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- Herausgeber: Books on Demand
- Kategorie: Fachliteratur
- Sprache: Englisch
We all know the stereotypical tech company: highly educated young people in Silicon Valley perform magic that ends up in creating a powerful new product on your smartphone. However, there is a workforce too, carrying parcels up stairs, driving trains, and mowing the lawns. The majority of these people are neither in their twenties nor are they multi-lingual computer science graduates. It may seem that the world of work will increasingly be divided into a small group of digital sorcerers and a large group of muggles taking care of the grunt work. Is that inevitable? Is operations doomed to a future of being a meaningless sidekick to the digital world? The exact opposite is true. However, in order to leverage digital solutions in operational processes, we need to change our ways - quickly and dramatically. This book holds some good advice on how to do it.
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Veröffentlichungsjahr: 2019
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CONTENTS
Introduction
Business Potential of Operations 4.0
Overcoming Classical Trade-Offs
No More Maintenance of Old Systems
Kill your Legacies
Hardware Legacy
What is a Hardware Legacy and what isn’t, even if it’s old
It is about Customer-Facing Hardware Legacies
Killing Hardware Legacy
Legacy IT
The 7 Characteristics of IT Legacies
Rebuild from Scratch, or Decouple by Component
(Legal) Regulations
The three Types of Regulations
Implicit Legal Regulations
Explicit Legal Regulations
Company Internal Regulations
Translating Operations into IT Requirements
The Operations Mantra
Digital Operation Leaders
Who do you find
Who are you looking for?
Digital Transition
Operational IT
Product Domains
Product Owner and Business Owner
Mixed Project Teams and Internships
Roadmap Approach
Managing the Change in your Team
Involving HR and Recruiting
Hiring Principles
Change for Existing Leaders
Change on the Team Level
Balancing Efficiency Gains and Job Security
Options for Avoiding Digitalization—None
Managing Job Security and Digitalization
Limitations of Managing the Desire for Job Security..
New Technology Attracting a New Workforce
Afterword by FlixBus Co-Founder Daniel Krauss
INTRODUCTION
We all know about the stereotypical tech company: highly educated young people entering futuristic high-rises in Silicon Valley, performing magic that ends up in creating a powerful new product or something on your smartphone.
However, there also exists a workforce which is engaged in hitting nails with hammers, ringing doorbells, carrying parcels up stairs, driving trains, and mowing the lawns in the city parks. The majority of these people are neither in their twenties nor are they multi-lingual computer science graduates.
The contrast between these two worlds is stark and very real. Most tech businesses work on a shared economy approach, allowing them to avoid solving the challenges of other working realities, as tackling these would impede their rapid growth. Uber, for example, isn’t inclined to worry about the oil change procedures of the taxis operating under its purview, or decide on the best choice of windshield wiper.
If they were to take care of it, the number of drivers and cars they could integrate would be significantly reduced, because the level of effort would drastically increase.
The list of tech businesses avoiding real, hands-on operations is long, for obvious reasons. Of course, when I talk about operations, I mean the maintenance of on-site infrastructure as well as actual customer contact.
The process of improving the professional processes of a hotel, for example, could take months if not years of training until every housekeeper is able to clean a room with consistent speed and quality, and until every food services worker is able to ensure the timely availability of the appropriate amount of coffee for the breakfast buffet.
On the other hand, for the optimization of a taxi service, local experience is required to be aware of which garage delivers the price and quality balance needed to run the business successfully. This can’t be ignored, as outsourcing entails a separate cost.
Increasing the turnover of your company by a factor of 10 in two years isn’t possible under these realities, and the time and investment required to build a physical hotel is greater still.
At first, these examples might appear irreconcilable, and it may seem that the world of work will increasingly be divided into a small group of digital sorcerers—organizing the platforms and taking the greater share of the margins—and a large group of muggles taking care of the grunt work.
Looking at big corporations, this is something that has already happened. Where are the young, dynamic, and well-educated workers with the highest potential? They are in the marketing, sales, business development, and IT divisions. They are not found in operations. As a result of this situation, most operations workforces in industrialized countries are ageing dramatically, thereby activating a feedback cycle in which operations becomes even less attractive for digital people.
People with a digital mindset fully understand the opportunities brought about by automation in the form of artificial intelligence (AI) and big data. These people will not choose a career based on optimizing the cleaning speed of a housekeeper.
