I'm curious and a bit puzzled. Genuinely.
McKinsey published the attached article entitled 'The next generation operating model for the digital world' in March this year. 2017.
In it, they talk with their usual well-supported authority about the need to break down operational/organisational siloes and to approach business development from a customer experience and/or customer journey perspective. This, they advocate, is the new approach to creating the next generation operation model appropriate for a digital world.
I couldn't agree more with the guidance. We absolutely should be designing businesses around customer journeys and ensuring they are seamlessly excellent, both in terms of the experience offered and the operational interactions needed to deliver it.
What puzzles me is why this advice is still needed? (And it clearly is!)
Even though today, employees are better connected than ever and in real time, I can certainly see how it's a challenge to ensure a coherent and co-ordinated operational approach in larger organisations. As more and more new technology is introduced to businesss functions and individual units or subsidiaries, it's hard for anyone to stay on top of it all. The very fact that the job title 'enterprise architect' now exists within the IT teams of many large organisations is proof of the increasing scale of this challenge.
There is no one-stop shop technological solution for what most businesses face, and so we're all plugging in and interfacing with more and more digital solutions to assist us with particular tasks. We're often doing this in isolation of each other, not realising that colleagues may already have a great solution for the same need that we've just identified and spent money on.
In some cases, we're not even bothering properly to disable 'old tech' as we download and embed the new stuff. As AI and machine learning inevitably become more commonplace for many of us, this challenge will no doubt increase further.
However, with absolutely no criticism implied, McKinsey and many of their fellow management consultancy peers were providing this anti-silo, end-to-end focused, customer-centric advice to businesses reviewing their operational effectiveness over 15 years ago, long before the digital reality of today's business environment was envisaged.
I know this because they provided this very same advice to a very large business where I was working in the early 2000's. In those days, we were using different software programmes and different analytical approaches to each other, we were focusing on different priorities to demonstrate success, and we were building different solutions in isolated teams but aiming to solve similar problems. Not very organised or efficient. Definitely not cost-effective. McKinsey told us to stop it and how. It was good advice then and much needed. The results were positive.
So why as a business community are we needing to be reminded of this again today?
Did we never manage to successfully and permanently break down those siloes first time around?
Or as businesses, did we lose sight of this need in the rapidly occurring new challenges that digital business has presented? In the scramble to get a handle on 'digital', did we take our eye off our 'organisational effectiveness' training?
Or are today's newcomer businesses just not so well-versed in organisational effectiveness as their incumbent peers? Is this message aimed more at them?
I think it's less a problem with the newcomers and the examples McKinsey use in the attached article indicates that they are not the target audience of the advice it carries.
In my experience, the startup community tend to nail coherent and integrated operations more easily - largely as a benefit of being new, small and well-connected with each other, as well as being increasingly data- and data-analytics-confident. Whether we then lose sight of this and compromise greater operational integrity as we scale rapidly is a question that would be interesting to explore. Getting it right is certainly something that requires good internal discipline, rigorously applied.
So have the bigger and more established businesses amongst us have got a little bit too excited about the technological art of the possible, such that we've forgotten to join the dots between our various respective working parts? McKinsey seem to be saying exactly that. It is, after all, pretty much the same advice that they used to guide us over 15 years ago.
And of course, it's not just about joining up operational dots. It's about ensuring that the data from all those joined dots is used to optimum benefit for each business. The more integrated and co-ordinated the approach a business takes to its operations, the more accurate the information it receives. Today's digital tools open up a wealth of invaluable data that we could never have dreamed of in 2000.
This could be great news for all those holding strategy, business development and project management titles in large organisations: McKinsey's just given you the focus and budget justification for your next OE project. And by the looks of things, it's not going to be a short or simple one to undertake and deliver. In fact, if you're a pretty big business, you might well need a McKinsey or one of its peers to help out.
What's very clear is that 'digital tools' can't solve this one alone. People lie at the heart of this solution. You won't be able to achieve success in isolation either. This isn't the responsibility of one team to deliver. It's going to take company-wide buy-in and on-going participation to make it a success.
And we definitely need to keep training each other not to forget this anti-silo, organisational integration and customer-focused guidance. Otherwise, I think we can expect McKinsey to be publishing the same advice yet again in the not too distant future.
A simple way to visualize this operating model is to think of it as having two parts, each requiring companies to adopt major changes in the way they work: The first part involves a shift from running uncoordinated efforts within siloes to launching an integrated operational-improvement program organized around customer journeys (the set of interactions a customer has with a company when making a purchase or receiving services) as well as the internal journeys (end-to-end processes inside the company)... The second part is a shift from using individual technologies, operations capabilities, and approaches in a piecemeal manner inside siloes to applying them to journeys in combination and in the right sequence to achieve compound impact.