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Advancing innovation in increasingly complex ecosystems
2018 saw a surge not only in technology innovation, but government overreach as security concerns reach an all-time high. But while Europe's new GDPR requirements forced organizations around the globe to re-think their data security practices and re-gain their customers' trust, Data-as-a-Service (Daas) was still a huge theme for organizations looking to do more with their data assets.
Leveraging data analytics is the key to success for any organization, whether they are looking to sell those assets or not. I had the pleasure of interviewing Rick Bingle, SVP of Supply Chain Operations at REI on how organizations can leverage data assets to create more relevant and personalized experiences for their customers. You can read the interview in full below, which was one of 12 interviews conducted for a report in partnership with our sister network, the CMO Council. You can download that research here.
Rapid response to a shifting environment, increasingly-complex data ecosystems, the need for data security and the recognition that there must be a single view of the customer across units has raised the question of organizational complexity and structure. Author Jesse Newton rightly says that organizational structure often creates the lion's share of complexity within an organization. Learn more about his research on how to crush complexity to liberate innovation in the contributed article below.
While you're at it, learn how GDPR is impacting marketing operations here.
Looking forward, 5G is knocking on everyone's door, as the opportunities it presents in the connected economy are inevitable. Still, security concerns are high as we enter into this whole new world. Check out our feature program and contribute your insights on how we can secure the future of a smart world.
Innovation is not just about pushing the envelope of technology. Les Meyer, BPI Advisory Board member shares his insights in the feature article below on the future of behavioral health in the workplace as companies increasingly look to invest in the health and wellness of their employees to improve mental health in the workplace.
This is certainly a vital topic, given new BPI Network research that highlights the parental burnout crisis in corporate America. In fact, over 60 percent of 2,000 parents surveyed report they have experienced some form of parental burnout (PBO). Two of the top three contributors to PBO are job or career-related. Indeed, nearly 30 percent of respondents point to pressure or exhaustion from work or managing the home, and a similar number believe financial concerns, demands or limitations are primary PBO contributors. Check out the feature report.
Check out the content features below, and be sure to check out our required reading and featured events too! Until next year…
Digital Therapeutics: The Future of Behavioral Health
A CEO's Perspective on Enterprise-Wide Agility to Achieve Organizational Excellence
Mental Health in the Workplace: A Call to Action – Team Resilience at Work
Employers are taking aim at workforce behavioral health strategies and accelerating total rewards action plans to improve the mental health in the workplace via high-impact, high-value team resilience solutions that combine the benefits of evidence-based treatment; online learning; and the healing power of groups to achieve a mentally healthy business.
The annual economic costs of mental health have been estimated close to $1 trillion, per year - mostly in indirect costs related to productivity and the higher costs of associated with other medical conditions. The economic costs of mental illness will be more than the combined costs of cancer, diabetes and respiratory ailments. Importantly, chronic pain affects an estimated 100 million Americans, or one third of the U.S. population and it is the primary reason Americans are on disability. In addition, large employers paid for more than $2.6 billion worth of opioid addiction and overdose treatment services in 2016.
Better work life health and wellbeing outcomes are well within reach based on a few favorable developments, but results won't be truly meaningful unless there's a greater realization of the indisputable linkages between a healthy workforce, the value of team resilience in the workplace, a mentally healthy business and a healthy bottom line.
No more business as usual. The nation of workforce "disruptive improvement" is being transformed by disruptive-minded CEOs, CFOs and HR leaders focusing on work life health and wellbeing impact design methods and imaginative innovations that improve everyone's economic wellbeing and quality of life.
The quest for enterprise-wide agility is accelerating, sparking dramatic improvements in quality, innovation, productive advantage and speed to delivering value. Use of disruptive enabling technology is clearly a game-changer as more organizations embrace a total rewards approach to value-based benefit design plans to attract, motivate, engage and retain top talent. It also will help elevate and balance work-life experiences, igniting an innate desire and willingness to empower working Americans to live well and thrive.
Find out how a large technology company in Silicon Valley was able to meet the demand for behavioral health services on a one-to-one basis with economies of scale and meaningful program elements. Discover how "evidence-based digital therapeutics for behavioral health can deliver quantifiable improvements to the health and psychological resilience of your entire workforce.
