In an article entitled "CIOs need to re-brand themselves as drivers of digital innovation, says EY's David Nichols,"* Brian Taylor (writing at TechRepublic.com) brings out some important points. He begins by saying, "The role of the CIO is starting to look a lot like a business strategist."
Over the years, as we have worked with an array of small to mid-sized business enterprises in a number of different industries, we have been trying to make the point with our clients that everyone in the business--from the production floor all the way down to the CEO--should be in the role of "business strategist."
Of course, this assumes that the role of the "business strategist" is to find ways to help the company make more money tomorrow than it is making today! When the CIO--or, technology, in general--is involved, we call it "Turning Gee-whiz into R.O.I."
Return on investment (R.O.I.) is what most business owners and investors are after, we think.
Few enterprises anywhere in the world have been more consistent or more successful at producing profits in good times and not-so-good times than Toyota. They have achieved success that dwarfs the Big Three automakers in the U.S. Since sometime in the 1980s, Toyota's market capitalization has been more than the sum of the market capitalization of the U.S. Big Three combined.
Furthermore, for more than three decades, Toyota has produced profits with consistency while the Big Three in the U.S. have had extremely unstable profits and eroding capital over the same period of time.
MAKING EVERYONE A "BUSINESS STRATEGIST"
How has Toyota achieved this stability and success?
Well, as with most things, there are many factors involved. However, it is clear that Toyota places high value on the input managers and executives received from their production-line workers. Workers are encouraged to innovate and find ways to slash away at any work effort that does not add value to the product being delivered to the customer.
Toyota managers and executives firmly believe that no one knows more about the machine--any machine or any system--than the one who "runs" the machine.
Workers in the Toyota Production Systems (TPS), whether implemented in Japan or in the U.S. plants, are encouraged to stop production and call for immediate review by managers and team members any time they identify something unusual--not fitting the standard--affecting the flow or work. (It is a fiction that such stoppages halt the work throughout the plant. Typically such stoppages only affect a small portion of the whole plant, unless the stoppage lasts more than a few minutes or, in some cases, up to several hours.)
The goal, in the TPS "meeting" that occurs when a worker halts production is not "firefighting" to get things running again--as it is in most U.S. facilities. Instead, the focus is two essential matters: 1) identifying as quickly as possible what went wrong at the 'root' of the problem, and 2) figuring out what steps should be taken to prevent such an occurrence ever again.
This calls for the quickly assembled team of managers and production workers to become "business strategists" in the very best sense of the term. They must think, not tactically about how to put the "fire" out, but strategically about what steps should be taken--or, at least, initiated--to assure that quality remains undiminished and the flow of product to their customers is not stopped (or even slowed) by such occurrences.
What is the ultimate focus of every worker or manager participating in the team that assembles to see what went wrong?
Throughput--the continuous flow of product from raw materials to finished product through many value-added steps with as little waste as possible through non-value-added activity.
What is the result of this for Toyota?
Toyota is able to produce a greater variety of products with higher quality and at lower cost than its competitors. It is able to bring new models from the drawing board to production in far shorter time than any of its U.S. or European competitors. And the workers on the line have a better sense of who their customers are and what their customers desire in product and experience of ownership than any of the line workers at the Big Three here in the U.S.
This demonstrates clearly, in my mind, how the Toyota Way makes every employee a "business strategist," and how doing so produces better and more consistent products--not just year after year, but decade after decade. Most U.S. companies can only dream of such stability and success.
APPLYING THESE PRINCIPLES
We are convinced that, when we help small to mid-sized business enterprises begin to apply these same principles and they also begin to create for themselves a process of ongoing improvement (POOGI), these companies with whom we work will become more stable and more successful.
Additionally, if these firms will work extend these practices up and down their supply chains, their supply chains will similarly experience greater stability, lower risk, higher profits and improved ability to bring products to market faster than competing supply chains in their industries.
So, don't stop at turning your CIO into a "business strategist." Take steps beginning today to make everyone in your enterprise a "business strategist." Get them all involved in reducing risk, improving throughput, and help your profits increase and stabilize.
We would be delighted to hear your thoughts on this topic. Please leave your comments here, or feel free to contact us directly, if you'd prefer.
* Taylor, Brian. "CIOs Need to Re-brand Themselves as Drivers of Digital Innovation, Says EY's David Nichols." TechRepublic. TechRepublic.com, 15 Apr. 2014. Web. 17 Apr. 2014.