Roger La Salle’s Matrix Thinking Blog

By Roger La Salle

                                                                                                              www.innovationtraining.com.au

                                                                                                              www.matrixthinking.com

The previous Business Insight was about process innovation, with more to follow on product innovation. However some readers commented that many Western economies are now largely service based, so what has process innovation got to do with that?

Be assured, Process Innovation is not confined to the manufacturing sector. It’s just as relevant to any business, or indeed life itself.

The Service is unchanged – The profit gain is enormous

Consider three stunning examples of business processes undertaken with insightful observations that achieve outcomes out of all proportion to the simple changes made.

Trains:               In one case a rail company was looking to update its fleet of suburban commuter trains, which ran every seven minutes stopping at 30 stations along the route. In considering the design for new carriages a review was made of the process involved in people getting on and off the trains.

It was observed, not surprisingly, that the “hang time” (how long a train spends at a platform) when passengers are boarding and alighting related to the number of people using the service, with peak times of course showing the longest interval.

In considering ways of reducing hang time, experiments were conducted with different seating configurations to allow better people movement and door openings also increased from 1.9m to 2.3m. The investigation concluded that optimal seating arrangement and door openings of 2.2m would considerably reduce average hang time by an average of 14 seconds per stop. This may seem insignificant, but across 30 stations this amounted to seven minutes.

With a seven-minute train frequency, this tiny saving per station allowed the company to operate with the same service, but with one less complete train. The saving in capital outlay ran to tens of millions of dollars.

Airlines:            The second case involved a major USA based airline looking to improve profits by training staff to be more vigilant for opportunities.

An alert flight attendant observed that on meal-services where a salad was provided, most people chose not to eat the olive in the salad. Further, the company providing the prepacked salads had a pricing scheme that allowed three ingredients for a low standard price. Any fourth ingredient, in this case the olive, was supplied at a much higher marginal cost.  When the flight attendant observed the wastage of the olive the suggestion was made to dispense with it as a normal salad ingredient. Instead, olives could be offered from a jar kept in the galley to any customer who requested one. The effect on customers was practically nil, but the cost saving ran to more than $500,000 a year – just for withholding a seemingly insignificant olive.

Couriers:          Another well documented example is for courier drivers in the USA that, in city deliveries, will drive further rather than make a left turn into traffic. The time saved by this simple rule is said to run into millions of dollars annually in time and wages saved.

What’s the message?

It doesn’t matter what you do, there are almost always hidden ways to make improvements. Even the smallest change can sometimes deliver huge profits.

Have you taught your people the art of “observation, it’s fun and it’s easy. The most potent example is that of a blind person that can detect all sorts of things by sound alone. Sighted people can as well, but they are “blinded” by their ability to see. A simple experiment easily proves the point and opens the way to much heightened alertness and observation.

                                                          **** ENDS ****

Roger La Salle, trains people in innovation, marketing and the new emerging art of Opportunity Capture. “Matrix Thinking”™ is now used in organizations in more than 29 countries. He is sought after as a speaker on Innovation, Opportunity and Business Development, is the author of four books, and a Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies, both in Australia and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast.

Are you asking the right Question?

By Roger La Salle

Innovation is about finding better ways of doing – Whatever it is you do!

As we know, a good definition of Innovation is “Change that adds Value” and embracing this term opens the way to make innovation a relatively straight forward exercise, providing you are asking the right question.

How many times do we solve a problem and even implement a solution, only to then realise had we asked a better question we may have come up with a much better solution. How many times do we convene a meeting without having a specific one sentence idea of exactly what we wish to achieve in that meeting?

Being able to crystallise an issue in to a single sentence question is so important, but few people implement that valuable practice.

Have you found the best question?

To put this into context, let me pose the question, and have you think of the answer, before reading on:

• What is the specific purpose of a written job application?

The obvious answer is to get the job, but this incorrect.

The sole purpose of the written job application is to get an interview, to get in front of the people making the selection.

With that clear purpose in mind, a written job application takes on a different form. Indeed, what you leave out of your application is just as important as what you include. Your application should be a hook to catch the reader. It should lead the readers to a point where they wish to speak with you to learn more. This is quite a different approach from writing everything you can think of in the hope that you will win the job. The written application never wins you the job, it’s just the starting point in the process.

Yet another incorrectly asked question occurs in real estate sales where too much money is wasted on useless advertising, possibly to the benefit of the real estate agent who may receive a commission, but of little value to the vendor.

The question to ask is:

 ”What are you trying to achieve by advertising a house for sale?”

The obvious answer is to sell the property, but this is incorrect.

Nobody purchases a property based on the pictures or just an advertisement.

The real purpose of the advertisement is to create an inquiry, to make the real estate agents phone ring. With this question in mind, perhaps the best advertisement is one that simply refers to a stunning residence and shows only a single picture to capture the imagination of the reader.

For example a house with stunning ocean views need only show the view. That will make the phone ring as an inquiry from an inquisitive party.

The above are just two examples of where the wrong question has been asked, and consequently the wrong answer found. It is essential to properly define the objective, the real issue before you search for an answer.

