Jul
15
WRITTEN BY:
Don Boyd
Thursday, 15 July 2010
One of the most startling implications of Einstein’s equations is that two people with independent reference points will see the same event as occurring at different times. To see something happening at the same time, the viewers must both be looking at it from the same place. On the surface this may not appear to have much relevance to process, but it does—a process operates according to the same law.
The most basic objective of a process is to provide, for the full spectrum of potential activities, a simple choice: yes or no. It is the real world equivalent of computer programming, and somewhat akin to herding sheep into a series of paddocks of ever-decreasing size until you get them through the gate one by one! Good for the farmer, but annoying for the sheep.
Our lives and our world are inundated with surreptitious standardisation, all to get us to the same yes or no point in time—processes with the aim of having everyone approach things from exactly the same perspective. Why? Because, in the end, it saves time. That call queue that I’m waiting in is there to save time. It’s surprising, I know, but then it’s not your time that’s being saved … it’s the organisation’s time.
In business it is usual to speak in terms of money, profits, ROI and the like, but the underlying currency of any enterprise is time. How long something takes and the value of the materials consumed is fundamental to the value (or cost) of the item. The implication of this is that anything that reduces time is valuable.
Operationally, the provision of services is clearly about time. What about products?
When buying products, what is the organisation actually doing? It is procuring things that make jobs easier, faster, better—in substance they are buying time. This enables them to get to a required point in less time than they would without the products. And the reverse is true for the organisation selling the products: the value of the item they are selling is the time it will save.
The importance of this time dimension in a financial reporting framework is easily grasped: profit is for a given period, debtors are measured in days, inventory is measured by churn within the period, and so on. Without reference to time, these measures lose their significance completely. The fact that an organisation achieved a million dollars of sales is meaningless without knowing the time period. And it goes further. Even in day-to-day operation, the time element is critical.
In my last blog post I spoke about good people and excellent people. It’s worth reflecting on what really separates an excellent person from a good one. I recognise that there are a myriad of potential differentiators but, for our purposes, let’s say that an excellent person does the right thing first time, every time, and a good person does the right thing first time, most of the time. I suggest that an excellent person ultimately prevents the organisation from pursuing some fruitless path, therein saving the organisation the time and expense of returning to the correct path. Like the purchase of a product, the value of the excellent employee is that they save time.
This pattern is the same for any analytical activity; getting onto the right path sooner is really all about time. And the benefits multiply. Securing the result more quickly means the recipient realises the benefits sooner. It follows that, for a commercial organisation, getting the most out of its time is probably the single most important challenge that it faces. Paradoxically, the most fundamental measure in the universe is one of the most difficult to capture, which is why there are so many proxies for it in reporting. But as a fundamental driver of business value, it cannot be ignored.
This is why process improvement is so important for every organisation. At its heart, process improvement is all about maximising the value of an organisation’s most valuable asset: time! This ties together the people/process dilemma. The process gives the organisation the time-saving benefit of excellent people, and excellent people give the time-saving benefit of getting it right first time.
Similarly, the tragedy of the time-debt problem is that it’s time squandered masquerading as time saved. Who has the time for that?!