Business Success Relies on Focusing on All Three Areas
Every business goes through cycles. They get started. They expand – sometimes rapidly. They decline. They consolidate. But if they’re not careful navigating the storms that the market and fate throw at them, they could cycle right out of existence. Dave Hopson, managing partner at the information-technology consulting firm Triumphus, teaches businesses how to survive these cycles in his book “Surviving the Business Storm Cycle: How to Weather Your Business’s Ups and Downs.”
All businesses – regardless of whether they treat sick people, make cars, run hotels or sell any other kind of service or product – depend on an equilateral triangle that incorporates highly experienced and capable people, advanced, innovative technology, and a well-defined, robust, flexible and adaptable process.
When People and Processes Are Left Out
These days we have an automated medical system with family-practice clinics spread out across the city or even the state, all tied to a central system at a hospital. This should make health care more efficient, and yet it doesn’t seem to work that way. Administration still can’t get the reports they need on productivity. When they do get them, it looks like productivity is falling rather than going up. More and more work hours are being spent on the same number of patients, so costs are rising. Technology is everywhere, and it’s even integrated with many processes – but each department still functions the way it did before the IT revolution. People and processes haven’t kept up with all the new IT. The business triangle isn’t equilateral and balanced; instead, it’s all wonky, with one angle much larger than the other two.
We find the same thing happening in every department of medical practices. Patient records are now automated, but information doesn’t always go directly into the system; instead, somebody may still be typing in everything from handwritten notes from someone else. Security has its problems, too: hospitals use electronic badges to give staff access where they need to go – but security doesn’t understand who needs to be where in order for the work to get done more efficiently, so the badges may hinder staff from doing their jobs.
The same sort of changes you’ve seen at doctors’ offices have also occurred throughout every business in the United States. That’s how we have made huge production gains over the last 50 years. Businesses have continually introduced new products and capabilities that allow them to do more, yet in many cases they are not actually being more productive. Email has revolutionized communication when compared to mail, fax and phone calls, but how many people today suffer from email overload?
To increase productivity, businesses have automated everything from sales and customer relations to H.R. and production. Accounting has always been automated when it could be, but production is now tied to accounting, and H.R. departments are as well. All these connections were supposed to make everything more efficient – and they did to some extent. Too many times, though, they only automated processes that were no longer the best, fastest and smartest way of doing things. Or, they invested in technology and failed to invest in their people at the same time.
Look at the automobile industry, for example. Back in the 1980s, when American carmakers were increasingly worried about their Japanese competitors, many of Detroit’s companies decided that the best way to beat their rivals would be something they called “lights out manufacturing.” The idea was that factories would become so highly automated that the lights could be turned off, leaving robots to build cars on their own. It never happened, though, because it turned out that Japan’s advantage depended on process and people as much as it did on technology. Meanwhile, American automobile workers felt devalued by the companies’ emphasis on automation, and they no longer took pride in their workmanship. Product reliability suffered. American car manufacturers had to realize that if they wanted to compete with Japan, technology alone wasn’t going to get them where they wanted to be. They were going to have to strengthen and transform all three angles of the business triangle – people, process and technology.
Something similar has taken place in the banking world. Over the last decade or so, more and more banking processes have moved online. Today, we have smartphone apps that allow us to do all sorts of things: we can deposit checks, move money, perform payroll, send a wire, check our balances and even request a loan – all with our smartphones. Just a few years ago, all those things would have required a trip to the bank. There’s no denying that IT has made banking far more convenient – but as users, we have paid a price for that convenience. Those frequent visits we used to make to our banks allowed us to build personal relationships with actual human beings who worked in our local branches. We could expect to be greeted by name when we came in, and our banking needs received personal attention. After the IT revolution, that didn’t happen very often anymore. Meanwhile, banking fees didn’t go down. People couldn’t help but wonder: “If the technology is doing the work, why are we still paying so much?” Small, local banks still gave personal attention – but their IT abilities could be clunky and inefficient. It seemed as if you had to pay a price of some sort, wherever you banked. Banks that had efficient processes and IT were often missing the people element, while banks that had maintained the people element lacked the convenience of modern technology. The banking business ended up with another wonky triangle, just like the health care industry and the Detroit automobile industry did, where people, process and technology weren’t getting the equal attention they needed.
Unfortunately, a lot of businesses haven’t wised up the way the automobile industry and banks have. Many company administrators can see there’s a problem, but they don’t understand what’s causing it. They never look at the people and the processes. They just keep automating old processes. Every department – from marketing to R&D, accounting to human resources, production to administration, and customer service to security – continues to run pretty much the same way they always did. And yet they have the tools they need to build greater efficiency – to become better, faster, smarter – if they would just integrate IT with their processes and people. Instead, they continue to throw more and more technology at the situation, saying to themselves, “If we just had a better piece of technology … or a new piece of software … a new device … then everything would work better.” They act as though technology is the silver bullet that can magically eliminate all their problems.
How to Stay Ahead
Every business goes through cycles, periods of expansion followed by periods of consolidation. If you’re not careful, though, your business cycle could come to an abrupt and final end. Investing in people, process and technology simultaneously is what will allow you to survive the Business Storm Cycle so that it keeps turning around through all its phases and allows your company to not only to survive but also thrive. I95
Dave Hopson, author of “Surviving the Business Storm Cycle: How to Weather Your Business’s Ups and Downs” is the managing partner at Triumphus, which offers IT consulting services to companies from startup through exponential growth to IPO. He has a bachelor’s degree in political science, master’s in international relations and a doctorate in international relations and econometrics. Hopson also served in the Marine Corps.