The right and wrong ways to do BI
Business Improvement (BI) is often done wrong... Read along to see the typical mistakes, their cost and what can be done about it.
The true costs of BI done poorly
BI can be a dangerous thing, because when you don’t do it well it creates a lot of hidden costs to the business for years to come.
Firstly, there is the obvious - opportunities missed across the business to either reduce costs or improve revenues. These opportunities can be big or small. But even the small ones add up and can represent a substantial amount, particularly if your BI team fails to apply the broader theme in similar areas.
However, the more insidious problem is the cynicism that spreads across the organisation when your initial BI efforts fail to deliver. And while cynicism by itself is not the same as dollars to the bottom line - it can lead to tangible issues. There are many famous examples when companies become ‘allergic’ to all kinds of future BI efforts, so that even the best teams fails to deliver results later down the track - and often when you most need them.
Then of course there are the BI teams themselves. Nothing demotivates you more than your own inability to drive meaningful improvements through your work. It often doesn’t matter if the root cause is your own insufficient skills or rejection of your ideas by the business. The result is the same - a disempowered and disillusioned BI team, which simply bides its time in the hopes of better times to come.
You might as well not have a BI team at all, if these symptoms are familiar to you. You simply end up paying for ‘process’ - an illusion of intense (or not so intense) activity, but not a lot of tangible results to show for it.
Why does this happen?
Reality is, doing BI ‘right’ is difficult. BI itself is not a discipline that there is a good manual for. There isn’t really such as a thing as a ‘BI degree’, which you could get from reputable places, not even from Harvard University.
BI is a somewhat made-up function. And as you can imagine with functions that don’t have a clearly defined set of instructions for how to do it well - people often just end up ‘winging it’.
We’ve seen numerous cases where BI just becomes an activity that the HQ wants asset-based teams to have. A tick-the-box type of exercise. And staff that get appointed into BI teams don’t really have the right training to perform their duties well either. Often it’s personnel who decided they wanted to do something else for the sake of their own development, or those who became redundant in their original function. Either way, the result is that these BI teams often struggle.
This is just the BI teams themselves. But what about the broader organisation?
The other frequent challenge we’ve observed is that BI teams are not given the respect or the authority that they should deserve. The frontline or other ‘core business’ teams often think that the BI team’s ideas are just ‘a nice to have’. They find excuses to not really listen to those teams, and prefer to keep doing things the way they always have. And so - nothing really changes. And nothing really improves.
So what’s needed to do BI ‘right’?
Based on a decade (or so) of working with BI functions in various incarnations and capacities, we think that the answer consists of three parts: (i) BI skills; (ii) collaboration between BI and the business; (iii) the right processes to manage all key interactions.
When it comes to skills, it’s actually not so easy to describe what a good BI skillset looks like. It includes things like knowledge of the business. Otherwise, how else would you find improvement opportunities? It also includes things like a keen and sharp eye for finding improvements. Without it, even if you know the business well, you simply won’t notice things that can be done better.
What’s complicated is that these two things, business familiarity and an eye for improvements, can often be contradictory. After all, if you’ve spent long-enough inside the business to know it intimately, you often lose the ability to think critically about it. You also lack the broader awareness about how others might do similar activities at other organisations. You might even accept that the way you do it is the only way - as otherwise, you would have found a better way to do things a long time ago.
A keen eye is also hard to train. In many instances, you either have it or you don’t. Whenever we tried to train someone how to develop it, it was often difficult, as some people just want to follow clear-cut, explicit, step-by-step instructions for how to do something - which the BI process is often the antithesis for. BI is often like an open-ended research project, or like the job of a private investigator placed inside a business context. You don’t really know what exactly you’re looking for, until after you’ve found it.
But the good news is that if you’ve got people on your BI team who ‘have got it’, they will only get stronger and more effective the more practice they get. You just have to keep them motivated and hungry for more. And then diligently remove roadblocks that they face in their project, so that they can move quickly, and find and deliver those improvements for your business as effectively as they can.
Often, this is where the second part of the answer comes in - the ability of teams from across your business to collaborate with your BI team. Without this, your BI team is going to spin its wheels endlessly. And you’re not going to get the payback on your investment in having a BI team in the first place.
More often than not, that collaboration doesn’t come naturally. You have to work at it. You have to set an expectation that this collaboration is not optional. You also have to intervene and force this collaboration to happen when it veers off track. And when it does happen organically, you have to acknowledge and celebrate it. This is the only way that we know of for how to increase your chance of success in this area. If you simply leave it to happen by itself, you can most likely forget about it altogether.
And then there is the process. A process is something you need to combat the fact that people are often disorganised. Or even if they are not, they might get distracted by ‘more pressing priorities’, and forget to push your BI projects forward. A good BI process is set to ensure that these moments of weakness don’t derail your overall BI journey.
Luckily, a solid BI process is not rocket science. You simply need a means of establishing transparency and accountability (who is doing what, by when, and why these are the right things to work on). And then you need a periodic mechanism to force the teams to progress. Often, it can be as simple as getting the team together on a weekly basis and asking for structured updates on all of your key BI projects. And if there isn’t enough progress, asking why, identifying and discouraging excuses, and intervening to remove genuine obstacles.
What happens when you do it right?
When BI is done right, you can really feel it. There is positive buzz around the place. People celebrate their wins, and everyone is enthusiastic about upcoming improvements they are working on. And most importantly, there are tangible results you see in your P&L. Costs get saved, project timelines get compressed, revenue increases.
A well-functioning BI process is often a sign of a healthy organisation, with the right positive culture in place, which allows your BI team to thrive. It means that people across the business are bought in to the idea of continuous improvement. And that they prioritise helping deliver those improvements, rather than look for excuses for why things should stay the way they always have been.
If you can get your BI team into this kind of territory, your investment in having the team around is likely paying off tenfold. You just need to make sure they are working on the right things, and prioritising a good mix of projects - some financially-focussed, and some improving other, non-financial metrics like employee experience or reducing red tape.
In a nutshell, having a healthy BI team and process in place are worth the effort. And you should genuinely try to put them in place, in you haven’t already. You’ll either be glad you did, because of all the improvements they will help deliver for your business. Or you’ll learn something about the culture of your business, which might prompt you to address deeper underlying issues first. Either way, you would most likely win.