Happy 2019! You’ve probably been deluged with articles about top trends and predictions for 2019. I believe that business conditions have evolved to a world of permanent talent shortages. As business becomes increasingly digital, skilled programmers are in great demand. You must invest in attracting and retaining world-class talent, but it will only get harder.
Therefore, in 2019, you must also invest in ensuring that your existing talent is doing what you hired them for. Anything else is a waste of your resources. Yet, very few organizational leaders actually take the time to write down a plan that clearly identifies and targets activities that you won’t be doing at this time in 2020. Although it sounds counterintuitive, figuring out how to do less should be one of your highest priorities in 2019. How should you go about “doing less?”
Start with your day-to-day operations
It may seem obvious, but day-to-day operations are where employees spend most of their time. Look around you at the routine, everyday activities that employees perform. I guarantee you’ll find dozens of opportunities to change what employees do every day. Here are three areas to consider:
1. Eliminate unnecessary tasks
Obviously, if you can completely stop doing specific activities, that’s an easy win. However, I hope your employees are primarily working on things that are necessary for the business and there aren’t many activities to eliminate.
2. Outsource non-core tasks
Outsource non-core activities when possible. Benefits management and IT helpdesk support are likely not activities that differentiate your products to customers. If you haven’t already done so, consider outsourcing some of these tasks so you free up people to work on the things that matter.
3. Invest in process automation
Computers are winning at Jeopardy, diagnosing diseases and driving cars. With automated core processes, you can drive 50 percent or greater cost reductions. More importantly, you will jettison outdated business practices, free employees from tedious, manual tasks and allow them to focus on work that matters.
Once you examine your operations, it’s usually easy to quickly find opportunities where business process automation reduces work and saves time. Here are some examples from customers I’ve worked with:
A K-12 school district found that teachers wasted time chasing down supervisors for approvals. For example, finding approval for a scheduled trip or purchase requisition. An inexpensive, automated solution has eliminated this time-consuming step and teachers now spend more of their time teaching.
A medical practice digitized its most common patient intake forms. Now, patients complete information electronically. Office staff no longer has to check for errors and doctors gain a crtically important 2-4 hours per week since they aren’t waiting on paperwork. That means doctors spend more time caring for patients.
At an independent living provider, the new hire onboarding packet had grown to 40 items due to regulatory requirements. It took hours to complete, and HR staff had to double-check everything, re-enter data into systems and file W-4 and I-9 forms. The electronic process reduced this to just 30 minutes. Now, HR focuses on making the new hire productive.
A construction company found that purchase orders took lengthy periods of time. That’s because people used wrong part numbers or unit prices – information that’s available electronically in SQL. They now have an automated PO process that connects to SQL, populates it and eliminates mistakes. As a result, employees aren’t waiting around for parts and projects get done faster.
Sound familiar? I’ve seen examples like this everywhere and your organization is probably no exception. I also know that it’s almost impossible to change unless you, as an organizational leader, make this an explicit priority.
Inexpensive, simple tools are already available
Modern workflow software makes process automation accessible to everyone. I’ve already written about visual, low-code platforms that make it easy to automate without hiring expensive programmers. There’s no reason to wait and you owe it to yourself to get started today.
The war for talent is real and permanent – the winners will be those organizations that can attract, retain and make the most of the talent available to them. Stop wasting employee time on manual processes with workarounds.
Process automation using a modern, visual platform has the potential to be a game-changer for your organization. If you’re smart, you’ll reinvest the savings into digital initiatives so you can continue to reap the benefits of digital transformation.
Digitization opens enormous opportunities for tackling the world’s sustainability challenges. Already today, digital technologies including drones, sensors, GPS, and big data crunching algorithms are critical in illuminating (and addressing) the world’s social and environmental challenges. iNaturalist, for example, is crowdsourcing millions of environmental data points from individuals with smartphone apps to better understand species and the ecosystems they inhabit. The STAMP2 project, which stands for Sensor Technology and Analytics to Monitor, Predict, and Protect Ebola Patients, is using technology to tackle disease in Africa. Wireless sensor networks are improving water management in dry regions around the globe.
But beyond providing scientists, doctors, and resource managers with better information, digitization is also transforming entire industries, holding out the possibility of dramatically improving their social and environmental performance. An emerging area of opportunity is the digitization of physical products and production.
What Is a Product?
To understand digital’s potential impact on the physical world of products, we need to first recognize that any product can be conceptualized as a combination of three elements: matter, energy, and information. A shoe, for example, is composed of a number of materials including leather, rubber, metal, and cloth. The materials in a shoe take on specific forms dictated by the product designer’s choices. These choices represent information that is encoded in a product’s blueprints and designs. This “information” puts the form in a product’s materials. The process of actually forming materials, like shaping raw rubber into a shoe sole, requires energy. Every transformation of materials is thus the application of energy guided by information. The result at the end of the process is a physical artifact that can deliver value to a customer.
Economists reading this may notice the absence of a historically important factor of production: labor. While it is not going away in a digitized world, the quantity and character of human labor is shifting. The rise of manufacturing robots, 3-D printing, and other automation trends means less physical human labor is demanded. Physical labor is being replaced by the mental labor of working designers, engineers, and programmers that is embedded as design and process information. In a digitized future, an ever-shrinking role for physical human labor promises that three factors — energy, information, and matter — will dominate.
