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Drive Continuous Improvement With The Power of WHY?

Peter Johnson

The Power of WhyOur company recently reiterated a standing challenge to all employees, to find new, innovative ways to drive continuous improvement in everything we do.

The challenge prompted me to share a link to a visually compelling Slideshare by Bill DeRouchey titled “Power of Why”, as well as a few thoughts of my own on the subject.

Throughout my career, the need to design communications, processes, tools, deliverables, plans, objectives, KPIs/MBOs, etc., has been a constant; and the ability and necessity to ask “Why” has been a powerful tool for me, to make sure I know where I am going, before I start the journey.

In a past life, I was exposed to the “5 Whys”, a problem solving technique that is part of the Toyota Production System methodology, used to identify the root cause of issues. The idea was originally conceived to help drive quality control in manufacturing and business operations, and I believe the simple example below from Mind Tools helps illustrate the basic point.

  • Why is our client, ABC Co., unhappy?  Because we didn’t meet our delivery schedule.
  • Why were we unable to meet the agreed-upon delivery?  The job took much longer than we thought it would.
  • Why did it take so much longer?  Because we underestimated the complexity of the job.
  • Why did we underestimate the complexity of the job?  Because we made a quick estimate of the time needed to complete it, and didn’t list the individual stages needed to complete the project.
  • Why didn’t we do this?  Because we were running behind on other projects…. >> We clearly need to review and improve our time estimation and specification procedures.

Besides operations and manufacturing, I have also seen variations of the “Why” drill down techniques used within other buzzword programs like Business Reengineering, Change Management, Continuous Improvement, or Strategy development.

Ultimately though, its all about getting to the root of your Objectives (or issues), and then you can drill into the “Why do I/we/group/org/company do…XYZ?”

Frequently, its because “XYZ is what we have always done” but if we all understand and agree on what we are trying to ultimately do or achieve (Objective), then drilling down into “Why we do what we currently do”, or “Why we think we should do XYZ”, starts to enable everyone to develop their own clarity.

If you take the basic premise and let your imagination wander into your own area of work, I am sure you will find both reflective and forward looking potential applications:

Reflective:

  • Why are our current priorities or KPI’s set the way they are?
  • Why did we design a communication, product, KPI, process, etc. the way we did?
  • Why are we exceeding our XYZ goals, but not meeting our ABC goals?
  • Why does PQR take up XX% of my work time each week?
  • Etc.

Forward looking > start with a question, then drill down with “Why”

  • What KPIs should we set for next year?  Why?
  • How should we design this communication, product, KPI, process, etc.?  Why?
  • What do we need to do to ensure we meet our goals for the year?  Why (for each recommendation)?
  • How should I be focusing my time at work each day?  Why?
  • Etc.

Whether its 3, 5 or 10 times we ask the question, simply starting the sequence of “Whys” can help us better understand why we do what we do, the way we do it, and/or if there are maybe alternatives or opportunities for improvement.

When we were 3 years old, we used to ask “Why?” all the time, and probably drove our parents crazy.  Now that we are all grown up though (sort of), we frequently have developed or “learned” our own answers (maybe someone sprayed us when we reached for the banana), and have less inclination, or possibly even an aversion to challenging the status quo and asking “Why?”  In order to drive change and innovation though, we need to shake these inclinations or inhibitions, and carry on with our continuous improvement process.

Finally, let me acknowledge that Bill DeRouchey created his Slideshare presentation on the “Power of Why” for a design audience.  But don’t worry;  in our own way, we are all designers (of our own careers and lives, communications with others, goals and plans, etc.); and I believe the message is relevant for all of us, regardless of our job.

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Peter Johnson

About Peter Johnson

Peter Johnson is a Senior Director of Marketing Strategy and Thought Leadership at SAP, responsible for developing easy to understand corporate level and cross solution messaging. Peter has proven experience leading innovative programs to accelerate and scale Go-To-Market activities, and drive operational efficiencies at industry leading solution providers and global manufactures respectively.

