High-tech tools alone cannot increase productivity
We are surrounded by advanced tools for creating and testing products. They not only change the economy of innovation and workflow, but also expand the scope of the possible.
Aircraft and cars can be created, modeled and simulated using computer programs even before testing the first prototypes. Complex architectural structures undergo a virtual load-bearing test before the first concrete is poured. Engineers can walk around virtual factories before the development of workflows is complete. The CRISPR tool allows you to disable genes or change their functions, replacing the letters in the DNA code. In a recent article, we co-wrote about achievements in the field of running controlled business experiments using sophisticated analytical tools.
And while such progress is very inspiring, tools - no matter how cool they are - do not automatically bring benefits to the organization. They need to be integrated into existing processes and procedures. They are embedded both in the organization and in the work of the people who manage them. Being incorrectly integrated, they can even slow down the process.
In my research, I found several pitfalls that organizations that implement similar tools can fall into.
Do not use new tools as a mechanical replacement for old ones. When new modeling and simulation tools appear, their proponents usually argue that replacing virtual prototypes with physical ones will save millions. In fact, money is saved - but at the same time, companies do not pay attention to the great opportunities that these tools provide. For example, a complete reorganization of work processes associated with product development. One of the managers explained this by the example of morning traffic. Even on a Ferrari, you won’t be able to get home from work faster if you don’t find a new path that takes into account the advantages of a new car - speed and acceleration. Likewise, companies cannot unleash the full potential of new tools unless they find new ways to work with them.
When I worked with a company that developed analog chips, I talked with senior managers and engineers in search of innovative approaches to using detailed data on the operation of their equipment and the chips they make. We used the data to develop complex statistical models that reflected the possibilities of their production, and built them into tools that simulated development. These tools were then used by managers. Before that, engineers had to develop circuits with large tolerances, which were supposed to guarantee the possibility of creating microcircuits, but at the same time reduced speed and increased the cost of production. After embedding data on production capabilities into development tools, these tolerances were significantly reduced. As a result, speed increased, cost fell.
But this required the development of new ways to combine design and production. In production, it was necessary to collect and frequently update data. It was necessary to believe that the models embedded in the development tools did not diverge from reality and would not lead to a decrease in returns. Production was to quickly track and report all necessary changes and adjustments.
Build a trust system. The speed of technological development often exceeds the speed at which people change their habits. If the enterprise’s knowledge base depends on the use of certain materials and tools, engineers will not be able to easily part with their knowledge or change their working methods in one night.
In that company with the chips, the manufacturers really did not want to admit that reducing tolerances would not affect the quality of the product. It was difficult to calculate the overall effect, but the general wanted to run a few experiments anyway. If they worked, the technology would give them an edge over the competition. Moreover, many competitors did not have their own production, and therefore access to detailed production data. Manufacturers were convinced of the effectiveness of the system, only after seeing impressive results.
In the same way, people were in no hurry to accept the test results obtained on computer simulations, since they had worked with physical prototypes for years. In one company, the introduction of computer simulation tools led to an increase in the cost of developing a product - because people didn’t trust computers, they started building more prototypes just to verify the simulations. In some cases, virtual tests are really a bad substitute for real ones - but often, managers simply fail to build trust.
Look for new ways to create value. New tools provide new opportunities for interaction with partners. By giving users access to analytic tools, Google has changed the advertising market. Apple’s application development tools have turned users into developers and created a large market from which Apple has a profit. You can create value by finding new ways in which users and customers can play a more active role in innovation and workflows. To do this, you need to put the know-how of the company into the tools and enable customers to develop and "produce" solutions for themselves.
Credit Suisse has created a platform on which customers can create their own financial products. By automating security checks and devoting development work to customers, the company reduced development costs by 95%, increased profitability and freed up resources for innovation. Hundreds of unique products are created every day, and the value of the platform has grown.
Having changed the idea of how it can become more valuable for customers, the bank and its customers create solutions that did not exist before.
Advanced tools can change the way you create innovation and workflows. But this potential is revealed by the way you manage these tools and the people who work with them.