Procedures are the DNA of Business

Replicating success in nature requires only three ingredients, 1. Genetic instructions (DNA), 2. A body/organism to help you compete for scarce resources, and 3. A continuously changing environment that helps to select successful features and functions. Replicating success in business is similar; you need, 1. Business instructions, 2. A business or group of people, and 3. A dynamic and competitive market. Richard Koch thoroughly illustrates this comparison in his book The 80/20 Principle.

In his book Koch expands the DNA / Work Instruction metaphor by observing that evolution is not always "survival of the fittest", but it is always survival of the most cooperative. One example of this is the recent phenomenon of imported fire ants in the Southern United States. Everyone who has 1st hand experience with them agrees mother nature made a mistake in selecting the wrong species for proliferation, yet it becomes very clear that fire ants uncanny ability to coordinate, specialize and allocate group functions have resulted in the proliferation of the species as seen in 1 below.

Fig 1. Fire Ants: A typical scene in the southern United States.

There is an uncanny similarity between the competitiveness of successful DNA and the operating benefits derived from well-conceived work instructions. In biology, it is the most co-operative genes and organisms that achieve proliferating growth. By cooperating, or in other words removing local optimization, successful genes learn to dominate. Richard Dawkins refers to this as "selfish altruism" on the part of genes. In business, this happens when a business finds the root cause of its own success, divides up the work into process areas or functions, then replicates the behavior across the organization.

Genetic instructions form a kind of distributed cognition throughout its host organism, which helps to operate optimally at all levels. Similarly in business, gone are the days of command/control flow-down as a means of sustaining growth though it can be beneficial in the early stages. Flatter, more nimble, and reactive business units require a framework of knowledge promoting both disciplined operations AND creativity or R&D. As the business environment changes, the business must identify the methods that provide the highest optimization of overall outputs. This coordination between processes is maintained through process hierarchy.

WHY IS ALL THIS IMPORTANT?

Koch identifies that the rate of change of the business environment is accelerating, some think it's changing faster than humans or businesses are inherently able to keep up with. I would propose that businesses, unlike biological organisms can evolve as fast as they are designed to. It is possible to build in flexibility and fluidity into your work practices by the way your processes interact.

SO WHAT ACTIONS TO TAKE?

If you incorporate the following criteria into your existing business instructions, you will realize your business ambitions to the highest degree within a competitive environment: 1. Recognize that unchanging work instructions tend to fragilize an organization against the shocks of a changing environment and competitive threats. 2. Hierarchy within your instructions provides both rigidity of ends, and flexibility of means. 3. Change processes at the lowest levels should be democratic within certain bounds, while changes at the highest level must be autocratic. 4. Having a quality system that allows for limited, rapid implementation of changes promotes longevity and growth, and 5. Identifying the root cause of what's going right internally is almost as critical as solving problems that arise from your environment.

1. FROZEN WORK INSTRUCTIONS FRAGILIZE AN ORGANIZATION

There is an unfortunate trend that with size comes inflexibility. Discrete benefits of incremental a given change must be weighed against the systemic costs and impacts to existing and interrelated architecture. This is why smaller firms always have a physiological advantage over larger ones when dealing with change. One extreme example: Adding the words "must be invited" into to a supply chain procedure at a fortunate 500 company resulted in a company-wide political campaign and six weeks worth of teleconferences with each site executive explaining the benefits of adding just 3 words! To fight against this natural phenomenon, senior management must relentlessly (and carefully) embrace a culture of change. The way to accomplish this is to have a very disciplined change process.

2. HIERARCHY PROVIDES RIGIDITY OF ENDS AND FLEXIBILITY OF MEANS

A common complaint from the users of procedures is that they aren't relevant or do not reflect what actually happens in production. The way to solve this problem is to implement a hierarchy of procedures where the top level procedures do not change very easily (VP approval required). Lower level procedures are allowed and even encouraged to change rapidly as long as they remain in compliance with higher level procedures. Your document hierarchy should resemble the Giza pyramids in fig 2, with a constitution or policy manual at the top, followed by intermediate procedures, then working level instructions.

Fig 2. Nomad at the base of the Giza Pyramids

3. AUTOCRATIC POLICY, DEMOCRATIC PROCEDURES

High-level policy or procedure must forcefully describe "What" must be done. This is conveyed using strong compliance verbs like shall, will, or must. Recruiting adherence to procedures can be further helped by embedding strong purpose/rationale statements near the front. Lower level documents similarly must be complied with but as operators provide feedback to line supervisors about manufacturing process capabilities, that feedback must be acted upon to ensure processes are updated to reflect reality. In turn, the process must be communicated and trained to at the operator level. Once trained, the work instruction serves as an immutable contract between operator and supervisor. Outputs must be controlled.

4. RAPID, LIMITED CHANGES PROMOTES LONGEVITY

Just as small chain DNA has a much lower chance of being crossed (and broken or unintentionally mutated), likewise, elegant succinct work instructions have greater longevity, durability, and adaptability to a changing environment. Any red-tape in the work instruction approval process must be relentlessly cut out.

Lower level procedures must provide the dual function of manufacturing process control AND fluidity with environmental variables. The way to achieve both control and fluidity is to ensure Work Instructions are succinct. Work instructions that are overly verbose or interactive with other procedures will be relatively difficult to feedback almost worthless.

One thing should be abundantly clear to organisms and organizations, the environment we operate in is evolving faster than it used to. Some think the business and technology environment is evolving faster than humans can keep up with. Certainly, there will be surprising trends that become key discriminators for business. Organizations must be able to adapt and change with increasing acceleration. How will you do this 5 years from now, 10 years from now? Clay Christensen, 2016 businessman of the year provides this insight:

It is in the disruptive innovations, where we know least about the market, that there are such strong first-mover advantages. This is the innovator's dilemma.

In absence of a crystal ball, first movers who bring disruptive technology into markets are almost unstoppable. "Exactly, you can't predict the future!" I hear you say. This may be true but one thing you can say in unqualified terms is the future favors the most adaptive AND disciplined organizations. Therefore, if your external environment does not force individual change internally, then I would propose building a culture that forces change from the inside out in a disciplined way. The changes can be to revisit existing procedures and framework. Changes don't have to be 180 degrees. Simple engagement and refreshing on existing procedures can be a kind of change.

A changing culture can be measured on 3 criteria: 1. The speed of changes, 2. The magnitude of changes, and 3. The speed of learning/adapting that comes from those changes. Two of the three criteria have to do with speed. I would propose that a system of somewhat small but rapidly implemented changes can result in significant benefits for the organization. Once in a blue moon, a new customer or product will come along that marshalls all of your best talent, and you will succeed only if you have prepared yourself with the change management to adapt to the new environment.

5. IDENTIFY THE ROOT CAUSE OF WHAT IS GOING RIGHT

Every startup begins with a theory, a theory of the business. This is what brings the first customer. From this starting point, opportunities are capitalized on and work instructions standardized. After the first product offering, there are inevitable variations, either in the customer base or product base and those variations lead to changes in customer satisfaction. Businesses must do the detailed analysis to find out what is going right, then continually start new businesses or product lines. Clay Christensen has suggested that once business excellence in a given area is established, a percentage of resources should be allocated to R&D.

I began by describing how a changing environment helps to competitively select the most cooperative genes that benefit organisms in a biological environment. The corollary is that a business can also select its best features by becoming excellent in its core value proposition through well planned and well-written written work instructions. What's more, a business can literally change it's own external environment from the inside out by the kind of culture it creates. By doing this a business will develop superior operational discipline and adaptive creative capabilities to help it thrive in the dynamic future ahead.