Les C. Meyer is a serial entrepreneur, global executive leader and MBA with extensive experience in understanding the forces driving mindful innovation, seizing the upside of disruption and leveraging the strategic value of enterprise-wide organization health resilience. His work focuses on transforming health and performance improvement through innovation leadership. He has worked with many organizations to help them achieve strategic agility and resilience alignment organization health goals, behavioral economics objectives and functional wellbeing outcomes via science-based cognitive behavioral therapy and dialectical behavior therapy collective impact ventures, joint mental health and wellbeing in the workplace projects including team resilience at work, mindfulness, vitality and sustainability next practices.
Doing More With Data: a Supply Chain Perspective
Rick Bingle, SVP of Supply Chain for REI
Founded in 1938 by a group of Pacific Northwest mountaineers seeking quality equipment, REI operates retail stores nationwide, two online stores and an adventure travel company called REI Adventures. REI offers products from top brands for camping, climbing, cycling, fitness, hiking, paddling, snow sports and travel, including its own line of outdoor gear and apparel. Senior Vice President of Supply Chain Rick Bingle is responsible for managing and growing the distribution and logistics function in order to provide quality experiences for all REI members. He shares ways in which the company leverages data to ensure they are working effectively to complete business functions and satisfy consumer needs.
"Supply chains are defined differently across different organizations," he says. "At REI, I am accountable for our omni-channel fulfillment strategy, which includes in-store fulfillment, buy online/pick up in store fulfillment and vendor inventory fulfillment. I am also responsible for overall international logistics—moving our private brand's products to each of our supply chain distribution nodes and then to our end-user customers and stores. My responsibilities also include overseeing our call center and how we interact with our customers."
He says his goal is to ensure that customers can have free-form access to the organization through their preferred method.
"The only way to meet our customers' needs is to have a deep understanding of how they interact with operations," he says. "We analyze where they like to purchase, the timing and what information they seek out as they go through the buy-and-receive cycle. The more information we have, the better prepared we are to fulfill their needs and preferences in each interaction."
He says these data insights enable the supply chain team to make strategic operational decisions across the company about how and where to position inventory.
"All of the data about our customers—including how loyal they are, where they like to shop, how often they shop and whether they buy full-price items or look for promos—allows us to pull together a deployment strategy that fits our customers' needs," he says.
REI is a membership-driven organization, which provides a significant advantage in terms of gaining data insights.
"When a customer creates a member profile, we are able to see all of the data around that individual shopper and their history with us," he says. "We can then pull that data and analyze it through different lenses. The marketing group can look at it in ways to create frequency, action and retention. In the supply chain, I seek out customer data that focuses on transaction fulfillment and timeliness."
He says that transactional data connecting back to an individual member is instrumental in elevating the supply chain process.
"Every company has transactional data, but I am able to connect that data back to an individual member," he says. "I can get down to the level of granularity that allows me to analyze, for example, how cyclists tend to buy at a certain time of year in a given location and whether or not I am meeting the needs of those cyclists in terms of inventory fulfillment."
He says the challenge for his team is not the sources of data, but rather the inferences they are able to achieve from the data.
"Our challenge isn't so much the absence of data but how quickly can we review the data and create inferences from it," he says.
In retail, it is vital for supply chain and operations to listen to both marketing and merchandising. However, each team still uses its own unique tools, making collaboration more difficult.
"The idea of bringing all of the key voices together to create a unified conversation is a real challenge in any retail environment today," he says. "Each department has its data streams, but we need to unify those streams to drive a conversation that keeps the entire organization working together toward a unified goal."
In an ideal world, he says he could sit down with the divisional leads of marketing, merchandising, product, retail and operations and easily connect all of the disparate information from them to create a holistic understanding of how everything comes together. In the absence of a system that unifies them, he says they have collaborative, cross-divisional conversations that allow them to constantly tweak their alignment.
These conversations are held in the form of bi-weekly, cross-functional meetings in which the teams analyze sales trends in both a backward- and forward-looking way. The operating plan is set up through the lens of how to drive frequency and customer traffic, establish the product plan, lay out what will be on sale and when, and analyze customer communications through digital versus in-store.
"The merchandisers talk about the product plan, the marketing team talks about their engagement tactics, the retail team talks about strategy, and the operations team needs to ensure that we have the capacity to meet the expectations raised in the conversation," he says.
REI differentiates itself as a company through the experiences they are able to create online and in stores.
"We are able to differentiate ourselves on the experience side, so part of what we ask is how we should differentiate ourselves in our operations," he says. "If we believe our real differentiation is in the experience, then we need to ask ourselves about our own customer transactions and understand whether we are meeting market expectations."
He says this drives a very different conversation relative to the data.
"We have set up call customer transaction models, and we analyze the individual transaction that the customer goes through from their point of view," he says. "This is a real shift from how the supply chain tends to think about a 'perfect order,' which is one where we fulfill an order on time and with no errors. Our customer transaction model allows us not only to see the transaction, but also to marry it to customer expectations so that we can make a fundamental difference to our customers."
He says there are hundreds of measures around how to look at logistics, but organizations that have superior supply chains focus on just a handful of data points that really change the outcome, whether for customers or financially. At REI, they look at four unique measurements.
"We measure expense percent, cost per unit, units per hour and our critical customer transaction models," he says. "To move the needle in operations, we need to have robust measures around receiving processing, production, shipment and quality. By looking at the three financial components, as our product mix changes, we can understand how our team is optimizing the bottom line. By adding the customer component, we are able to connect our customer needs to our company needs."
He says their data analysts have aggregated a number of tools that are helping to make this process far easier.
"We have been on a path for about two years to merge our product data and our customer data into one place," he says. "This enables us to bring together our operations and customer data, and by having this data in one place, we are better able to create a unified perspective around the data."
He says the biggest difference around data insights comes in hiring the right people.
"REI has made a conscious effort for the last several years to elevate the importance of analytics," he says. "We have always been product-oriented; our goal is to get people into the outdoors through our products. However, we realize that it is not just about putting a great product on the shelf. It is also about our ability to meet customer expectations by analyzing what we see in the data."
He says they started by bringing in analysts, which allowed them to begin identifying data gaps. Then, they sought out tools that could bridge those gaps. The next piece is to integrate artificial intelligence.
"We are not looking to replace our analysts with AI, but rather empower them with it," he says. "AI enables us to address many more issues each day, and it accelerates the ability for our analysts to extract, communicate and potentially change strategies. Analysts now have tools to visualize data and bring it all together in one queue, thereby facilitating cross-functional collaboration. Now, organizations need to think about creating horsepower behind the scenes that accelerates the analyst."
This interview was one of 12 interviews of leading executives across marketing, commerce, supply chain and data for a report done in partnership with our sister network, the CMO Council. To purchase the full report, including all interviews in full and 20 charts and graphs from a survey of 165 executives, or to download a free executive summary, visit: https://cmocouncil.org/thought-leadership/reports/doing-more-with-data.
Contributed Article
How the Vine of Complexity Strangles Innovation
As organizations grow in size they often become complex, complicated messes. More and more structures, middle managers, coordinating functions, metrics, reports, and templates are added to enable control and transparency of performance across the expanding web of sub-businesses. This incrementally increases complexity within a business and inevitably creates an environment that strangles rich innovation, productivity and engagement.
In a recent study 74% of respondents rated their organization as complex. In this digital age, when technology is fueling rapid changes in consumer preferences and reshaping industries, it is critical that companies innovate well and fast. Companies that are bogged down in slow decision making, risk intolerance, and siloed protectionism are destined to fail.
Fueling the propagating nature of complexity are the 20th century organization structures and management practices that many organizations are holding onto. These 20th century business practices are characterized by dense bureaucratic structures and strict, formal processes with rules and more rules. Traditional best practices told us that we need detailed descriptions of all roles, responsibilities, reporting relationships, decision rights, processes, and rules to get anything done. These things were needed because humans weren't to be trusted. Installing detailed strict structures meant that leaders could control the output of their people, thereby limiting the risk of mistakes and establishing a baseline of quality. So, as companies grew, they added more and more structures and gradually became complicated messes. The average employee in one of these organizations spends the majority of their day going from one low value meeting to the next, while attempting to stay on top of the mountain of emails that flow into the inbox. These activities distract our focus and soak up time and energy, which significantly limits our ability to engage in deep innovative thinking.
Figure 1. Traditional 20th century vertical hierarchy
But there is hope! Let's take a big step back and look at our businesses through the lens of simplicity. Let's take a blank sheet of paper and redesign how work gets done so that we can liberate the intelligence, energy and passions of our people. Let's get laser focused on the few things that truly matter most. A good place to start is chunking out the redesign into categories; strategy, structure, process, systems, and culture.