Another example is found in rail companies. Until the 70’s, being a train driver was considered a leadership position. Boys dreamt of being one, application lists were long, and access was difficult. In contrast, the sales department was just a necessary overhead required for selling paper tickets at stations—useful but almost meaningless when compared to a driver. This has changed dramatically.
Today, the game is won by the sales team by activating demand, placing the right ads in search engines, optimizing prices in extensive yield tools, and managing to turn casual users into heavy users with the help of smart incentive systems. Train drivers? Yeah, we need them too...
The profession of flight attendants has seen one of the most dramatic drops in job prestige, since the time when they were still called stewards and stewardesses.
Right into the early 90’s, this was a dream profession. I watched an interview with a retired Air France executive who was working in the 70’s, who stated that only a very small share of young women was selected from the army of applicants, and they were considered so perfect that, on average, they were married after 7 months by the wealthy customers. As this was the 70’s, they often quit their jobs soon after.
An interesting side note is that it was not only desirable for the young women to become stewardesses but also for the wealthy clients to marry one. Wages and influence in the company were connected to that status. I know a Lufthansa stewardess who, living alone, managed to buy a 3-bedroom apartment in downtown Frankfurt in the late 90’s.
Compare that situation with today. Would a father advise his daughter to take up a career as a flight attendant at a low-cost airline? Pay is barely above minimum wage, and the only people still entering this industry are working migrants from countries which pay even less. Buying a 3-bedroom apartment in downtown Frankfurt? Impossible!
So, is operations doomed to a future of being a meaningless sidekick to the digital world?
The exact opposite is true. In a digital world, the only companies that have a future are those that manage to digitalize their operations.
However, in order to leverage digital solutions in operational processes, we need to change our ways— quickly and dramatically.
This book holds some good advice on how to do it.
If you assume for a second that your digital transition has already taken place, consider how do digital and operations go hand in hand? The answer is: surprisingly well! Surprising, because this is so rarely applied.
What makes perfect operations? It is usually about:
Repeatedly and quickly delivering identical and flawless quality, anytime
And if that sounds too theoretical, let’s take a simple example. What is perfect operations in an ice cream store? It’s an employee who scoops precisely the same-sized ice cream ball into a cone in a fast and friendly manner. They never make a mistake with regard to providing the correct amount of change, respect all hygiene protocols, and are available at the times at which people desire ice cream and also at short notice, such as if there is an unexpected heatwave.
But if you consider the following qualities:
Repeat
Quick
Identical
Flawless
Anytime
You are, in effect, not talking about the qualities of humans but the qualities of machines.
Stop trying to turn your employees into robots
The list of efforts put into attempting to make employees as robotic as possible is endless.
Training repetitive work (repetitively)—like my poor university friend, who was put next to a scale for half a day to learn how to scoop the exact right weight into one ice cream ball
Mystery shopper programs
Surveillance systems and automated KPIs on individuals—like ‘seconds per clean hotel room’
Incentive systems to achieve perfection
Legal tricks to evade working time regulations
Plus many, many more...
Apart from the fact that it is silly to try to make people behave like robots, it fosters the wrong culture and leads to the previously-described loss in prestige. If you optimize everything toward complete compliance with processes, there are two devastating results: people stop thinking about what they do (why should they not?), and the only possible deviation is failing in achieving perfection.
The latter leads to a loss of prestige because operations is only a subject in management if it fails. Operations such as this can never result in positive news: either the ice cream ball is perfect (no issue) or it is wrong (issue).
Upon seeing the monotony of the work, the outsider perceives operations as a group of morons screwing up every now and then. This is not a place which anyone with a choice would want to work in.
Let robots do the robot work
Foster the unique abilities of humans to organize how machines could take over this part.
As there is a big lag of digitalization in operations in general, there is no other area in which fruits are hanging so low.
Let’s start turning your operations into digital operations. Enjoy the read.
BUSINESS POTENTIAL OF OPERATIONS 4.0
It doesn’t take long to figure the difference in company value between a tech company and an old economy business: It is in the multiple of the turnover.
You can think whatever you like about the true value of a tech company, but it is a fact that, on the same turnover, their value is 6 to 12 times higher.
Without drilling too deep into the reasons (as it would lead us off topic), the fundamental investor expectation behind it is that the market sees a more promising future for tech companies than for old economy companies.
Old economy has a business – tech has a future
