Four User Factors (4U’s) as the Market Definer in the New Age

Classical marketing hypothesized the importance of 4P’s in how marketing is positioned and made successful in the marketplace. These 4P’s are Product (or Service), Place, Price, and Promotion. Together, these are called marketing mix that influence the success of marketing. Many of the successes of marketing (as also failures) are related to the manner in which a company manages (or mismanages) its marketing mix. That said, not all the 4P’s are equally important for all types of products and services. For example, for a product like cake, the taste, variety and freshness of cakes and the location which favors instant cake purchase are far more important than price or promotion. However, in the case of a restaurant the culinary offerings, the location of the restaurant including the parking space, the pricing of the dishes over a spectrum, and the novelty as well as the intensity with which the restaurant is promoted are all equally important.

Classic marketing, therefore, proposed a three phase approach to successful marketing comprising market research to define the 4P’s, a product and service development plan and a marketing strategy that designs and executes the marketing mix. The issue with this approach is that it has been developed in the pre-Internet and pre-globalization era wherein the 4P’s offered considerable leverage for differentiation. The Internet and globalization have completely altered how the products are designed, developed and used. The 4P’s while continuing to be relevant at a product level are overtaken by another set of user related factors. These are user expectations, user experience, user loyalty and user prosperity. The contemporary marketing mix moves the centre of gravity towards this set of factors internal to the user, from factors that are external to the user. These contemporary factors are discussed as the 4U’s of marketing in the Internet era.   

User expectations

The earlier era required companies to deploy a posse of market researchers to approach potential customers with sets of questions and hypotheses and develop a required product or service profile based on the research. Today’s user, however, is much more well informed of what is likely to emerge out of technological trends and even has a better awareness of his or her own expectations. A plethora of industry exhibitions and events as well as company announcements and indications build up user expectations. Today’s product development leads any latent consumer needs. User expectations are set ahead of product launches than as a result of product launch. As companies outline their emerging technologies and future products far ahead of launch, user expectations also build up exponentially. There are several examples of such lead times.

Ford India has announced its compact SUV, Ecosport more than a year ago, even as car magazines are full of similar new automobile features, months ahead of the likely launch dates. Movie houses are no longer secretive about their new productions. Launch and audio events are held months ahead, with openness. Futuristic generations of smart phones are announced even as the latest ones are launched.  Even infrastructure projects highlight the upcoming architectural features proudly, for example Mori Tower in Tokyo or Burj Tower in Dubai. Product definitions, ahead of launches, set user expectations. There is now a new responsibility on corporations to define what they can deliver in future, by accelerated design rather than by accidental default. The free availability of information on the Internet has immeasurably helped this process of setting user expectations, universally without any distinction of rural or urban, or even the poor and the rich.

User experience

Products or services are governed by features and specifications which provide functionality and performance. In the Internet era, a whole new concept of user experience has emerged. Whether it is improvement of hardware or software, user experience has a whole new definition for users. There are expectations out of not only the product as a whole but out of each of the components. The expectations of an automobile user today are manifold, from the starting and gliding ease to power and fuel economy, from strength and safety to style and elegance, and from comfort and convenience to capacity and connectivity.  Products of new generation technologies have even more exacting expectations; the scrolling and swiping smoothness of a smart phone must be matched by processing and multi-tasking capability, the connectivity capability by the imaging competence and the hardware strength by application count.

User experience, however, is much beyond features and specifications. The ultimate user experience is achieved when a product design enables the most complex operations to be performed in the most simplistic fashion. This, in turn, is achieved when innovative features of a product are capable of being handled by the user in an intuitive manner. The first use of an equipment or device must, by itself, act as a guidance manual for the user. Apple products score impressively on this nature of user experience dimension. The look and feel, and the overall user experience of any Apple device clearly set it apart from any other device. User experience is based on the designers imagining the way users are likely to use a product and converting the user functionality into user experience. This is a higher level challenge than just designing a product. User experience, being a design factor rather than a marketing factor, it is likely that future battles in intellectual property domain are fought on the platform of user experience.

User loyalty

User loyalty is the third of the U factors. Promotion, the fourth P of the marketing mix, is the factor that develops a brand around a product or service, creating perceptions around it. However, sustainable user loyalty is a function of the user experience and the corporation’s marketing mix, especially price in respect of products and price as well as location in respect of services. In general, promotion helps a firm more to switch customer loyalty than retain customer loyalty.  However, promotion also can reinforce user loyalty as long as it is able to skillfully weave perceptions around user experience.  Promotion is more than advertising. It is simulating user experience, and connecting products and services through user experience. The emphasis of the automobile industry in advanced countries on display of vehicles, and test drives shows how user experience can make a difference to user loyalty, ahead and independent of purchase.

