Successful Workplace

The following was first published on the Harvard Business Review.

To stay competitive, organizations need to continually find opportunities for innovation in key processes such as customer service and product development, and adoption of a new process almost always requires the implementation of new information technology. In his 1990 classic HBR article “Reengineering Work: Don’t Automate, Obliterate,” Michael Hammer argued that IT must drive radical process innovation.

Unfortunately, this creates two problems. First, as Hammer argued, these large investments in new IT systems tend to deliver disappointing results, largely because companies tend to use technology to mechanize old ways of doing business. That is, they leave the existing processes intact and use computers simply to speed them up, rather than redesign them from scratch.

Second, they don’t take enough advantage of the innovative abilities of their people themselves. Employees often feel victimized rather than energized by the changes. They’re subjected to retraining, and they have to radically alter their routines, often in ways that they don’t think will work as well. Hammer nonetheless argued for using the power of information technology to redesign a cross-functional process, then deal with the people issues. Though many workers will resist a new process imposed on them, competitive demands need to override resistance. I heard him say, “We will carry the wounded but shoot the stragglers.”

Front-line employees driving change

Hammer’s thinking was very powerful, but I’d challenge that last point. The best way to solve both of these problems — and make innovation efforts stick — is not to impose a new process or technology system, but rather have front-line employees drive the change. You’ll get fewer stragglers, and end up with better ideas — ideas that come from the people who do the work every day and see the most glaring problems. Avoiding a new technology may not be an option, but it shouldn’t come first.

Look at ING, a leading bank in the Netherlands, which sets about process improvement by first getting its employees to recommend changes, ideally in short iterations and with frequent feedback loops, to avoid depleting people’s energy and to decrease the likelihood of going too far down the wrong path.

David Bogaerts and Jael Schuyer are process improvement experts in ING’s IT and operations group. They say their projects are more successful when they follow the sequence of people, then process, then technology. “If you automate too quickly, you don’t find out what the front-line people need,” they explained to me recently. “We stay with manual workflows longer than others. Until you have a clear idea of what people need, you may automate workarounds and waste. For example, we worked with people in our Automating Department to improve their processes (using “Lean” and “Agile” methods), and we are now looking at technology to further improve the processes in ways that will revolutionize them.”

ING acknowledges that it has occasionally neglected to engage workers adequately, with disappointing results. “In the case of a workflow management software project, we bought the tool and told people to use it,” Bogaerts and Schuyer said. “It was technology first, then process, then people, and it didn’t work very well.”

Enterprise implementations

No doubt new technology systems can help bring about dramatic process improvements, no matter how much employees howl about the change. Yet organizations that implement an enterprise system (ERP, CRM, SCM, etc.) frequently underestimate the costs of front-line resistance. The systems force people to change the way they work, and while they eventually adapt, most implementations are delayed, operations suffer temporarily, and revenue can take a hit, as at Hershey Foods and Lumber Liquidators.

Why not tap into their expertise instead of dragging them along? Your investments will be better spent, and your workforce is much more likely to buy into the whole thing. As Bogaerts and Schuyer said to me, when workers identify improvements in their jobs, a new computer system appears as an opportunity to eliminate waste and better serve customers, not as a threat.

Engaging workers as drivers of process changes may seem like it’s slowing things down, particularly in implementing a revolutionary enterprise system. But what’s your alternative? You either pay upfront and get worker ownership and sustainability of changes, or you pay later to get buy-in and overcome resistance. The ride is much smoother when you can have your workers be drivers, not passengers.

Questions: How have you seen organizations use IT to drive process innovation? Were front-line people the drivers or the victims?