Sunday, March 01, 2009

Process to be an art or science

HBR March 2009 JM Hall and NE Johnson

This is an excellent article from HBR on the importance of choosing the right process for the right challenge. Remember our earlier discussions on the need to be an ambidextrous company—companies always face multiple challenges and “one process does not fit all”

Mass processes are standardized processes that are geared to eliminate variations in output. They’re appropriate when the goal is completely consistent output for a narrow range of products or services. In such cases, all artistic discretion should be eliminated. Steel, cars, and consumer financial services are examples of industries where mass processes are widely applied.
Mass customization uses a scientific process to produce controlled variations in output. Assemble-to-order products like Dell’s personal computers and cars in BMW’s “Build Your Own” program fall into this category. While the number of possible combinations might be enormous (BMW claims more than 130 million configurations), output variability is limited to combinations of predefined components. In many cases, mass customization represents the best of both worlds: control and variation. But when customers demand true customization (“I want a pink computer with a fabric-covered chassis that complements my office”), it will fall short.

Nascent or broken processes can’t produce the consistent output that customers demand. Out-of-control processes are common when a product or process uses radically new materials, technology, or designs. In these situations, managers should consider whether controlling output variation is feasible or desirable. If variation can’t be controlled but customers can be persuaded to value it, an artistic process is the solution. If customers won’t tolerate variation, the focus should be on understanding its causes and creating a standard process. Boeing did this for its new 787 Dreamliner, the first commercial aircraft with a carbon composite airframe: The company conducted test runs to learn how to standardize the process for manufacturing fuselage sections.

Artistic processes leverage variability in the environment to create variations of products or services that customers value. They rely on the judgment and direct experience of craftspeople. Building Steinway pianos, serving passengers on flights, and developing radically new software applications are but a few of the processes that meet those criteria. Before choosing art, it’s critical to make sure that customers really value output variation. Some managers delude themselves into believing they need artistic output when the vast majority of customers really want a standard product.

No comments: