Business Ambidexterity – Where Do We Start?

 Ambidexterity is the senior leader’s Job One. Can we 

1. Protect the core business with OpEx/Lean, and
2. Ignite new Growth using the Digital methods

 Let’s imagine our C-suite & Board are aligned. ‘We need to do this. Where do we start?’

Our mantra is ‘Thing big, start small and scale fast’.

Think Big

Think big means defining your Aspiration & Winning Logic. For example: We want to be the best (fill in the blank) in the world. And here’s our overall approach:

1.     Take out the waste & variation

2.     Get close to the customer, and

3.     Get Digital to the core

Each of these elements must of course be translated & deployed as concrete activities at each level using our management system & the disciplines of Strategy Deployment. Constancy of purpose provides a ballast during the inevitable rough patches.

Start Small

Start small means building a Lighthouse (aka Showcase) project that proves ‘this thing actually flies’. Our showcase project typically entails levelling up a critical customer journey or creating & launching an entirely new offering. Our showcase is also a space – physical, financial, strategic and cultural – wherein a kick-ass innovation team can work in a new way, protected from organizational blockers. Typical goals: 50%+ improvement in launch lead time & cost, customer satisfaction, and profitability. Prerequisites: executive air cover, otherwise the proverbial corporate ‘antibodies’ will shut you down. 

‘New ways of working’ means daily huddles around a team board (either analogue or virtual or both), visual management, weekly planning & review, and data-based decision-making.  No HIPPOs or ZEBRAS[1]. New ways of working also means bi-weekly playbacks for senior leaders, and bi-monthly report outs to a ‘Shark Tank’ who will continue to fund the project (or not) based on demonstrated traction.

How do we pick our Lighthouse (showcase) project?  Start with an internal audit of your core management systems:

·       Voice of the Customer

·       People system

·       Work system, and

·       Management system

Where are the biggest gaps? Which of the candidate projects can help fill these gaps?

Then apply a strategic filter: Is this project aligned with our Aspiration & Winning Logic?  And then or course, do an Ease/Impact assessment.

The Lighthouse project will likely follow the proverbial ‘hockey stick’ curve illustrated above. We need to pass the following tests:

1.     Does it wow? (If not, why build it?)

2.     Can we make money? (Kind of essential)

3.     Does it work?

The third questions entails two levels of scaling Can we scale our showcase across the target markets? Can we scale our new ways of working across the organization?

Best wishes,

Pascal    E: pascal.dennis@leansystems.org

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[1] Highest paid person’s opinion; Zero expertise, but really arrogant.

The Ambidexterity Challenge – What’s Our Overall Approach?

Ambidexterity is the senior leader’s Job One & entails developing the ability to both:

1. Protect the core business with the proven methods of OpEx/Lean, and
2. Ignite new Growth using Digital methods & thinking

It’s an immense challenge for senior leaders and the Board. Let’s imagine they're are fully aligned & agree to move forward.   What’s our overall approach?

Based on our experience in multiple industries, the following generic logic is a good starting point: 

1. Take out the waste & variation, 
2. Get close to the customer, and 
3. Get Digital to the core

You'll of course tweak, refine, and adjust what you emphasize based on your business situation, but you can’t go wrong if you start with this overall logic.

Take Out the Waste & Variation

It’s not unusual to do dozens of process improvement events (PIEs) in the first few years. OpEx/Lean principles have made major inroads the past few decades but companies that practice them consistently are in the minority.  Bluntly stated: OpEx/Lean is hard. Much ink, tears & vitriol have been spilt debating why this is so. 

Please note that I’ve included Variation in the formula.  Variation degrades the management system. In fact, W. Edwards Deming called it a ‘virus’ that infects everything. PIEs must not devolve into mere ‘scavenger hunts’ for waste – that’s comparatively easy. The challenge is finding the root causes of both waste & variation and eliminating them with OpEx/Lean basics (including standardized work, visual management, quality in the process).

Get Close to the Customer

This is where things start to get interesting. In my experience, many companies believe they know the customer even though they have little direct contact or knowledge of him or her.  For example, an otherwise capable & thoughtful senior leader team comprising predominantly male, Gen Y, English-speaking Engineers & MBAs living in Chicago confidently proclaim this or that about a female, Gen Z, Chinese-speaking and deeply Buddhist persona living in a small east Asia city.

How do they know who she is, what she values and why she buys or does not buy their offering?  ‘We hired a local marketing firm to do a series of focus groups’. Good luck with that. This is where Growth Hacking & other elements of 21^st C marketing comes into their own.  But it’s a very different way of thinking & behaving for most organizations.

Get Digital to the Core

This means embracing so-called ‘exponential technologies’ like AI, Data, Cloud, RPA, AR, VR, Drones, and Blockchain. It also means embracing Digital methodologies like Agile Ways of Working, Design Thinking, Lean Experimentation, and the afore-mentioned Growth Hacking. Here’s the challenge: how to turn these methodologies into an integrated way of working?  One that makes sense for the business challenges you’re facing. Otherwise, you risk getting lost in a forest without a compass.

Each step of course, lays the foundation what follows. For example, if you digitize bad processes you will, as an RPA & Agentic AI executive told me, ‘create garbage at the speed of light’. And the three steps are cyclical, not linear. As your business challenges evolve, you’ll have to keep cycling back to step one.  As the poet said, ‘Rust never sleeps.’ Next time, I’ll talk about the nature of the journey.

Best wishes,

Pascal    

E: pascal.dennis@leansystemss.org

The Leadership Challenge, part 2 – What’s in it for Them?