There are two concepts that are at the core of user loyalty as new products get launched by the firm and its competitors. The first is the loyalty retaining user experience. The second is the loyalty retaining user price. Tata Motors has recently launched a plan to retain customer loyalty on these two dimensions. First, it has substantially upgraded its Manza sedan integrating several luxury features into the car. Second, the company provided an assured buyback of Manza at sixty percent of the price after three years (potentially in exchange for another Tata car). In certain product categories, a third dimension of operating assurance would be required. Automobiles, white goods and other equipment subject to wear and tear over time are particularly supported by continued after-sales service.  As opposed to product-specific user experience, after sales service tends to be a firm level capability; Toyota, for example, scores over most competitors in terms of after sales service.

User prosperity 

User prosperity is the foundation on which marketing segmentation and market skimming strategies have been based ever since marketing evolved as a management discipline, decades ago. The real definition of user prosperity, however, must be in universalizing of prosperity, rather than its isolation. In emerging markets, especially, the concept of user prosperity has become opportunistic and in some cases even exploitative. Burgeoning prices of luxury products is a clear example of this unhealthy trend. One may say that there is nothing wrong in inherited rich and nouveau rich buying an imported luxury car at a million dollar price. One may even argue, rather speciously, that the price of an imported car which bears over 200 percent of duties and taxes helps the buyer add revenue to the government exchequer! The argument is intrinsically flawed because not only such purchases increase conspicuous extravagance but also reduce employment generation. The purchase of one such large car takes away from the hands of the purchaser the power to purchase as many as three to five cars or use the money thus released for other productive purposes and generate additional employment.

This trend of extravagance is becoming rampant across ages and generations, unfortunately. A sum of Rs 40,000 represents one equated monthly installment (EMI) on a home loan of a young person. In this age, the typical young person of Young India is willing to sacrifice one EMI every year on a smart phone! And so is a gadget-enslaved older generation that is following such a trend.  Unfortunately, neither generation uses even a fractional amount of the ‘smartness’ that a smart phone possesses. Real user prosperity occurs when each product or service helps the user become more productive and thus generate more national wealth. The key for firms here is a focus on the productive aspects of technology rather than the cosmetic aspects of technology. User prosperity that gets generated out of productive technology is far more enduring than that is generated wholly out of cosmetic technology. It is important that firms and users focus on productive leaps in technology than incremental cosmetics to support the market skimming strategies. It is also equally important that such productive technology is diffused into the lower end products as well so that productivity driven prosperity is facilitated across income and demographic levels.

4U’s, with 4P’s   

Classic thinking positions the product or the service as the focus, with the 4P’s as the core of marketing mix. Neo thinking must position the user as the focus of the marketing mix, with 4U’s as the enablers. It is important that we realize the continued importance of 4P’s of product, price, place and promotion even as we shift the paradigm around the user with the 4U’s of user expectations, user experience, user loyalty and user prosperity. The result would be an enhancement of user productivity, universally enabled alongside generation of national wealth, equitably distributed.

Posted by Dr CB Rao on April 28, 2013               

 

Human Attributes in Technical Lens: Effective Expectations with Practical Limits

Human being is characterized by an ability and a need to socialize. The dependence on, and relationship with, other human beings is one of the key shapers of human relations in an organization. While individual plays a very significant role in organizational performance, his or her performance as a member is dependent on his or her social characteristics. There are many efforts to describe the social skills or personality traits. Broad spectrum descriptors such as extrovert or introvert and narrow spectrum adjectives such as adaptive, flexible, aggressive, docile are often used to characterize personality types, and encourage people develop on the lines relevant to their teams, and the organizations. In each case, these are further described by several other adjectives or sentences, which lead to considerable ambiguity.

The issue with the use of general language is that many of these words are general purpose and open ended. For example, when one says adaptability is a desired characteristic, questions arise as to “how adaptable is adaptable”. More fundamentally, the question is whether it is unquestionably desirable to be adaptable without any limits. Several other descriptors raise similar doubts. For example, does it pay to be uncompromisingly tough when dealing with business partners across a negotiating table? The actual business practice, in due course, lets people know the desirable and avoidable limits. Still, the need to have better descriptors at a fundamental level remains. In this context, certain scientific and technical terms become useful as powerful descriptors of appropriate personality traits, and in some cases the organizational constructs themselves.  

