Operational Innovation !! Technology is here but Culture Needs to Evolve!

Through the travels of the last 2 months talking with many of the leading companies in mining and other industries the concept of “Operational Innovation” is a hidden objective. Why is it hidden because it is not natural for innovation to driven from all parts of the business, companies have a habit of centralizing it. Actually we can all contribute to innovational improvement to the way to take on, execute our “jobs to be done” during the day.

There is always ways to improve, but the key item I see being missed is the “culture not just innovates, and try”, but capture this and embed it. Innovation is about lifting constraints of risk to enabling trying to change items with improvements, yes this means making “failure” as a success measure. When I say failure people look at me twice in the industrial space. But I am talking constructive failure e.g. freeing people up with an environment where they can try new ideas on improving their job, and this experiment/ trial is done in a safe none intrusive environment into the plants operations. But the user is able to allocate time, and feels empowered to come up with ideas, and try them. Once the improvement is validated and tested, the ability capture this and embed it for consistency across plants and teams. Diagnram below comes from ARC comparing the effects of embedding processes vs manual implimentation this takes a significant leap even further ahead if you build in operational innovation culture and systems into your industrail operations. 

This is a step change in thinking in the manufacturing environment but the technologies exist today to embed operational processes (which is where there is huge opportunity to reduce variance across plants and teams). Example is the ability to put a simulator/ operator training system in place, as not just a trainer but as a bigger opportunity as environment to enable operational workers to go in a test a new idea, it is real, but a safe environment and measured improvement can recorded. I have seen one company use it with two or 3 of their best operators to put them through the same situation and capture the workflow/ process they took to resolve the situation, and then look to come up with an embedded process which they will put back into their system.

This is similar to what happened on Apollo 13 where they used the simulator to test the start up sequence over and over again until they go it correct, it formed an operational process. What we saying today and you can see in the diagram below the significant value increases in operational improvement come from enabling all people to innovate and contribute and feel like they can contribute in a constructive way. By embedding the process you are moving to a sustainable process, that is model driven.

You will hear many of us in Invensys talk about Dynamic Performance Measures and I will evolve on these in the next couple of weeks as the concept involves aligning strategy, with a context measure and the supporting actions to take that activity to success. Yes a DPM is a part of the activity discussion of last week.

The key learning I hearing around the world is that in the industrial space people and culture is not aligned with innovation, it is about insurance, avoid risk, why not look at the opportunity through safe environments and constructive safe trailing. Providing a frameowrk and environment for improvment and reduction in operational risk through consistency and alignment, and building on proven best practices.

Next week I want to start working through the Central vs decentralized management, and how it is really a combination of boat and key is putting things in context of the users role, an area people talk about but they miss.