Sunday morning thoughts #1: Companies and executives running outdated business processes, outdated products or services and outdated technology.

When you work in Business technology or process consulting, you see a lot of times people or companies that use outdated technology or that are very negligent to accept a process improvement proposal or the adoption of new technology. Sometimes, they think that they are doing "fine", that things are going well as usual and that further improvement is not necessary. Sometimes, they think that they don't need to leave their comfort zone until their retirement, so it doesn't make any sense to adopt new technologies.

It happens a lot, that some people thinks that their process are the best of the best, and that they are so unique that no new technology can barely provide the huge benefits that they are already getting with their "secret sauce". And most of the times, their companies are getting very poor financial results, even if the operative and tactical KPI looks great.

For example:

1. "Look at that machine utilization!!! 95% WOW"
2. "Look at our low employee turnover!!! Least than 8% annually"
3. "Look at my sales department!!! 300 orders today"
4. "I just send the purchase order by e-mail to my supplier"

But there's always another side for this story:

1. "Look at that machine utilization!!! 95% WOW": Yes, your utilization is great, but you produced an excess inventory of our commodity products instead of high profit orders. Also, you consumed scarce raw materials that we needed for the high profit orders, not to mention that we have some stock outs.
2. "Look at our low employee turnover!!! Least than 8% annually": Yes, we have a high employee loyalty level, but did you notice that the 8% that leave the company were the most skilled ones? That they get lured by a better salary elsewhere so we need to spend more money training the people that will replace them and that we will have a learning curve that will produce poor results while they get the required skill level, only to have a high chance to leave again? Did you notice that many of the ones staying are the ones that do not get offers from other companies?
3. "Look at my sales department!!! 300 orders today": Nice. 300 orders. So many shipments. Now, tell me about the sales price. Tell me about profit. Tell me if you sold the products with higher margins. Tell me how many cancellations are you getting on those orders or how many credit memos are you giving on them. Tell me about the NET profit on your sales operation. By the way, regarding your sales force, tell me if they are prospecting new customers, up-selling or cross-selling or if they are only taking commodities orders. Tell me about the level or innovation or new products orders you are getting.
4. "I just send the purchase order by e-mail to my supplier": Nice, you should be so productive. Is that a purchase order for a box of 10 pencils? Did you get 3 different proposals to get the most cheap? Did you spend half your day getting quotations, proposals, making a comparative spreadsheet in excel, did you presented that to your boss and finally, you extended a PO by e-mail to the supplier? Good boy. Half your day for a $2.50 USD PO.

Process improvement, along with the right technology, the right people and a clear strategy, delivers the best outcomes to reduce the risk of having great operative performance spending time in things that deliver shitty results.

If you think that you don't need a better process or better technology, chances are that your competition (another company or maybe another executive) is already working on that. And chances are that they will out grow you quickly and that by the time you would like to react, it will be too late.

Don't get mad at me. Life has provided lots of examples.

1. E-Commerce is kicking traditional retail. Just ask Sears, J.C. Penney to mention a few.
2. Media streaming (Spotify, Netflix) is kicking traditional entertainment. Just ask Blockbuster or any movie theater chain (Not to mention the COVID effect).
3. E-Services is kicking the travel, hospitality and many services. Just check out how Uber is killing the traditional taxis, how Airbnb if affecting the Hotel industry and how Rappi, Uber, Cornershop are affecting their respective industries.
4. Construction materials? High scale house and buildings 3D printing on the way.
5. Oil? Tesla.
6. Financial industry? Banks? Well, you can do anything from your mobile app. Why do you need a bank teller anymore?

If you, as a company are not looking to improve your process, to adopt new technology or to deliver new, innovative, added value products or services, chances are that you will disappear in the next 20 years. Don't tell me that you are doing great with your actual process. Don't tell me that you are so unique that no one can help you. Stop looking in the mirror and start looking at the industry trends, at the competition, but not at traditional competition but competition coming from disruptive innovative ways that aims to replace your actual product or service.

If you, as an individual, are not looking to expand your network, to learn new skills, to learn new technologies, to adopt new processes or to provide value getting out from your comfort zone, chances are that you'll get kicked from your job and that it will be difficult and painful to find a new one that could pay as much as you are doing today. Don't blame your age, recruiters, millennials, immigrants or the economy. Be an adult, take responsibility and blame yourself.

So, my best advice. Keep moving. Learn. Explore. Innovate. If you don't do it, there is someone that is already. Change is coming and is closer that you think.