Ductility

Ductility is the characteristic of certain metals that enables them be converted into fine threads. Most precious metals like gold and silver possess this property. This property enables the precious metals to be shaped into intricate jewels, enhancing the desirability and value. Individuals in organizations also need to be ductile, to be able to be drawn by experienced mentors and leaders into strands that hold the teams and organization together. Ductile persons are persons who can wade through cross-functional complexities of an organization, and hold the different sub-units together.  Like a master craftsman who understands the limits to ductility of a metal, the expert coach also understands the appropriate limits to ductility to which a person can be subjected to.

Malleability

Malleability is the characteristic of a metal that enables it to be pressed or formed (or occasionally hit) into different shapes without breaking or cracking. From a people perspective, malleability denotes the ability to be influenced or changed. Malleability is the most important characteristic that needs to be possessed by an individual who enters an organization after general purpose education or experience in another organization. Malleability helps a person fit into different roles of an organization or acquire new skills to be integrated. As with metals, however, extreme malleability does not provide any strength to the person. The leader who mentors the malleable person also knows the extent to which he or she can be molded without losing the basic characteristics of the person.    

Osmosis

Osmosis is the gradual passing of a liquid through a membrane as a result of which desired levels of dissolved substances or particulates are held back at or moved across the membrane.  In a people perspective, it reflects the gradual process of learning or being influenced by someone, as a result of close contact. Osmosis is a key aspect of organizational learning. An experienced leader acts as an effective membrane which lets only the noble characteristics of an individual pass into the organization. An individual who comes in with multiple experiences, some virtuous and some toxic, is rendered virtually toxin-free with well designed induction and learning programs at the hands of experienced leaders that act as osmotic programs of organizational purity and efficacy. The Japanese system of Sempai-Kohai is a great example of virtuous organizational osmosis, and needs to be adapted.

Eutectic point

A eutectic system is a mixture of chemical compounds or elements that has a single chemical composition that solidifies at a lower temperature than any other composition. This composition is known as the eutectic composition and the temperature is known as the eutectic temperature. On a phase diagram the intersection of the eutectic temperature and the eutectic composition gives the eutectic point. An organization is also a eutectic system wherein persons of diverse backgrounds are brought together to form a single union. An ability to understand the characteristics of different people and the conditions under which teams can effectively coalesce is a prime requirement of organization designers and organizational leadership. At an individual level, different educational and experiential perspectives can be amalgamated into a solid personality when the individual is treated as a eutectic system.

 

Semiconductor

A semiconductor is a solid substance that conducts electricity under certain conditions. Semiconductor chips as we know constitute the core of electronics and digital revolution. A semiconductor is neither insular nor conductor, and is itself a eutectic system. A mature executive in an organization is also like a semiconductor, letting the right amount of data, information and cultural inputs pass through him or her. He or she is also verily the chip which provides the processing power to the organization and also becomes the storehouse of institutionalized knowledge. Individuals and organizations would, however, do well to remember that just as continuous upgrades in chips (dual core, quad core) enhance processing power, the individual capabilities need to be continuously upgraded to enable progressively higher business competitiveness.  

 

 Impedance

Impedance defines and measures the resistance of a component or system to the flow of current. All individuals, teams and organizations unfortunately suffer from a level of impedance. Just as electrical impedance varies between different types of circuits (series and parallel) and has real and imaginary components (resistance and reactance), organizational impedance also varies by the design of organizational structures, the positioning and repositioning of cross-functional teams, the conductors used (the individuals deployed) and the leadership power that serves as the organizational motive power. Clearly, in the delivery of organizational goals and conduct of organizational processes, appropriate design of organizational circuitry is mandated.

Enthalpy

Enthalpy is a measure of the total energy of a thermodynamic system. It includes the internal energy, which is the energy required to create a system, and the amount of energy required to make room for it by displacing its environment and establishing its volume and pressure. An organization is truly a thermodynamic system that is driven by heat energy and works in the environment with competitive output. The energy of an organization is akin to the enthalpy of a thermodynamic system. The greater the enthalpy in an organization the greater will be the organizational effectiveness. Like enthalpy in thermodynamic systems, organizational enthalpy needs to be measured by the change in energy level. The greater the change in organizational enthalpy the greater will be its competitive advantage. Individuals need to increased levels of enthalpy to contribute to greater organizational enthalpy.