Three Elements of Product Conceptualization
The process of forming materials, like shaping raw rubber into a shoe sole, requires energy. Every transformation of materials is thus the application of energy guided by information.
Labor is historically found in both design and in transforming energy elements of the product formula. Slaves once provided transforming energy, then artisans and factory hands. But, with a growing number of digital applications, such as 3-D printing, human physical labor for transformation is minimal.
In our shoe example, leather becomes designed uppers, rubber becomes designed soles, metal becomes designed eyelets, and cloth becomes designed laces. Together they combine to create a designed shoe.
Digitization can and is influencing every element in this equation, changing not only what is produced but also how. In many instances, digitization is reducing the environmental impact of products across industries. More than that, digitization and the product equation constitute an invaluable framework for thinking and acting strategically about the sustainability of your products and business.
The product formula helps explain why certain types of digitization led to market transformations before others. In the dot-com days of the mid-1990s, digitization first hit information-based products like newspapers, books, photography, music, and other media.
Digitization then affected information-rich service businesses like travel, banking, accounting, and education where value came from not merely distributing information but manipulating it in new ways that create value for customers. Digitization is now upending middlemen retailers, taxi fleets, hotel chains, and other sectors with physical assets. In the transportation sector, for example, IT platforms now enable a variety of ride-sharing services. In the near future, AI-powered autonomous vehicles will likely disrupt (or catalyze) the new incumbents, like Uber and Lyft, by reducing their need for human drivers. Because value in these sectors comes primarily from managing information about assets, they are vulnerable to digital business models that can capture more and better information and apply it more effectively.
The potential environmental benefits in these examples derive from digitization’s effects on the three product elements. Blockbuster’s digital demise, for example, came through disintermediating informational value delivery from the underlying materials. Video streaming substituted for the production and distribution of physical VHS tapes and DVDs, obviating the need for Blockbuster stores and inventory and replacing it with Netflix, Hulu, and Amazon Prime video streaming. Arguably, environmental sustainability performance gains came from the reduction in materials and energy needed to deliver the entertainment value customers want. While network streaming services require energy-intensive server farms, overall more and better information substituted for the materials and energy used in the old brick-and-mortar business model.
The Environmental Sustainability Formula
How can digitization minimize the environmental impact of the product sphere? Very basically, environmental sustainability performance improves as the quantity of raw materials and energy needed to deliver the product’s functional value to the customer is reduced. Performance can also improve by substituting different types of materials used for production, like swapping synthetic fibers for endangered mink fur, and substituting the types of energy used, like renewable power for oil and gas.
So how do we use the materials+information+energy=products formulation to think strategically about improving sustainability performance? We can start by recognizing the environmental impacts resulting from the use of the three elements.
Environmental impacts from materials arise through the extraction, processing, use, and disposal of resources. An economic copper deposit, for instance, is less than 1% copper, which means 99% percent of the excavated rock becomes waste. This explains why mines are usually massive holes in the ground visible from space, with enormous piles of debris surrounding them. According to a 2015 study, only about half of the resources extracted annually end up in a production or construction process, and two-thirds of that volume is generated as waste each year. Despite the growing interest in the circular economy, less than 8% is currently recycled. We call what we do mass production, but from a material perspective, it is mass destruction.
Environmental impacts from energy come primarily from the fact that our economy relies on fossil fuels. Ecosystem degradation begins with fossil fuel extraction. Think mountaintop-removal coal mining and the denuded moonscapes of the Canadian oil sands. The combustion of fossil fuels for energy generation then releases pollutants like acid-rain precursors sulfur and nitrogen and particulates that cause lung cancer. And yes, combusted carbon builds up in the atmosphere as CO2, causing global climate change and ocean acidification.
We illustrate the potential environmental performance gains from digitization using the Blockbuster example. In effect, Netflix was substituting more and better design information for much of the energy and matter needed in the Blockbuster model. This was made possible by the growth of the internet and the resultant digitization of media distribution. Digital design reduced the energy and matter needed to deliver an entertaining film to customers. Functionally, the same product was provided to customers, but much of its physical attributes had become digitized.
Potential Environmental Performance Gains From Digitization
This example illustrates the performance gains that Netflix realized from digitization by substituting more and better design information for much of the energy and matter needed in Blockbuster’s model.
Sustainability gains, like those shown in “Potential Environmental Performance Gains From Digitization,” are just first-order benefits. Digitization, by bringing more and better information into the design of product and product systems, can play even bigger roles, as we will discuss in upcoming installments.
What is clear is that the intersection of digitalization and sustainability is also the intersection of corporate strategy, digital strategies, and sustainability strategies. While much C-suite anxiety is currently focused on strategic digital threats to today’s business, executives have to be careful not to overlook the sustainability opportunities digitization portends. Marrying corporate strategy with environmental sustainability through digitization is going to be a multibillion-dollar market opportunity. Business leaders can help ensure that a digital future is also a sustainable and profitable one in a variety of ways, such as facilitating a circular economy, tackling climate change, improving worker health and safety, and enhancing transparency and community relations.