As organizations grow they often expand into new business units and geographies. They identify new opportunities to diversify a product, go into a peripheral business, and/or enter new markets. They also can acquire other companies to add capability, broaden a product portfolio, or become more vertically integrated. All of this expansion has traditionally resulted in a lot more complexity. More layers separating leaders from the front line, more coordinating groups and an increasingly convoluted communications web leads to strategic focus becoming hazy. A helpful exercise at this level is critically reviewing the strategy. Where and how will the company win in the current and future marketplaces? Once there is clarity on the strategy an analysis of all existing business units needs to be completed and all that are detracting the company from realizing its strategy should be disbanded. Often, this exercise is the first thing a new transformational leader completes upon entering a failing organization. Steve Jobs famously did this at Apple. When he rejoined the company in 1997 he quickly set about quickly reducing the 20+ product groups to four. He transformed Apple from a company that had a presence in every industry segment to one that produced a few products that changed the world.
Organizational structure often creates the lion's share of complexity within a company. The 20th century lines and boxes vertical hierarchy was and is the key culprit. The model treats people like cogs in a machine where their output should be controlled and measured. This creates an environment that breeds a reactionary, instruction following workforce that is riddled with anxiety due to success being determined by a manager's performance review, and is hyper intra competitive as people vie for more power. But there are emerging models that serve to liberate innovation and productivity through providing a high degree of autonomous collaboration. Small teams are assembled with clear parameters set on objectives, timeframes and resources. They then work independently to deliver the objective in any way they see fit. This model is sometimes referred to an "agile organization" or "holacracy" and is being adopted by more and more organizations.
Identifying and defining how work gets done and the various hand-offs or interactions across roles has delivered a ton of value over the past century. But we are now arriving at a time where we have become too process heavy and are often reliant on a defined process being present to complete a task. I would encourage the identification of processes or activities that are currently too taxing or time consuming and look for ways to remove process steps or redesign them to make them simpler and more impactful. Do any of these often unnecessarily convoluted or time consuming processes sound familiar?
Performance management process
Annual budgeting process
Travel book and expense processing
Given the speed of technology development it is no wonder that organizations often have a rich mosaic of different IT systems that somehow work together. The implication for the employee is that they have to navigate through four systems to find the information they need to get their work done. This can generate significant complexity and slow productivity. A helpful exercise to undergo is to review how all systems can be simplified and decluttered. What opportunities are there to reduce the number of clicks that people need to make to find what they need? How can content be simplified by reducing words, adding images / videos and deleting sub-pages? I would encourage companies to take advantage of the system interface options out there like Slack, Facebooks' Workplace or Office 365 that can help to consolidate and simplify how people find information, connect with colleagues and monitor strategic data.
Do any of these cultural traits sound familiar?
Management by committee: Decisions are made by multiple individuals and consensus is required, slowing productivity.
Multiple checks and balances: Decisions have to pass through multiple rounds of approvals, which inhibits speed and can discourage innovation.
Pursuit of perfection: A strong desire to avoid mistakes leads to unnecessary over-analysis of every piece of work, resulting in wasted time.
Engage everyone: Meetings are scheduled to keep broad stakeholder groups informed of work that is being completed, resulting in excessive low-value meetings that absorb time.
Organizational cultures can clearly foster norms that drive debilitating complexity. Removing these traits can be achieved by distilling a list of desired behaviors and then reinforcing them through a range of mechanisms, including employing a set influential leaders to model the behaviors and introducing hard stops to prohibit reverting to old ways of working.
What if we could take a fresh look at our businesses, reconsider what is really important, and start to focus our time and energy on those things that matter most. Imagine the positive effect it would have on your people if you told them they now have permission to do more of the work they were hired for. Imagine their sense of liberation if you removed a big chunk of the activities that soak up their time and gave them freedom to think, innovate and execute.
The time is right to simplify work.
Jesse Newton is the author of Simplify Work; Crushing Complexity to Liberate Innovation, Productivity and Engagement. He is the founder and CEO of Simplify Work; a global management consulting firm that helps organizations throw off the shackles of debilitating complexity and reignite top performance.
jnewton@simplifywork.com
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