 

Entropy  

Entropy is the energy that is available in the system but cannot do work. Entropy in statistical mechanics is a measure of the number of specific ways in which a system may be arranged, often taken to be a measure of "disorder"; the higher the entropy, the higher the disorder. The entropy of an isolated system never decreases, because isolated systems spontaneously evolve towards thermodynamic equilibrium—the state of maximum entropy.  The concept of entropy has valuable reference as organizations become larger in scale. Builders of organizations need to find out ways to minimize disorder in organizations as they grow larger in scale and how the organizations have higher enthalpy and lower entropy. Individuals do need to remember that as organizations become larger, the focus on individuals reduces, in the process increasing both disorder and entropy levels. Individuals and organizations need to minimize entropy as much as they need to maximize enthalpy.

Organization as a powerhouse

Organizations are manmade. Given that they are at one level structural designs and at another level they are human, they act as thermodynamic systems at one level and at another level do think, behave and act as human beings. The key concept is that elements of science and engineering apply to organizations and individuals as much as they do to physical systems and their components. Organization designers and business leaders must devise approaches to maximize the productive energy of their organizations, and the people therein, as thermodynamic systems. Viewing organizations and the personality traits of teams through a technical lens, as discussed in this blog, provides a novel framework for sustainable organizational energy.

Posted by Dr CB Rao on April 21, 2013   

Self-actualization by One’s Self for Oneself: An Enlightened Process for the Elusive Goal

Self-actualization is defined as the process of using one’s skills and abilities and achieving as much as one can possibly achieve. Spiritual texts as well as management theories advocate a person living a completely fulfilled life. Management texts require a person to direct his or her efforts to generate material wealth for consumer satisfaction while spiritual texts require a person to redirect his or her self to attain salvation as the ultimate fulfillment. The best part of one’s years, even by spiritualism, are to be utilized by a person to develop his or her capabilities, and generate livelihood for his or her family, and in the process also contribute to society and generate wealth for the nation. It is important for one to, therefore, actualize oneself prior to seeking salvation.   

It is generally assumed that self-actualization is dependent on only skills and competencies as well as knowledge and experience. These are considered necessary for one to progress in career and become what one is completely capable of in professional life. These are, however, merely tools that need to be understood in their perspective and used appropriately in one’s process of self-actualization. The key is that one has to familiarize with oneself, prior to hoping to actualize oneself. Self-actualization is dependent on ten aspects of one’s self, namely, self-awareness, self-appraisal, self-confidence, self-control, self-development, self-discipline, self-expression, self-improvement, self-motivation, and self-respect.  These ten approaches together constitute an enlightened process to achieve the typically elusive goal of self-actualization, as discussed below.

Self-awareness

Self-awareness reflects the knowledge and understanding of one’s character and capabilities. People possess capabilities and attributes that play a role in how they contribute to their organizations but they also often face gaps and deficiencies with respect to their particular organizational and environmental contexts. Lack of awareness of strengths lead to sub-optimized or diffident efforts while lack of awareness of the gaps leads to misdirected or self-opinionated efforts; neither of this leading to self-actualization. Self-awareness is the basic foundation on which the superstructure of self-actualization can be built. There are several tools and methodologies to understand oneself but none of these would be useful unless one has the openness of the mind and heart to conduct an honest self-appraisal.

Self-appraisal

Self-appraisal is the act or ability of judging one’s own capabilities, attitudes, work and performance, among others. Self-appraisal needs to be honest, clinical and objective but also practical and empathetic. Self-appraisal should not lead to either narcissism or denial. Self-appraisal requires, as a starting point, goals that are owned by the individual based on his or her capabilities and aptitudes. The process of self-appraisal itself requires a keen observation of what the environment requires of one, how others are matching up to the requirements, and how one is performing against these myriad requirements and variables. Self-appraisal is not only an analytical capability but also a behavioral attribute. The personality attribute that enables an honest self-appraisal is self-confidence. 

