The Path #2
Welcome to the second edition of The Path by Pathfindr.ai. Last week we talked about how corporate practicioners shouldn’t be afraid that AI is “coming for their jobs.” This week and in future editions, we’ll talk in a little more detail about how to identify where AI is best suited to create an impact in your organization or on your team, and how to think about AI ROI in this context.
But first, a history lesson.
In 1984 Israeli management guru Eli Goldratt wrote and published his book The Goal, a fast-paced business thriller (yes, there is such a literary category) that outlined what he called his Theory of Constraints, or TOC. In essence, TOC posits that any company’s goals - such as producing more widgets, reducing customer wait time, etc - are impacted by a relatively small number of constraints. A manager’s goal should be to identify the constraints that cannot be removed (there is always at least one) and restructure the organization to remove or reduce the others, thereby maximizing their team’s performance.
Sounds logical, right? Some things you can’t control (at least not easily) and some things are clearly solveable with enough time and energy. Think about all the times in your day you wish some process you’re part of was easier, or how often you wonder why some bottleneck exists when it could be eliminated if only your team had the support needed to remove it. As the old saying goes: where there’s a will, there’s a way.
It’s astounding that 40 years after TOC was introduced, with the multitude of efficiency and management methodologies that have come on the scene since then - Six Sigma, Agile, et al - highly skilled employees in every industry are being constrained by burdensome processes that should have been streamlined a long time ago. There are a variety of reasons for this, and we’ll unpack them in a future edition.
Now, at this point you might be thinking - how does AI fit in here?
Those of us who are not developers are used to seeing where the constraints are, but not knowing exactly what to do about them. Maybe a particular process is too entrenched, or the engineers who could fix it are too busy, or leadership doesn’t see it as a priority. But these days, there is hope! The rise of API-based open architectures, the proliferation of no-code or low-code development tools, and the availability of expert advice via a $20/month ChatGPT Plus subscription have given teams everything they need to remove their own constraints without involving developers (at least initially).
So, why aren’t more teams doing this?
In many cases, it may be that individual contributors and their teams aren’t empowered to take action on their own. And perhaps this makes sense where introducing new or experimental applications could violate existing cybersecurity or privacy policies. Usually, however, most companies are open to the idea of teams taking initiative to solve a problem with technology and will help them adhere to the relevant policies provided the business case is strong enough.
The elements of a strong business case are outside the scope of this post. But any practicioner worth their salt knows roughly where in their workflow - or business process they’re responsible for - they might start looking if they wanted to find bottlenecks and start building a rationale for change. The question then becomes, how do you identify all the constraints and separate the ones you can remove from the ones you can’t? The answer is simple:
Let’s go back again - to (northern hemisphere) summer 1992. A League of Their Own and Honey I Blew Up the Kid were in theaters and Billy Ray Cyrus’s “Achy Breaky Heart” was on the radio. It was an exciting time to be alive.
But those cultural touchstones weren’t the only things making an impact that year. In the July-August edition of the Harvard Business Review, Professors Benson Shapiro, V. Kasturi Rangan, and John Sviokla published the results of a study they conducted wherein they “stapled themselves” to an order to understand at a granular level how the Order Management Cycle worked at 18 different companies.
While the results themselves are interesting - you can read a summary at the link above - it’s this excerpt that really resonated with us here at Pathfindr:
It’s fashionable today to talk of becoming “customer oriented.” Or to focus on that moment of truth when customers experience the actual transaction that determines whether or not they are completely satisfied. Or to empower frontline workers so they can delight the customer with their initiative and spunk.
None of that advice, however, focuses on the real way to harness the customer’s interests in the operation of a company. The simple truth is that every customer’s experience is determined by a company’s order management cycle (OMC): the ten steps, from planning to postsales service, that define a company’s business system. The order management cycle offers managers the opportunity to look at their company through a customer’s eyes, to see and experience transactions the way a customer does. Managers who track each step of the OMC work their way through the company from the customer’s angle rather than from their own.
That insight is worth its weight in gold to a practicioner or executive who wants to truly make an impact on their team or add value for their customer, regardless of whether they are internal or external to their company.
You might be asking, why are we still talking about management methodologies from the 80s and 90s? Surely most corporations have evolved past them, especially considering how AI has been transforming (or promises to transform) everything recently. The reality, though, is that while the innovations of the last two years have given us incredibly powerful tools that we can use to remove constraints and create amazing customer experiences, we have to know where to apply them first. And the only way we can do that is by following a process from beginning to end, developing a deep understanding of each step and its impact on the customer, and using our knowledge of what today’s technology can do to determine the best way to optimize it.
In a future edition, we’ll examine some common challenges that are often touted as Gen AI use cases and explain why they could use the “staple yourself” treatment. For now, we encourage you to reflect on how you might apply this method to your own team’s processes. And while you’re at it, treat yourself to some other classics from summer ‘92. I defy anyone to keep still whilst listening to this absolute belter of a track:
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