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awareness

The Future Of Supplier Collaboration: 9 Things CPOs Want Their Managers To Know Now

Sundar Kamak

As a sourcing or procurement manager, you may think there’s nothing new about supplier collaboration. Your chief procurement officer (CPO) most likely disagrees.
Forward-thinking CPOs acknowledge the benefit of supplier partnerships. They not only value collaboration, but require a revolution in how their buying organization conducts its business and operations. “Procurement must start looking to suppliers for inspiration and new capability, stop prescribing specifications and start tapping into the expertise of suppliers,” writes David Rae in Procurement Leaders. The CEO expects it of your CPO, and your CPO expects it of you. For sourcing managers, this can be a lot of pressure.

Here are nine things your CPO wants you to know about how supplier collaboration is changing – and why it matters to your company’s future and your own future.

1. The need for supplier collaboration in procurement is greater than ever

Over half (65%) of procurement practitioners say procurement at their company is becoming more collaborative with suppliers, according to The Future of Procurement, Making Collaboration Pay Off, by Oxford Economics. Why? Because the pace of business has increased exponentially, and businesses must be able to respond to new market demands with agility and innovation. In this climate, buyers are relying on suppliers more than ever before. And buyers aren’t collaborating with suppliers merely as providers of materials and goods, but as strategic partners that can help create products that are competitive differentiators.

Supplier collaboration itself isn’t new. What’s new is that it’s taken on a much greater urgency and importance.

2. You’re probably not realizing the full collective power of your supplier relationships

Supplier collaboration has always been a function of maintaining a delicate balance between demand and supply. For the most part, the primary focus of the supplier relationship is ensuring the right materials are available at the right time and location. However, sourcing managers with a narrow focus on delivery are missing out on one of the greatest advantages of forging collaborative supplier partnerships: an opportunity to drive synergies that are otherwise perceived as impossible within the confines of the business. The game-changer is when you drive those synergies with thousands, not hundreds of suppliers. Look at the Apple Store as a prime example of collaboration en masse. Without the apps, the iPhone is just another ordinary phone!

3. Collaboration comes in more than one flavor

Suppliers don’t just collaborate with you to provide a critical component or service. They also work with your engineers to help ensure costs are optimized from the buyer’s perspective as well as the supplier’s side. They may even take over the provisioning of an entire end-to-end solution. Or co-design with your R&D team through joint research and development. These forms of collaboration aren’t new, but they are becoming more common and more critical. And they are becoming more impactful, because once you start extending any of these collaboration models to more and more suppliers, your capabilities as a business increase by orders of magnitude. If one good supplier can enable your company to build its brand, expand its reach, and establish its position as a market leader – imagine what’s possible when you work collaboratively with hundreds or thousands of suppliers.

4. Keeping product sustainability top of mind pays off

Facing increasing demand for sustainable products and production, companies are relying on suppliers to answer this new market requirement.

As a sourcing manager, you may need to go outside your comfort zone to think about new, innovative ways to collaborate for achieving sustainability. Recently, I heard from an acquaintance who is a CPO of a leading services company. His organization is currently collaborating with one of the largest suppliers in the world to adhere to regulatory mandates and consumer demand for “lean and green” lightbulbs. Although this approach was interesting to me, what really struck me was his observation on how this co-innovation with the supplier is spawning cost and resource optimization and the delivery of competitive products. As reported by Andrew Winston in The Harvard Business Review, Target and Walmart partnered to launch the Personal Care Sustainability Summit last year. So even competitors are collaborating with each other and with their suppliers in the name of sustainability.

5. Co-marketing is a win-win

Look at your list of suppliers. Does anyone have a brand that is bigger than your company’s? Believe it or not, almost all of us do. So why not seize the opportunity to raise your and your supplier’s brand profile in the marketplace?