Self-confidence

Self-confidence is the belief in oneself and one’s abilities. Self-confidence is based on a clear understanding of one’s self-worth. Self-confidence needs to be a personalized, finely ingrained characteristic that draws reinforcement from one’s strengths but does not border on egoism or arrogance. Self-confidence enables a person not to be distracted by the vicissitudes of the short term and instead focus on the long term goals of self-actualization. Self-confidence enables a person to focus on what needs to be done to achieve goals, and not be complacent or shaken by the successes or failures, respectively, of the past. Self-confidence is a synergistic characteristic that spreads cheer and strength in teams and organizations. Together with the other nine characteristics, self-confidence is probably the most profound characteristic of an enduring leader. Self-confidence requires significant self-control.

Self-control

Self-control is the ability to remain calm and composed, and not show one’s emotions despite internal or external triggers. Human being is an emotional being. Organizations and societies, being agglomerations of individuals of diverse backgrounds and aspirations, are bound to cause multiple triggers that bring out both positive and negative emotions in human beings. As members of disciplined organizations and societies, all individuals must practice self-control as an attribute that promotes and institutionalizes discipline. The ability to self-control is also dependent on an ability to self-correct whenever an unacceptable variation is detected. Self-control does not mean an unemotional or robotic state; rather it requires an ability to display emotions to the extent required to perfect processes and performance.         

Self-development

Self-development is the process by which a person’s character and abilities are developed. Self-development does not mean development of oneself wholly by oneself. It must be construed as the development of self by oneself as well as with others’ inputs. Many leaders are self-made. They truly experience their living, absorbing learning inputs all through and developing themselves in the process. They are also cognizant of their responsibility of developing others along with their own development. The moment learning stops development stops and progress also halts. Continuous self-development is essential for self-realization and self-actualization. Self-development is both intra-curricular and extra-curricular. Many progressive institutes offer structured programs of extra-curricular development for their students. Organizations could make extra-curricular learning a part of the regular training and development initiatives.

Self-discipline

Self-discipline is the ability of a person to stay on the right course despite exceptional challenges, obstacles, temptations or inducements. Mahatma Gandhi is the ultimate example of self-discipline who never swerved from the path of non-violence and the goal of winning independence for India despite the autocratic alien rule. Self-discipline is always preferable to imposed discipline. As Gandhi’s leadership demonstrates, his principles of simplicity and discipline inspired millions to transform their behaviors and lives to support the Indian independence movement.  Self-discipline helps one institutionalize ethics, values and conduct in organizations and societies. Self-discipline, when it becomes an organizational and social ethic, enables focus, compliance, quality, safety, productivity and, in short, all the metrics of competitiveness that can make India a great power.

Self-expression

Self-expression is the expression of one’s thoughts and feelings without fear or favor but with responsibility and accountability. The benchmark of a vibrant organization is the ability to pool together different viewpoints, discuss and analyze and accept the best views. Individuals who have the ability to express their thoughts and feelings in a positive and constructive way help the spread of knowledge in an organization and also gain the stature to be analysts and spokespersons. Constructive self-expression not only reflects leadership but also helps the individual set the bar of public scrutiny higher. Self-expression must be a sustainable experience associated with a person rather than an emotive unpredictable occurrence.  Self-expression must be calibrated, contextual and analytical to be impactful.  

Self-improvement

Self-improvement is the process by which a person improves one’s knowledge, character and status, largely through one’s own efforts. A scientist’s experiments constitute a classic example of how a person can improve one’s ideas and knowledge by repeated and analytical application of knowledge. Self-improvement is more arduous and challenging than learning from others. The advantage of self-improvement is that the person can have a whole spectrum of people to observe, interact and learn from. Self-improvement is also a process in which serendipity plays a surprising but useful role in discovery of new facts and expanding the boundaries of knowledge. Scientific and technological professionals can, in fact, achieve a lot by focusing on self-improvement as an integral part of their day to day routine.  

Self-motivation

Self-motivation is the ability of a person to motivate himself, or herself, to work hard and excel, relying on internal drive without depending on external encouragement. Motivation is the process of making somebody do something that is especially hard and challenging. While motivating others is difficult, motivating oneself is even more challenging. Yet, on closer analysis, all motivation eventually has to be self-driven. While there are several motivational theories, tools and techniques, and there are also trainers for motivating people, the real urge for motivation has to come from within. Those who set up self-actualization as a goal for themselves and practice the various self-help principles discussed herein are likely to be self-motivated.  