Too close to the problem

To cite another example, recently a workshop was undertaken in a large multinational trading bank, the team came to the session wanting to resolve the question – “How can we reduce the cost to businesses wishing to raise a Letter of Credit (LC)?”  This seemed like a sensible question and was workshopped by the group for a time until they came to the “Re -Question Catalyst in the Innovation Matrix.

So challenged to “Re-question” the group dug deep searching to find the real reason they wished to lower the cost? The answer that crystallised was, so that people would be more willing to use their LC facility.

In fact, the real and best question to ask was:

“How can we inspire businesses to raise more LC’s?”

On investigating this different issue it was soon realised that the cost of raising and LC, maybe $20.00 was irrelevant. Why would that be a “show stopper” for somebody wishing to raise an LC for perhaps $500k or more?

The real reason people were averse to raising LC’s was the time and effort involved. The process was just too complex and time consuming. Yet the bank in its daily work transfers multi-millions of dollars around the world with little more than the click of a mouse. So why are LC’s so complex?

The better question, the real question was:

“How can we make it easier for clients to raise LC’s?”

 With this question in mind the workshop was continued based on a Process Innovation Matrix and an answer was soon found.

There are countless examples of this, usually resulting from people being too close to the problem.

So what’s the solution?

The classic method of questioning with the “why” “why’ “why” challenge is one way of trying to “drill down” to the best question.

Another way is to have somebody quite remote from the issue present in any meeting that addresses a problem. You can be sure that a person NOT skilled in the area may well ask some very interesting and challenging questions. This always helps in drilling down to the real issue and the best question.

Most often when a group of people comes together to investigate a burning issue, a solution will be found, just make sure the best question has been asked, one that leads to the best solution.

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is a widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panellist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries. www.innovationtraining.com.au

                                                                                          By Roger La Salle

                                                                                                                   www.innovationtraining.com.au

                                                                                                                   www.matrixthinking.com

A short series

The next few posts we are proposing will address simple ways to look at your business and simple ways to achieve growth. But please, at all times, keep it simple.

There are only two ways

In essence there are only two ways to improve profits, it is suggested both these initiatives be employed:

1. Process Innovation – Reducing costs whilst selling the same products
2. Product Innovation – Exploring new products and markets.

This post will focus on Process Innovation, whether it is in manufacturing, sales, distribution or marketing.

Process Innovation

Process innovation is something every business should invest in, whether in the manufacturing or services sector. The Book, “Think Again” has the byline heading, “Invest in Process Innovation and Harvest Untouched Wealth”. How true this is because with processes there are always gains to be made that are risk free if done properly; and there is no market risk, just more margin to be gained.

5S

The most simple technique is so easy it’s hard to imagine it’s become one of the foundation stones for process improvement. Called 5S, this in essence simply asks you to tidy up, organize, put things back in the right place and ensure everything is in proper working order. The Five S’s are Sort, Order, Shine, Standardize and Sustain.

Kanban

Another common and easy to implement method is referred to as Kanban, a Japanese word for Visual Signal. This is a way of visualizing and ordering work flow, often using a system of cards to represent stages of work as it moves through the facility. Kanban is an efficiency optimization tool that properly used also leads to improved inventory management and “Just in Time” delivery. There is a great deal of material on this system on the internet.

ISO9000

Unlike what many people may believe, the ISO regime is not about creating quality products as such, but more about traceability of product development and manufacture. As you can imagine, this is vital in the food and chemical industry, but ISO has over years expanded to include all manner of businesses. Not to guarantee quality, but to ensure all initiatives are documented and traceable.

Six Sigma

This is a quality control system, with the Greek term Sigma (σ) being used by statisticians to signify Standard Deviation in a data set.  The Six Sigma doctrine stipulates that no more than 3 samples in a million are permitted to be outside their specified tolerance limit. This is nice in theory, but if given as unfettered power of enforcement to quality controllers, can lead to huge disruption in manufacturing processes.

Matrix Thinking

The system we also suggest is founded on the Process Innovation Matrix that employs just three “Seeds”, or primary areas of focus, these being:

Costs – What are all the costs separately identified in your manufacturing and business processes

Cycle Time – How much time is spent on each activity, leading to product and business cycle time

Quality – Defined as “Conformity to Specification” asks how quality may be effected by the push for process improvement.

The Process Innovation Matrix presents 10 ways to explore each of the Seeds. It is virtually impossible to explore each of the matrix intersections without identifying a breakthrough opportunity and thus, reaping that unharvested wealth.

However, before embarking on any process innovation we suggest it’s first necessary to measure and map the process you are exploring. Without that knowledge as a starting point it’s quite amazing how small changes made can have catastrophic unforeseen knock-on effects. In short “Map and Measure” before you start.

What’s the Message?

Process Innovation is a must for all businesses and can yield unharvested wealth. The key to this goes beyond just 5S, Kanban and others; and when combined with the Process Innovation Matrix a unique and comprehensive approach is provided that has been employed with great success in more than 20 countries.

                                                            **** ENDS ****

Roger La Salle, trains people in innovation, marketing and the new emerging art of Opportunity Capture. “Matrix Thinking”™ is now used in organizations in more than 29 countries. He is sought after as a speaker on Innovation, Opportunity and Business Development, is the author of four books, and a Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies, both in Australia and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast.