to an automated future vision. Simply put, they do not trust the process because they don’t understand the ’WHY’s- ‘why should we automate’, ‘why should we change our processes’, ‘can we just automate the exact process we have been doing for 50 years’, and ‘how we should automate’ questions…..To borrow from Simon Sinek, start with the ‘Why’ and build your process outward from that center.
Better, Faster, Stronger- The corporate version of BFS
However, each challenge breeds opportunity. Another observation is that most organizations do not look at the broader value that automation and continuous improvement efforts can drive. While this ‘automation era’ is new for many organizations, the real opportunity is to drive beyond what we would classify as ‘Efficiency’ metrics. The ‘WHY’ needs to be addressed to have clear alignment between vision, goals, initiatives, and projects. This is where adopting multiple value drivers within your intelligent automation program is critical. The 3 E’s of business value is a great approach to ensuring that your organization’s gets ‘Better, Faster, Stronger’ over time (and yes, I am taking liberty to change the ‘B’ to ‘better’ as bigger doesn’t always mean better).
BETTER: Effectiveness– Doing the right things
Being effective means doing the right things. While size can mean competitive advantages, bigger does not always mean better. This is especially true in this day of age where digital native companies (and pandemics) are constantly disrupting our businesses with more agile processes, less technical and people debt, and just as much access to resources like data and talent.
Most organizations looking to ensure they are making data-driven decisions look to focus on effectiveness measurements. They are looking to get to their resources focused on the right objectives and initiatives quickly. Leading activities typically include benchmarking initiatives, quality improvement, process discovery and decision support improvements. The outcomes tend to be bigger bets on ‘move the needle’ objectives once that confidence has been built thru analysis.
FASTER: Efficiency– Do what we already do but with less overhead
Being efficient means doing things right with the least amount of time and/or with the least amount of effort. This usually means doing what you already do but running leaner or moving faster. Many intelligent automation and continuous improvement efforts start with a focus on this set of metrics and rightfully so- it is low hanging fruit for business-rule driven automations that most people can grasp quickly. The focus for many large, global organizations for over a century was to become the biggest organization in their specific industry. This goal was justified as it allowed companies to drive out competitors and drive growth thru larger customer bases and price elasticity for their organizations.
Most organizations looking to beef up their size are looking to do so to take advantage of economies of scale across departments. Many of these departments include back office functions within Finance and HR, as well as operational areas like Supply Chain and client-facing operations like customer service. The leading activities include process standardization, lean and/or process improvement and cost optimization efforts. The outcomes tend to be time and cost savings, productivity gains, and overall margin improvement.
BETTER, FASTER, STRONGER: Experiences– Doing the right things for your stakeholders in the right way
Efficiency + Effectiveness=
Experiences are now engrained in all we do. Whether you are grocery shopping, buying diapers, or purchasing computing power via your friendly cloud service provider, what keeps you coming back to that vendor is the experience. Historically speaking, productivity has been the byproduct of experiences as I believe it is more fitting than productivity in modern times, but the productivity formula still works: Efficiency + Effectiveness= Productivity. Experiences can be harder to measure as they are, by definition, a lagging measure to the leading measures of efficiency and effectiveness. If we are more effective and efficient, we will focus on doing the right things well in a fast and economical way. But we also need to ensure we are beginning with customer centricity as our focus or else we may be becoming more effective and efficient at a capability that the consumer doesn’t value. This is our differentiation and why we exist.
Table 1: The 3 E’s of Value
|Value Driver||Definition||Leading Measures||Lagging Measures||Initiative Keywords|
|Efficiency||Doing things right||Cost Savings, Cycle Time reductions||Margin improvement, Price reductions||Lean, Cost optimization, Operational Excellence|
|Effectiveness||Doing the right things||Accuracy Improvements, Defect rates||Better performance, Higher Quality, Better forecasting||Continuous improvement, Six Sigma, A3, decision support, benchmarking|
|Experience||Connecting efficiency and effectiveness to drive customer adoption||Efficiency, Effectiveness, Response times, Customer Experience Index, Net Promoter Score||Increased loyalty of existing clients, Increased Sales to net new client, Price Elasticity, Customer-centric innovation||Know your customer, consumer journey mapping,|
As you can tell, the 3 E’s of value are not mutually exclusive. And that is the beauty of the connected cosmos of business value. There is no singular answer or starting point. If you focus on your consumer experiences (customer, supplier, employee), you are going to find ways to be more effective and efficient. And if you focus on your efficiency and/or effectiveness, your stakeholders will be the benefactors of a better experience. It is critical not to rob from one value driver to achieve another. Cutting the costs of an initiative that could lead to greater effectiveness is not strategy, it is quarterly thinking. Define the process. Trust the process. Measure your results. Iterate and Improve. And never stop your pursuit of becoming better, faster, stronger.