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Want to improve your BELOW-AVERAGE

business processes? – Innovate don’t invent
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The CXO reads through the dismal process from scratch. The “invent”
results from the customer satisfaction approach goes something like this.
survey. Another indication that his The CXO assigns a team of “experts”
department is performing below average. to solve the problem and then asks
Why can they not improve? He is working them to report back in several months
night and day to fix the problems, but with a new process design. The team
his department is still spending way interviews as many people as possible
too much money and his customers are and then locks themselves away to
still deeply unhappy. The CXO knows design a better solution and then re-
that his business processes badly need emerge to test out their new ideas. Corey Billington
to be fixed but with all this constant fire Does the new process work? In our IMD Professor of
Procurement and
fighting there is just no time or money experience, sometimes – if you are Operations Management
to get the job done. How can he improve lucky. Usually it either offers only
his department’s business processes minor technical improvements and
quickly and cheaply? customers barely notice the difference,
Sound familiar? Do you have processes or it is radically different but simply
that your customers describe as unworkable.
below average? Are you struggling for The bottom line is that inventing is hard.
a breakthrough improvement? Don’t It requires lots of time, a fair amount of
worry, you are not alone. Business investment, smart people, and a great
processes are notoriously difficult deal of serendipity. But there is an
to re-engineer and 50 to 70% of re- easier way…
engineering efforts fail to achieve the Dr Rhoda Davidson
2 IMD Program Manager
dramatic results that were intended. Much better to innovate
Partnership Programs
What would you say if we offered you a
cheap and fast way to make all of your The alternative to inventing is to look
business processes above average? outside your company and “borrow”
Interested? The answer is to innovate by ideas from others. We have found
bringing in ideas from other companies, that using this technique a team can
industries, or contexts and then rapidly typically redesign a relatively simple
incorporate them into a better process business process in a couple of days
design. Using these techniques we and a more complex set of interrelated
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have worked with clients to achieve processes in a week.
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a 10:1 return on investment. But first After all, there is a strong probability
let’s see why the majority of attempts at that a company in the FT100 or the
business process redesign fail. CAC40 has a better business process
than yours. So if, like many CXO’s,
The problem with inventing you already know that your business
processes are average at best then
The typical mistake that managers don’t wait until these processes grind to
make is to redesign the broken business a halt through neglect. Get innovating!
 Hold a design event selling tailored solutions to their customers. So
the team invited knowledge brokers from IBM,
The first steps are straightforward: Oracle, Mercury Software, HP and Cisco. And as
• Pinpoint a process or a set of processes that none of these companies were competing directly
need overhauling. Start with ones that your with the bank, they were happy to share their
internal or external customers would describe knowledge.
as “must-fix.” Remember that business How does brokering function? Typically the
processes are more than just the routines knowledge broker joins the team by phone or
embedded in IT systems, such as the order- video conference for one hour. During the first
to-cash. Almost every task performed in a 10 to 15 minutes the broker simply tells his or
business is linked into a repeatable process. her own story as it relates to the process that the
All of these processes are ripe for redesign. team is redesigning and describes the “must-dos”
We are not talking • Put together a stakeholder team of 8 to 10 and the pitfalls. Then it is up to the team to ask
about a cut and people from all the functions and departments questions. During this conversation the team taps
paste solution that that are part of the process or are impacted by it. into knowledge that is not written down anywhere
can be lifted from • Schedule an off-site design event. Typically and that is largely impossible to transfer without
one environment to three or four days are enough to deal with dialogue. Much of this knowledge may be obvious
most processes. to the broker but not obvious to the team struggling
another. This process
There are no hard and fast rules about the with their redesign challenge.
is closer to a product
exact agenda for the design event. But there are Is this the same as best practise transfer or
design event.
three critical ingredients: knowledge brokering benchmarking? Well, no. We are not talking
(borrowing new ideas), rapid prototyping about a cut and paste solution that can be lifted
(brainstorming the new process) and collective from one environment to another. As mentioned,
intelligence (voting for what will work). this process is closer to a product design event.
Of course some process elements may work
1. Knowledge brokering to bring in new ideas “as is” but other elements that have worked for
Knowledge brokering is the process of taking an the knowledge broker need to be filtered out. In
idea from one context and applying it in a not-so- many cases the team can combine ideas from the
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obvious way to another. For instance, a team from broker with their existing ideas to produce a much
a wholesale bank was working on an initiative to better process. Or brokers may not bring any
move the bank from selling low margin commodity useful ideas but simply speaking to them helps
products to high margin solution-selling to trigger-off or unlock a good idea from one of the
their key accounts. So they looked for industries team members.
which are already excellent at solution selling. The richest source of knowledge brokers comes
They discovered that high technology service from industries where being good at the process
companies compete fiercely for market share by is required for survival. For instance, a team
from a private bank was redesigning the process
of opening up offices in emerging markets,
100% 8hea[h_d]YedjWYj so they spoke to brokers from McDonald’s
= world class = 80% process competence Industry B
and from a chain of pizza restaurants. Why?
Good at process
Because, in the fast-food industry being able to
open up restaurants quickly and efficiently gives
hWda_d]e\ 8hea[h_d] companies a significant competitive advantage.
fheY[iiYecf[j[dY[ fej[dj_Wb_jo
= 80% Industry A It is this difference in process competence
Not so good
at process between industries which creates the potential for
borrowing good ideas (Fig. 1).
9ecfWdoh[Z[i_]d_d]fheY[ii
= 30% process competence To find good brokers you need to think laterally
0%
so that you can tap not-so-obvious sources. For
0% e\YecfWd_[i 100% instance, a team from a European retail bank
_d_dZkijho
wanted to improve customer queuing in their
branches. So they looked at other industries
Figure 1: Knowledge brokering potential where queuing is a major issue and where efficient
Want to improve your below-average business processes? – Innovate don’t invent

