The July-August 2011 issue of the Harvard Business Review has a very interesting article by Gregory S. Babe the CEO of Bayer MaterialsScience North America on the Creation of a Lean Growth Machine. The article layouts the challenges the organization faced in 2007 and the traditional cost cutting approach the board started with, that most organizations favour. Mr. Babe details a rather different approach that he and his executive team took that saw them spend money initially but achieve the same effective results. The results positioned the company to weather the up and downs of their industry but also the global downturn which followed.
The approach is what makes the article such an interesting read. The message “this wasn’t a cost cutting exercise – it was a growth initiative.” The team followed John Kotter’s eight steps for leading change. One of the tenants they followed was “Simply, Standardize and Automate”. In reading the article I thought Yahoo finally someone is talking about something that is near and dear to us here at VL.
Simply, Standardize and Automate – these are very powerful words. Its our mantra.
The article lays out some numbers which for any self-respecting CEO, CFO or business owner should stand out. I quote from the article…
“We streamlined and eliminated defects in our order-to-cash process to create “no touch” orders. Today we receive more than 70% of our orders electronically, and more than 50% of them aren’t touched. This is better than efficient – its effective. To achieve it, our supply chains have to be flawless. And when we do touch orders, there are typically good reasons from the customer side. (We did not automate customer intimacy out of the equation!) …..we developed change-management skills within the organization….we had to own these processes, and to redesign them in a way we knew could work….Even more valuable, I think, is that many of our reinvented processes and the tools we developed, which were so foreign at the time to our business, have become common place at BMS around the world. No-touch orders are widespread for example. Simply, Standardize and Automate is a phrase everyone uses now. ”
We have been preaching this mantra for years so I was very pleased to see someone actually layout the approach and document the results. The limited information, in the article, on the impact of automation should be an eye opener to CEOs, CFOs and business owners who see automation and integration as a horrible cost of doing business and an unnecessary cost at best.
I have challenged people and companies in our blog articles, on many occasions, to look at automation and data integration as a powerful tool to achieve business growth. We have the tools and the services and most important of all the expertise to help those who want – to take the Simply, Standardize and Automate challenge.