How will you motivate your team, Pascal-san? 

A cherished mentor asked me this question decades ago. I was a young engineer & manager trying to absorb the legendary Toyota Production System. A lot has happened since those days, but his wisdom still informs me. The leader’s job one today is ambidexterity. How will we both protect the core business, and ignite new Growth? These entail very different mindsets and ways of working. How do we motivate our team members to make such extraordinary efforts?

How will you motivate your team, Pascal-san? 

Ambidexterity entails the ability to both 1) Protect the core business with the proven methods of OpEx/Lean, and 2) Ignite new Growth using Digital methods. It’s an immense challenge, and I’ve described blockers in earlier blogs. So, how do leaders motivate team members to take it on?  Here’s how I would answer the question.

We’re asking you all to help us transform our business. Why? Because it's a big challenge and we can't do it without you.

It's a big ask - life is hard nowadays and many of us are just hanging on, doing our best in a sea of seemingly endless change & turmoil. So, why should you put your backs to the wheel, why should you go the extra mile to help this organization get to the next level, and prosper in the long term? Bluntly stated, what’s in it for you?

First, the bad news.  I cannot guarantee that your jobs will not change.  And it’s likely some positions will be eliminated. As ever, we will do everything within our power to maintain employment stability.

If your job disappears, you’ll have every opportunity to apply for the new jobs we create. If you chose to seek other opportunities, or to retire, we'll be fair & generous.

Regardless, all of you will have the opportunity to grow and to learn. We’re going to invest in you so that you’re multi-skilled & invaluable to our organization.  We’re going to strengthen your capabilities in Operational Excellence and give you the opportunity to learn cutting-edge Innovation skills.

Why? Because we want you to help us continually improve our processes, and to share your innovation ideas so that we can continue to surprise our competitors and delight both existing and new customers.

You’ll have the opportunity to learn by doing through bootcamps, hackathons, our Shark Tank program and other interesting channels. We want you to become ‘employable for life’. We hope you choose to stay with us.

What about AI, you ask? Isn't it going to obsolesce the human & take our jobs?

I believe AI is going to be a tremendous enabler for us. I believe the teams of the future will comprise both people and AI agents, the latter doing specific tasks that free up people for higher level work, especially oversight to ensure our AI agents don't hallucinate and destroy value. But AI will never replace people. AI without acumen equals garbage at the speed of light. We will always need capable, committed people, and that's why we want to invest in you.

So, what's in it for you? Fun, growth, opportunity and being a part of kick-ass team in a kick-ass organization committed to doing the right thing, in the right way.

Best wishes,

Pascal

Ambidexterity – the Leadership Challenge (part 1)

Ambidexterity is Job One. Sustained prosperity in the 21^st century entails navigating in to very different worlds, first articulated by Aristotle. Senior leaders & the Board need to learn & practice two different mindsets and ways of working.

Why build something nobody wants?  Steve Blank

Ambidexterity entails the ability to both:

•  Protect the core business with the proven methods of OpEx/Lean, and
•    Ignite new Growth using the Digital methods of the world’s innovation hot spots 

2.     I’ve spent much of the past decade helping senior leaders & Board members navigate these two worlds.  I’ve described transformation blockers in detail in earlier blogs. In this series, I’ll discuss some of the challenges leaders face.

 Achievement in the World of Operations Can Be a Blocker

 Most senior leaders come from areas like Operations, Finance, Engineering or Technology. This is Plato’s World of Necessity – a world that follows natural laws, accepted standards, and codes of practice. This is the world of physics and chemistry, mathematics, the Toyota Production System, and Generally Accepted Accounting Principles.

 In this world, things cannot be ‘other than they are.’ For example, the energy in a Carbon - Carbon bond is 348 kJ/mol, whether you’re in Seoul or San Francisco. If you mix a polar salt like sodium chloride with a polar solvent like water, the salt will dissolve into its constituent ions (Na+ and Cl-). It happens every time, whether you’re in Tokyo or Toronto. I like the World of Necessity. I was trained as a chemical engineer & cut me teeth of factories around the world. I like natural laws – you can depend on them.

The past decade I’ve learned to work in the world of disruptive Innovation – Plato’s World on Contingency. This is the world of culture, opinion, style, fashion, politics and the like. It’s a place where things ‘can be other than they are’.  People say one thing - and do the opposite! Customers assure you they love your new offering and then stay away in droves.  You have a great market, and then it disappears for no discernable reason. You build the ‘better mousetrap’, and nobody cares. Though they’ll tell you they love it and will definitely buy it!  Different rules apply here.

And so, what you learn in the World of Necessity is often a blocker in the World of Contingency.  Here we face ‘complex’ problems for which there is no accepted approach, standard or code of practice. There are so many unknowns (both ‘known’ and ‘unknown’) that we have to 'Probe-Sense-Respond' our way to a remedy. In other words, remedies emerge through continuous experimentation, and a happy alchemy of data & intuition.

Imagine you’re a senior leader in a major Manufacturing, Aerospace, Healthcare, Construction or Financial Services company. You’ve grown up in the world of science, mathematics, standards and codes of practice.  Your company is rightly proud of its zero defect, high reliability, root cause problem solving culture, and of its mastery of complex technology.

Will you be comfortable in a world where 90% of your experiments fail?  All your instincts rebel against the idea, no? The difference in approach between Taiichi Ohno (father of the Toyota Production System) & Jony Ive (Steve Jobs’ Chief Design Officer) is immense. Leaders nowadays must understand both & be able to fluidly switch gears based on where they find themselves.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org