queuing is a requirement for success. They talked no obligation to use all or any of these concepts but
to Tesco about their one-in-front process, to Disney in the end the team recombined several elements
about the fast-pass, and to Woolworths about taken from the brokers with their own ideas to
mobile tills. All these brokers provided the team create a much improved process.
with potential ideas that they could incorporate One question that we are often asked is, “How can
into their redesigned queuing process. There was we find good knowledge brokers if we don’t have
contacts with people in other companies?” Well,
you might be surprised to find out that there are
Sources for knowledge brokers armies of willing knowledge brokers out there
• Suppliers are probably the best source that most executives would not think of (see box).
of brokering opportunities, particularly
those that work closely in partnership 2. Brainstorm the new process with rapid
with your company. And the good news is prototyping There are no hard 
that they are usually delighted to help.
The second important element of your design and fast rules about
• Potential suppliers that are keen to make event is to incorporate rapid prototyping. This when to use knowledge
your business their business are usually forces the team to quickly put together a potential brokering relative
more than willing to explain exactly how “answer” to the problem and then to either throw to rapid prototyping,
they can make an in-company process away, refine or upgrade. It is the norm of product
except that the two
more effective and efficient. They can also 6
design companies such as IDEO and essential
be a great source of more radical ideas. should take place close
in any business process design event. The basic
in time if the team is
• Customers may be prepared to share message of rapid prototyping is “do it rather than
to incorporate and
their business processes on the basis talk about doing it.” When prototyping, use sub-
recombine the best
that it will make you a better supplier and groups to work in parallel on the same process
so in turn help their business. design and then bring the prototypes together in ideas effectively.
a final version.
• Value-based brokering: There are some
business processes where managers are At the heart of rapid prototyping are iterative
attracted to work in these areas because cycles of divergent and then convergent thinking.
they support a higher moral cause and During the divergent phases the team brainstorms
hence are happy to share their knowledge in a non-judgmental way to uncover conscious and
and experience with other companies. unconscious ideas that might form part of any
Good examples are processes such as solution. Then during the convergent phases the
responsible procurement, diversity in the team sorts, groups, matches and melds these
workforce, or environmental processes. ideas into a coherent concept. The key is to set
• Functional-based brokering: When short deadlines to create energy in the team and
the process being redesigned is located to push people’s thinking.
within a particular business function then There are no hard and fast rules about when to use
there is always the opportunity to access knowledge brokering relative to rapid prototyping,
brokers through industry associations, except that the two should take place close in time
for example, processes located in human if the team is to incorporate and recombine the
resources, finance, procurement, or best ideas effectively – ideally within 48 hours. If
shared services. the process being worked on is unfamiliar to the
• Professionals are a good source of team then start with several knowledge brokering
brokering knowledge, although you will conversations before moving to rapid prototyping.
probably need to pay for their time. Beginning with brokering stimulates the divergent
phases of prototyping by bringing in new ideas
• Brokering swap: One concept that is
that can be re-deployed immediately. High levels
definitely worth considering is a knowledge
of immersion foster creative thought and spark
brokering swap. Look for companies who