Take Intel, for example. The laptop you’re working on right now may very well have an “Intel inside” sticker on it. That’s co-marketing at work. Consistently ranked as one of the world’s top 100 most valuable brands by Millward Brown Optimor, this largest supplier of microprocessors is world-renowned for its technology and innovation. For many companies that buy supplies from Intel, the decision to co-market is a strategic approach to convey that the product is reliable and provides real value for their computing needs.

6. Suppliers get to choose their customers, too

Increased competition for high-performing suppliers is changing the way procurement operates, say 58% of procurement executives in the Oxford Economics study. Buyers have a responsibility to the supplier – and to their CEO – to be a customer of choice. When the economy is going well, you might be able to dictate the supplier’s goods and services – and sometimes even the service delivery model. When times get tough (and they can very quickly), suppliers will typically reevaluate your organization’s needs to see whether they can continue service in a fiscally responsible manner. To secure suppliers’ attention in favorable and challenging economic conditions, your organization should establish collaborative and mutually productive partnerships with them.

7. Suppliers can help simplify operations

Cost optimization will always be one of your performance metrics; however, that is only one small part of the entire puzzle. What will help your organization get noticed is leveraging the supplier relationship to innovate new and better ways of managing the product line and operating the business while balancing risk and cost optimization. Ask yourself: Which functions are no longer needed? Can they be outsourced to a supplier that can perform them better? What can be automated?

8. Suppliers have a better grasp of your sourcing categories than you do

Understand your category like never before so that your organization can realize the full potential of its supplier investments while delivering products that are consistent and of high quality. How? By leveraging the wisdom of your suppliers. To be blunt: they know more than you do. Tap into that knowledge to gain a solid understanding of the product, market category, suppliers’ capabilities, and shifting dynamics in the industry, If a buyer does not understand these areas deeply, no amount of collaboration will empower a supplier to help your company innovate as well as optimize costs and resources.

9. Remember that there’s something in it for you as well

All of us want to do strategic, impactful work. Sourcing managers with aspirations of becoming CPOs should move beyond writing contracts and pushing PO requests by building strategic procurement skill sets. For example, a working knowledge in analytics allows you to choose suppliers that can shape the market and help a product succeed – and can catch the eye of the senior leadership team.

Sundar Kamak is global vice president of solutions marketing at Ariba, an SAP company.

For more on supplier collaboration, read Making Collaboration Pay Off, part of a series on the Future of Procurement, by Oxford Economics.

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Sundar Kamak

About Sundar Kamak

Sundar Kamak is the Vice President of Products & Innovation at SAP Ariba. He is an accomplished Solutions Marketing and Product Management Execuive with 15 + year's broad experience in product strategy, positioning, SaaS, Freemium offering, go-to-market planning and execution.

Transform Or Die: What Will You Do In The Digital Economy?

Scott Feldman and Puneet Suppal

By now, most executives are keenly aware that the digital economy can be either an opportunity or a threat. The question is not whether they should engage their business in it. Rather, it’s how to unleash the power of digital technology while maintaining a healthy business, leveraging existing IT investments, and innovating without disrupting themselves.

Yet most of those executives are shying away Businesspeople in a Meeting --- Image by © Monalyn Gracia/Corbisfrom such a challenge. According to a recent study by MIT Sloan and Capgemini, only 15% of CEOs are executing a digital strategy, even though 90% agree that the digital economy will impact their industry. As these businesses ignore this reality, early adopters of digital transformation are achieving 9% higher revenue creation, 26% greater impact on profitability, and 12% more market valuation.

Why aren’t more leaders willing to transform their business and seize the opportunity of our hyperconnected world? The answer is as simple as human nature. Innately, humans are uncomfortable with the notion of change. We even find comfort in stability and predictability. Unfortunately, the digital economy is none of these – it’s fast and always evolving.

