Last issue’s Top Tips feature focused on how to manage change. Here Dr Colin Thompson, managing partner, Cavendish, delves into the data behind the need for such actions to deliver lean business transformation.
When the printing press was invented in 1450, the population of Europe was 50 million people. The literacy rate at the time has been estimated at 1%, equal to 500,000 people capable of reading what was printed at that time. It took over 100 years to raise the literacy rate to 50%. By then the population was about 70 million people, so it took 100 years for the number of people who could read what was printed to hit 35 million people. Therefore, it took more than 100 years for the number of `users` of print to reach 50 million people. It took the iPad less than one year years to reach 50 million people. And Facebook added 100 million users in just nine months, highlighting the vastly disruptive nature of digital technology.
The greatest coming growth will be in China (1.35 billion) and India (1.25 billion) as their populations expand at a huge rate. These two markets are the fastest growing in the digital environment. How will that impact print – and how you manage that change within your business?
Firstly, it’s clear that management needs to expect change, and to be totally commitment to it - failure to hold a compelling vision of the future reeks of business failure.
Lean business transformation is the name of the game, but there are at least 12 major pitfalls for companies making such a journey:
- Lack of management commitment
- Lack of share division and objectives
- Failure to lead by example (set by skilled/experienced/successful people)
- Initiative fatigue
- Constant fire fighting
- Employees’ lack of understanding
- Middle management not engaged
- Stagnation after pilot
- Failure in deployment
- Lack of clarity over the future state of the organisation
- Failure to build on a change which has been achieved
- The understanding of managing the `management of change`
All too often, failure to make a lean transformation stems from a superficial, piecemeal approach. A lack-lustre approach to change by a dividend driven or uncommitted senior management, and an unwillingness to properly consult and communicate with the workforce is why some European companies claim to have tried and failed to implement lean production systems.
UK owned manufacturing companies are typically less productive than their UK-based, US-owned competitors. A McKinsey & Co study showed that an average US manufacturing companies delivered a 22% annual return on capital, while UK companies returned only 7.6% (before the recession). This needs to change rapidly.
In the past we focused very much on `hard`, typically financially based performance measures. But the balanced scoreboard approach has taught us that customer-based KPI`s are more important and that these are to a degree quite soft. Look at questions such as: “How do you measure customer satisfaction?”, “What parameters need to be measured to reduce customer churn?”
Today, with a strong emphasis on the customer, more relevant measures might well be: customer attrition (churn) and attraction rate, low risk customers with good assurance of adequate profitability etc.
And do not underestimate the power of elearning on the future of your business. The global elearning market is expected to reach $107 billion this year, and it’s a training method that will certainly impact upon the print sector as it is everywhere else.
Last year the learning technologies used were:
- 74% of companies currently use learning management systems (LMS) and virtual classroom/ webcasting/ video broadcasting
- 48% of companies used a rapid elearning tool (ppt conversion tool)
- 33% of companies used application simulation tools
- 25% of companies used learning content management systems
- 21% of companies used online performance support or knowledge management systems
- 18% of companies used mobile applications
- 11% of companies used podcasting.
Overall business training delivery methods during 2014 saw:
- 28.5% of training hours delivered via online or computer based technologies (no instructor), up 2.6% on the previous year
- 15% of training hours were delivered via virtual classroom/ webcast only (instructor from remote location), down 1% on the previous year
- 4.2% of training hours were delivered via social learning, up 0.9% on the previous year
- 1.4% of training hours were delivered via mobile devices, down 0.5% on the year before.
The message, is that to continue to compete print companies need to have vision, communicate that vision and path to change clearly to all involved, continually reassess and restrategise, and embrace new training and management technologies and methods.