Wednesday, October 14, 2015

10X v 10%

The title looks like a horrible math problem.
However, in reality what it comes down to is "Innovation & Improvement: Not the Same Thing"

I've recently decided to go back to basics and re-read the best book on 'Process' ever. I refer to Davenport's HBS edition of Process Innovation. If you can read past the early 90's predictive voice in regards to IT, the rather immutable facts present themselves. Its best to start by just getting the terms defined.

There is a lot of confusion in the terms -to name a few:
  • Process Redesign
  • Process Improvement
  • Continuous Improvement
  • Process Innovation
Davenport makes a dramatic distinction between Process Innovation and Improvement.
Process Improvement sets it's goals at 5 to 10%
Process Innovation however has goals of 50 to 100%. That's a 10X change
So does that answer the question as to whether these terms are interchangeable?
Yes, there is a huge difference between them.

Does this mean that we should choose Process Innovation over Process Improvement?
No, they work together.
Buying a new car is a big change, but you need to have a maintenance plan or it'll break down.

Process Innovation effort makes large cultural changes across organizational areas (big risk - big reward). Process Improvement continuously updates the resulting processes to make them more efficient over time.

These two disciplines work together for the health of the business.
Process Innovation handing off to Process Improvement.