Digital transformation is no longer an option – it’s the imperative

At this moment, we are witnessing an explosion of connections, data, and innovations. And even though this hyperconnectivity has changed the game, customers are radically changing the rules – demanding simple, seamless, and personalized experiences at every touch point.

Billions of people are using social and digital communities to provide services, share insights, and engage in commerce. All the while, new channels for engaging with customers are created, and new ways for making better use of resources are emerging. It is these communities that allow companies to not only give customers what they want, but also align efforts across the business network to maximize value potential.

To seize the opportunities ahead, businesses must go beyond sensors, Big Data, analytics, and social media. More important, they need to reinvent themselves in a manner that is compatible with an increasingly digital world and its inhabitants (a.k.a. your consumers).

Here are a few companies that understand the importance of digital transformation – and are reaping the rewards:

  1. Under Armour:  No longer is this widely popular athletic brand just selling shoes and apparel. They are connecting 38 million people on a digital platform. By focusing on this services side of the business, Under Armour is poised to become a lifestyle advisor and health consultant, using his product side as the enabler.
  1. Port of Hamburg: Europe’s second-largest port is keeping carrier trucks and ships productive around the clock. By fusing facility, weather, and traffic conditions with vehicle availability and shipment schedules, the Port increased container handling capacity by 178% without expanding its physical space.
  1. Haier Asia: This top-ranking multinational consumer electronics and home appliances company decided to disrupt itself before someone else did. The company used a two-prong approach to digital transformation to create a service-based model to seize the potential of changing consumer behaviors and accelerate product development. 
  1. Uber: This startup darling is more than just a taxi service. It is transforming how urban logistics operates through a technology trifecta: Big Data, cloud, and mobile.
  1. American Society of Clinical Oncologists (ASCO): Even nonprofits can benefit from digital transformation. ASCO is transforming care for cancer patients worldwide by consolidating patient information with its CancerLinQ. By unlocking knowledge and value from the 97% of cancer patients who are not involved in clinical trials, healthcare providers can drive better, more data-driven decision making and outcomes.

It’s time to take action 

During the SAP Executive Technology Summit at SAP TechEd on October 19–20, an elite group of CIOs, CTOs, and corporate executives will gather to discuss the challenges of digital transformation and how they can solve them. With the freedom of open, candid, and interactive discussions led by SAP Board Members and senior technology leadership, delegates will exchange ideas on how to get on the right path while leveraging their existing technology infrastructure.

Stay tuned for exclusive insights from this invitation-only event in our next blog!
Scott Feldman is Global Head of the SAP HANA Customer Community at SAP. Connect with him on Twitter @sfeldman0.

Puneet Suppal drives Solution Strategy and Adoption (Customer Innovation & IoT) at SAP Labs. Connect with him on Twitter @puneetsuppal.

 

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Scott Feldman and Puneet Suppal

About Scott Feldman and Puneet Suppal

Scott Feldman is the Head of SAP HANA International Customer Community. Puneet Suppal is the Customer Co-Innovation & Solution Adoption Executive at SAP.

Running Future Cities on Blockchain

Dan Wellers , Raimund Gross and Ulrich Scholl

Building on the Blockchain Framework

Some experts say these seemingly far-future speculations about the possibilities of combining technologies using blockchain are actually both inevitable and imminent:


Democratizing design and manufacturing by enabling individuals and small businesses to buy, sell, share, and digitally remix products affordably while protecting intellectual property rights.
Decentralizing warehousing and logistics by combining autonomous vehicles, 3D printers, and smart contracts to optimize delivery of products and materials, and even to create them on site as needed.
Distributing commerce by mixing virtual reality, 3D scanning and printing, self-driving vehicles, and artificial intelligence into immersive, personalized, on-demand shopping experiences that still protect buyers’ personal and proprietary data.

The City of the Future

Imagine that every agency, building, office, residence, and piece of infrastructure has an entry on a blockchain used as a city’s digital ledger. This “digital twin” could transform the delivery of city services.

For example:

  • Property owners could easily monetize assets by renting rooms, selling solar power back to the grid, and more.
  • Utilities could use customer data and AIs to make energy-saving recommendations, and smart contracts to automatically adjust power usage for greater efficiency.
  • Embedded sensors could sense problems (like a water main break) and alert an AI to send a technician with the right parts, tools, and training.
  • Autonomous vehicles could route themselves to open parking spaces or charging stations, and pay for services safely and automatically.
  • Cities could improve traffic monitoring and routing, saving commuters’ time and fuel while increasing productivity.

Every interaction would be transparent and verifiable, providing more data to analyze for future improvements.


Welcome to the Next Industrial Revolution

When exponential technologies intersect and combine, transformation happens on a massive scale. It’s time to start thinking through outcomes in a disciplined, proactive way to prepare for a future we’re only just beginning to imagine.

Download the executive brief Running Future Cities on Blockchain.


Read the full article Pulling Cities Into The Future With Blockchain

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Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Raimund Gross

About Raimund Gross

Raimund Gross is a solution architect and futurist at SAP Innovation Center Network, where he evaluates emerging technologies and trends to address the challenges of businesses arising from digitization. He is currently evaluating the impact of blockchain for SAP and our enterprise customers.

Ulrich Scholl

About Ulrich Scholl

Ulrich Scholl is Vice President of Industry Cloud and Custom Development at SAP. In this role, Ulrich discovers and implements best practices to help further the understanding and adoption of the SAP portfolio of industry cloud innovations.

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4 Traits Set Digital Leaders Apart From 97% Of The Competition

Vivek Bapat

Like the classic parable of the blind man and the elephant, it seems everyone has a unique take on digital transformation. Some equate digital transformation with emerging technologies, placing their bets on as the Internet of Things, machine learning, and artificial intelligence. Others see it as a way to increase efficiencies and change business processes to accelerate product to market. Some others think of it is a means of strategic differentiation, innovating new business models for serving and engaging their customers. Despite the range of viewpoints, many businesses are still challenged with pragmatically evolving digital in ways that are meaningful, industry-disruptive, and market-leading.

According to a recent study of more than 3,000 senior executives across 17 countries and regions, only a paltry three percent of businesses worldwide have successfully completed enterprise-wide digital transformation initiatives, even though 84% of C-level executives ranks such efforts as “critically important” to the fundamental sustenance of their business.

The most comprehensive global study of its kind, the SAP Center for Business Insight report “SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart,” in collaboration with Oxford Economics, identified the challenges, opportunities, value, and key technologies driving digital transformation. The findings specifically analyzed the performance of “digital leaders” – those who are connecting people, things, and businesses more intelligently, more effectively, and creating punctuated change faster than their less advanced rivals.

After analyzing the data, it was eye-opening to see that only three percent of companies (top 100) are successfully realizing their full potential through digital transformation. However, even more remarkable was that these leaders have four fundamental traits in common, regardless of their region of operation, their size, their organizational structure, or their industry.

We distilled these traits in the hope that others in the early stages of transformation or that are still struggling to find their bearings can embrace these principles in order to succeed. Ultimately I see these leaders as true ambidextrous organizations, managing evolutionary and revolutionary change simultaneously, willing to embrace innovation – not just on the edges of their business, but firmly into their core.

Here are the four traits that set these leaders apart from the rest:

Trait #1: They see digital transformation as truly transformational

An overwhelming majority (96%) of digital leaders view digital transformation as a core business goal that requires a unified digital mindset across the entire enterprise. But instead of allowing individual functions to change at their own pace, digital leaders prefer to evolve the organization to help ensure the success of their digital strategies.

The study found that 56% of these businesses regularly shift their organizational structure, which includes processes, partners, suppliers, and customers, compared to 10% of remaining companies. Plus, 70% actively bring lines of business together through cross-functional processes and technologies.