have a world-class version of the process innovation when pieces of knowledge from diverse
under redesign and then find out if there is sources interact.
a process that this company would like to If the team is already familiar with the process
learn about in exchange. then go ahead and start prototyping. Stopping at
various points to talk to brokers has the effect of
bringing in new perspectives that break the team’s Don’t wait – implement
conventional thinking and enhances the innovation
process. Then the team can either choose to Of course, once the team has redesigned the
design a completely different approach made up process then it still has to be implemented. But
of a combination of new ideas from brokers. Or in contrast to many business process change
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choose to recombine some of these ideas with efforts that fail, there is now a committed set of
parts of the existing process or with their own new key stakeholders who are convinced that the new
ideas to create a solution. Finally, the team can solution will work. They are ready and willing to
also use brokers at the end of prototyping to check convince others and get the job done.
whether the new process is realistic. Final piece of advice; don’t strive for perfection.
Listening to brokers talk about their experiences The new process does not have to be flawless,
also provides emotional support to the team, just significantly better than the existing process.
giving them the confidence to redesign their own So think of each process redesign in terms of a
process. Somehow it feels less daunting after number of limited releases that create momentum
talking to “real people” who have struggled with but at the same time reduce execution anxiety.
similar issues. Implement as soon as you can then like all good
software developers, note down the remaining
3. Vote for the ideas that work with collective issues and start working on release two.
intelligence So the next time you see an important business
The final vital element of any design event relies on process that is not functioning effectively or
the principle that groups of people are more often efficiently, don’t wait until your department hits
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correct than lone experts. During prototyping a crisis. Use innovation to borrow-with-pride
each subgroup gives and receives feedback on from people who have already done the hard
the other subgroups’ designs. Feedback takes work for you.
the form of silent voting using green stickers for
prototype elements that are “good ideas” and red Professor Corey Billington is the Program Director of
stickers for elements that are “really bad ideas.” the IMD Booster Program – a tailor-made partnership
This form of collective intelligence ensures that the program where he works with companies to design
best ideas make it through to the final prototype innovative process solutions for a wide variety of
and that the bad ideas quietly die without debate, business problems. For more information contact
argument or ill will. [email protected] or [email protected].

1 CXO could signify the head of finance, marketing, supply 4 Experience of the authors working with teams on the IMD

IMD is committed to environmental sustainability and fully offsets its CO2 footprint with Carbonfund.
chain, sales or shared services. Booster Program
5 Hargadon, A. (1998) California Management Review, 40,
2 Varghese, C. 2004. Resolving the process paradox: A
209-227.
strategy for launching meaningful business process
6 IDEO techniques – www.ideo.com
improvement. Cost Engineering, 146, p13-21.
7 Surowoecki, J. (2004) The Wisdom of Crowds. Doubleday,
3 This figure comes from our experience working with teams Random House.
on the IMD Booster Program and is similar to the returns 8 Business process redesign efforts frequently fail because
generated by product designers using open innovation little attention is paid to the people side of the change effort
processes - see Innocentive: www.innocentive.com – Harrington, H. J. (1998) TQM Magazine, 10, 69-71.

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