How your company can encourage innovation from all employees

Companies around the world benefit from the ideas and innovations of their frontline employees to improve their products and processes. The Kaizen This approach, originating from the Toyota production system, has been instrumental in driving performance through the generation and implementation of ideas by front-line employees. The basic notion behind kaizen is that a continuous stream of practical improvements results in substantial gains in productivity and quality over time.

Although the practice is rooted in manufacturing, kaizen has also proven effective for knowledge work such as auditing, advertising, and banking, where the innovative input of employees is particularly valuable. Employees understand very well which tasks require human intervention, and they know where and how automation can best do routine manual work. And they often have an interest in automating routines, which frees them up for more interesting knowledge work.

Of course, much knowledge work is already digitized. But the approach we present here, Digital Kaizen, enables knowledge-intensive companies to better leverage the experience and knowledge of frontline employees at scale to deliver knowledge work automation that actually works. Let’s see how accounting giant PwC and other companies have applied digital kaizen to accelerate the efficient automation of many time-consuming processes.

Create employee engagement

In previous innovation studies, we’ve seen how good front-line ideas are retained, bad ideas are submitted, and some ideas can get lost in translation, hierarchical layers, and organizational silos.

Employees rarely perceive their idea’s evaluation and selection to be transparent, and often it’s not clear why an idea received low ratings or was rejected. And while front-line employees are in the best position to detect changing business conditions and opportunities, they are usually the least heard (because they are at the lowest level of the organization). In a nutshell, it is difficult to get employee commitment for kaizen improvement, even if companies have already digitized their processes.

The digital kaizen approach is to create an internal platform (think internal “app-store”) that allows front-line employees to submit ideas, providing them with no-code or low-code toolkits that allow them to turn their idea directly into a working prototype that can be easily tested and improved. At accounting firm PwC, for example, front-line auditors have used such a platform to develop a host of “copy-and-paste” algorithms that automatically read data from a set of source documents, apply basic arithmetic , then write the processed information to another target document or application.

To date, PwC Citizen Developers, as platform contributors are known, have created over 7,000 automations on their digital kaizen platform. In the US branch alone, more than 95% of partners and staff (about 55,000 people) are active on the platform.

Scaling Solutions

Another problem with frontline innovations is that solutions don’t spread easily between locations or separate units. Ideas are often “sticky” to their specific client, specific creator, and specific characteristics of the process. To complicate matters, distinct organizational units can suffer from the “not-invented-here syndrome”. As a result, potentially good ideas are often overlooked or ignored.

Kaizen digital platforms can help avoid this. First, users can search for solutions offered by citizen developers and use the platform’s tools to adapt the solution to their own needs, thus becoming citizen developers themselves.

But this feature alone is not enough. A key condition of scalability is that the solution solves a problem shared by multiple target users and meeting this condition usually requires the idea contributor to check with their peers for the benefit of automating a certain task (usually , a time-consuming and error-prone process) and understand how the task is performed by different users. It also requires additional development effort to ensure that the solution can adapt to multiple and varied uses.

To encourage these information-gathering and development efforts, PwC automation leaders offered citizen developers incentives for building scalable solutions: bonuses, career advancement, and recognition as a citizen developer. related to the adoption and use of his automations by colleagues. User downloads, usage levels and ratings are tracked by the platform, allowing PwC to seamlessly link user performance on the platform to rewards.

And because the platform makes it easy for users to modify a solution themselves, it allows others to create new “versions” of any given solution, making it even easier to scale ideas. automation. For example, an auditor in PwC’s office in San Francisco may modify the solution of his counterpart in Berlin, as their similar businesses differ only in country-specific data entry formats.

What is the essence of the dissemination and absorption of digital kaizen solutions? Productivity gains can increase over time because they can be harvested repeatedly at zero marginal cost. Together, PwC’s 7,000 automation solutions have been downloaded over 5 million times and have automated over 7 million hours of work (the rough measure of PwC’s productivity gains).

Manage the process

Many companies have workforces eager to help digitally transform their work. In this context, we have identified five essential factors for the success of digital kaizen.

Strengthen awareness.

As with any successful change initiative, it helps to establish broad awareness of the current state of digital capabilities and processes. At PwC, for example, the Digital Kaizen initiative started with a self-assessment of employees’ digital skills via a digital fitness app. To create a sense of urgency and seriousness around the issue, C-level executives released the results of their own assessments, including their shortcomings.

Improve frontline skills.

Most front-line employees are not programmers, and programming is not their main job. But it is often easier to transfer – through trainings or hackathons – digital skills to users than it is to pass information about user problems to digitization specialists. And frontline workers want to improve their skills. At PwC, digital skills courses were oversubscribed by a factor of three. As the approach gained momentum at PwC, the training originally delivered through “digital accelerators” was replaced by a suite of training modules available to all staff.

Updated organizational roles.

The role of “citizen-developer” is much more than a badge. It must be officially recognized and supported by training. Businesses can allocate paid time to citizen developers to build automations and be held accountable for the results. They can also award titles and degrees to reflect different levels of expectations, skills and roles in digital kaizen – by analogy with the iconic “green” or “black belt” levels of lean manufacturing. At the Romanian software company UIPath, for example, the most basic level is the “automation consumer”, which does not develop, but contributes ideas for automation. At the next levels, citizen developers can be either “self-users” who primarily build automations for themselves, or “power users”, who build automations for larger communities of users.

Rewarding and motivating.

As we’ve seen, PwC ties download rates and user ratings to monetary incentives and performance reviews, creating even stronger incentives for employees to engage in digital kaizen. But directing incentives towards diffusion does not necessarily require monetary incentives. For example, at global marketing and advertising company Dentsu, some employees were more driven by company-wide visibility and a “strong, selfish need to get rid of boring tasks,” according to the manager. automation from Dentsu. Employees are powerfully motivated by making their daily tasks less repetitive, championing their digital tools and thereby showcasing their digital skills. Quite often, citizen-developers list their tools in their resumes, along with download and usage statistics.

Governance: Balancing creativity and control.

Companies can introduce some level of management control by defining appropriate “citizen rights” for digital kaizen platforms. These rights evolve around development and download (“who can develop and download which tools?”), approval (“which solutions require specialist approval?”), download (“who must or can download?”) and adaptation (“who can modify which parts of the tool?”). Answering these questions helps companies manage the tension between the creativity of decentralized idea generation and the need to maintain consistent standards across the enterprise.

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Pioneers of digital kaizen, such as PwC and the other companies we mention, have found that the approach can be applied to other digital solutions beyond the automation of standard knowledge work processes. Indeed, at its core, the idea of ​​digital kaizen is about managers’ willingness to leverage the intrinsic motivation and skills of their frontline employees and engage them in autonomous innovation to drive the digital transformations of their businesses. And it won’t just be about automating information flows.

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