By creating a firm foundation for transformation, digital leaders are further widening the gap between themselves and their less advanced competitors as they innovate business models that can mitigate emerging risks and seize new opportunities quickly.

Trait #2: They focus on transforming customer-facing functions first

Although most companies believe technology, the pace of change, and growing global competition are the key global trends that will affect everything for years to come, digital leaders are expanding their frame of mind to consider the influence of customer empowerment. Executives who build a momentum of breakthrough innovation and industry transformation are the ones that are moving beyond the high stakes of the market to the activation of complete, end-to-end customer experiences.

In fact, 92% of digital leaders have established sophisticated digital transformation strategies and processes to drive transformational change in customer satisfaction and engagement, compared to 22% of their less mature counterparts. As a result, 70% have realized significant or transformational value from these efforts.

Trait #3: They create a virtuous cycle of digital talent

There’s little doubt that the competition for qualified talent is fierce. But for nearly three-quarters of companies that demonstrate digital-transformation leadership, it is easier to attract and retain talent because they are five times more likely to leverage digitization to change their talent management efforts.

The impact of their efforts goes beyond empowering recruiters to identify best-fit candidates, highlight risk factors and hiring errors, and predict long-term talent needs. Nearly half (48%) of digital leaders understand that they must invest heavily in the development of digital skills and technology to drive revenue, retain productive employees, and create new roles to keep up with their digital maturity over the next two years, compared to 30% of all surveyed executives.

Trait #4: They invest in next-generation technology using a bimodal architecture

A couple years ago, Peter Sondergaard, senior vice president at Gartner and global head of research, observed that “CIOs can’t transform their old IT organization into a digital startup, but they can turn it into a bi-modal IT organization. Forty-five percent of CIOs state they currently have a fast mode of operation, and we predict that 75% of IT organizations will be bimodal in some way by 2017.”

Based on the results of the SAP Center for Business Insight study, Sondergaard’s prediction was spot on. As digital leaders dive into advanced technologies, 72% are using a digital twin of the conventional IT organization to operate efficiently without disruption while refining innovative scenarios to resolve business challenges and integrate them to stay ahead of the competition. Unfortunately, only 30% of less advanced businesses embrace this view.

Working within this bimodal architecture is emboldening digital leaders to take on incredibly progressive technology. For example, the study found that 50% of these firms are using artificial intelligence and machine learning, compared to seven percent of all respondents. They are also leading the adoption curve of Big Data solutions and analytics (94% vs. 60%) and the Internet of Things (76% vs. 52%).

Digital leadership is a practice of balance, not pure digitization

Most executives understand that digital transformation is a critical driver of revenue growth, profitability, and business expansion. However, as digital leaders are proving, digital strategies must deliver a balance of organizational flexibility, forward-looking technology adoption, and bold change. And clearly, this approach is paying dividends for them. They are growing market share, increasing customer satisfaction, improving employee engagement, and, perhaps more important, achieving more profitability than ever before.

For any company looking to catch up to digital leaders, the conversation around digital transformation needs to change immediately to combat three deadly sins: Stop investing in one-off, isolated projects hidden in a single organization. Stop viewing IT as an enabler instead of a strategic partner. Stop walling off the rest of the business from siloed digital successes.

As our study shows, companies that treat their digital transformation as an all-encompassing, all-sharing, and all-knowing business imperative will be the ones that disrupt the competitive landscape and stay ahead of a constantly evolving economy.

Follow me on twitter @vivek_bapat 

For more insight on digital leaders, check out the SAP Center for Business Insight report, conducted in collaboration with Oxford Economics,SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart.”

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Vivek Bapat

About Vivek Bapat

Vivek Bapat is the Senior Vice President, Global Head of Marketing Strategy and Thought Leadership, at SAP. He leads SAP's Global Marketing Strategy, Messaging, Positioning and related Thought Leadership initiatives.