Self-respect

Self-respect is the ability to judge what is right and wrong and thus have the ability to take pride in that what one does says or does is right and good. The process of self-actualization in a materialistic world is truly challenging, given that an individual is a mere player who cannot write his or her own script. Equally, the path is beset by more obstacles than reinforcements. The individual’s professional compass has to be his constant companion, telling him what is right and wrong on a real time basis, in the journey of self-actualization. The acumen to distinguish the right from the wrong, the strength to take the right calls on the right things, and the gumption to do the right things in the right way together build the stature of an individual on the path of self-actualization.

Self-actualization, elusive but achievable

The ten principles of self-awareness, self-appraisal, self-confidence, self-control, self-development, self-discipline, self-expression, self-improvement, self-motivation, and self-respect form a virtuous set of principles that can help an individual attain self-actualization. However, oftentimes the journey of self-actualization tends to be daunting and overwhelming, with the goal remaining elusive. As one, for example, enhances his or her self-awareness and embarks upon self-improvement, the bar for self-actualization is automatically set higher. It is this process of higher goal-setting that is tied to the concept of greater self-worth that could make the goal of self-actualization elusive. It is good for the individual and the society to keep aspiring for higher goals for the most part of one’s active life, and then switch on the even more esoteric but more fulfilling goal of self-actualization through spiritual salvation.

Posted by Dr CB Rao on April 21, 2013  

 

 

Reducing Fallibility in Business: The Case for Managerial Poka-yoke

Decision making is considered a major attribute and of managers and leaders. There is, however, a significant difference between technical decision making and business decision making. Technical decision making, almost always, has access to established principles of science and technology and a track record of field performance under a set of varied and variable conditions. Even products of new technologies are backed by several theoretical principles, experimental data and virtual simulations to judge the relative performance prior to commitment on commercializing a product. Business decision making, on the other hand, is not governed by any laws of science or engineering. Business, unlike science or engineering, has no predetermined formats to strictly conform to. It is, therefore, a challenge to error-proof business decisions.

Despite the technical and scientific principles being well set, technical processes need error-proofing. Poka-yoke is the term that represents fool-proofing or error-proofing technical and operational processes. The concept which emerged as an integral part of the famous Toyota Production System has contributed to flawless and productive operations. The concept has applications beyond technical and operational matters as well. Decisions are implemented through processes. Technical poka-yoke or managerial poka-yoke requires that the processes of taking decisions and executing them are error-proofed. There is, however, a world of difference as to how this is achieved in both the areas.

Technical versus managerial poka-yoke

Technical poka-yoke has become a standard feature of industrial and process design, and in product assembly. In manufacturing, go-no gauges have been the earliest check points to determine if a component has been produced right. For assembly, color coding of matching parts has been the simplest method to achieve the right assembly. Machining centers which manufacture different sizes of components are equipped with transportation chutes that automatically segregate components of different sizes, and reject wrong pieces. As processes became more complex, sophisticated poka-yoke accessories such as automated weight checking, electronic profile checking and digital visual inspection have become the order of the day. Components are themselves designed in such a manner that they can be assembled only in one right manner. All this is made possible by the binary nature of technical matters, right or wrong, with respect to specification.

In terms of managerial processes and decisions, however, poka-yoke has had very little application. In fact, fallibility of processes, unpredictability of outcomes, and inevitability of failures are often seen to be the characteristics of managerial processes. Swami Vivekananda is reported to have said "Take risks in your life. If you win, you can lead! If you lose, you can guide!".  A more contemporary quote, in fact a tweet, says "A 90% chance of failure sounds pretty bad. But a 10% chance of changing the world seems like a pretty good deal." Management and leadership rewards risk-taking and failures as long as these lead to learning and failures. Clearly, there is a huge, and unfortunately well-accepted, perception difference between technical matters and managerial matters that accepts certain loss and inefficiency in managerial processes. This, in turn, leads to creeping ineptitude in management and leadership processes.

Uncertain certainty, certain uncertainty

All processes are a mix of certainty and uncertainty. Technical processes are characterized by initial uncertainty and eventual certainty which then becomes the standard specification that is repeatable. Managerial processes are, however, characterized throughout by certain uncertainty which refuses to be a repeatable phenomenon. The reason why technical processes are more robust eventually is because of the continuous cycle of experimentation and validation that goes on till the desired or an optimal feasible result, defined by a set of operating conditions, is achieved. The reason why managerial processes of a firm are more uncertain is that they are, by themselves, parts of a larger set of industry level competitive processes which operate in a linear, sequential fashion with little or no scope and time for iteration of experimentation and validation.

Clearly, if managerial processes are to be fool-proofed, rather error proofed, some characteristics of managerial processes need to be jettisoned and some other characteristics of technical processes need to be integrated. Technical processes are based mostly on material and machine specifications. Managerial processes, in contrast, are based on a much wider spectrum of human factors such as competencies and positive attributes on one hand and knowledge gaps and negative attributes on the other. The only bridge between technical and managerial processes is the man-machine interface. More and more human capabilities are being transferred to the machines both in terms of hardware and software to reduce the negatives of human management and intervention and leverage the perfection and repeatability of machines. However, the larger challenge of making managerial processes, which are of only human faculty and are attributed based, reasonably error-proof remains.

Managerial poka-yoke, strategic

Poka-yoke can be applied to managerial and business processes at both strategic and operational levels, although approaches could be different. At strategic level, two success factors of technical poka-yoke need to be transferred to strategic business processes for achieving managerial poka-yoke. The first is the learning experience of simulation and sensitivity. The second is the replacement of "first and fast to market" by "right, as much as first, to market". These are considered below. At tactical or operational level, two critical approaches would include skill coding of roles and tasks, dovetail of people and positions, choice of processes for outcomes and correlation of efforts and rewards.

Unlike in scientific and technical processes, strategic managerial, leadership and business processes do not provide opportunity to experiment and validate. Even if a firm chooses to experiment its business decisions on a pilot scale, other competitive firms could move straightaway to execution stage, and a couple of them could end up being the successful first movers even as the firm goes through its pilot scale experiments. The answer to this paradox lies in undertaking a lot of simulation and sensitivity testing options as part of the planning process itself. Apart from providing a good preview of risks and rewards, it identifies potential pitfalls and helps the firm develop poka-yoke gates to separate strategies that could lead to successes to ones which could lead to failures. Simulation and sensitivity analysis would be as successful as the depth of knowledge management has on the industry environment and competitive factors.

The second aspect is one of being Right to the Market rather than being just First to the Market or Fast to the Market. Of course, it would be nice to be first and right as well as fast too. If, however, a choice has to be made amongst the three, being Right to Market is of overriding importance. Today, if a user is asked who has been the first to bring a tablet computer to the market, the user would unhesitatingly mention Apple as the pioneer. On the other hand, the right answer is that Microsoft brought out the tablet first in 2000. The reason why Apple is thought of as the pioneer of tablet computers is simple: Apple got the product right (as a complete and seamless hardware and software integration) rather than first or fast (Apple took its own time to launch iPad after iPhone or iPod). Similarly, no one today thinks that Dell pioneered the 5" phablet type of large format smartphone or Palm pioneered the handwriting on palm top devices. Everyone thinks of Samsung with its Note as the phablet pioneer, again a point of making a product right rather than first or fast.

Managerial poka-yoke, tactical

At the tactical level, it is necessary to recognize that there are two sets of factors that need to be matched. On the right side, we have four factors: tasks, positions, outcomes and rewards. On the left side, there exist four factors: roles, people, processes and resources. The better these are matched to each other, the better will be the move from tasks to rewards. The way to poka-yoke the tactical and operational activities is by matching roles to tasks (by job and task definitions), people to positions (by talent positioning), processes to outcomes (by process mapping) and resources to rewards (by investment analysis). By doing these matches (which are very much akin to matching equipment to operating conditions and material results to material inputs in a technical process) one can achieve better certainty with lower errors in day to day managerial processes.

Signal recognition is a key aspect of tactical and operational poka-yoke. Experimental results invariably come out as digital or analogue readouts. Managerial results come as a mix of signals, often with lot of noise, making recognition and readout difficult. Compounding the problem is the unwillingness or diffidence of managers and leaders to recognize contrarian or unexpected signals. Signals are of different types. Some signals warn us of economic or business cycles; these are often sharp and can be recognized more easily, more so they tend to impact firms collectively. Certain other signals reflect a technological or business discontinuity; these can be muted initially but can be reflective of an impending structural transformation. These tend to be weak signals mostly. The ability to recognize weak signals and analyze objectively helps managers and leaders poka-yoke their processes.

Each day, a judgment day

In technical processes, each experiment is an opportunity to vary conditions and inputs that can provide new results which, in turn, can form the basis for new experiments until the feasible and optimal results are achieved. In managerial processes the reverse is probably true. Each day's results provide an opportunity to verify if the parameters chosen are the right ones for obtaining the right outcomes.

Posted by Dr CB Rao on April 9, 2013