So You Want to Improve Your Organization with AI? Do You REALLY Know What It Takes?

Picture: a visualization of the organizational capacity problem.

AI Doesn't Change the Rules

Organizations, especially mid-sized to large companies, but also smaller ones, struggle with getting any value out of their process improvement efforts. That's no wonder, as very few organizations have a clue what issues need to be in order before any success can emerge. Sure, there may be individuals in the organization who know theoretically, or at the meta level, how things should be, but this knowledge does not translate into an organizational capability, let alone to a mechanism that generates increasing organizational improvement capability at scale. This applies also to implementing AI, which is from a process improvement perspective just like any other technology that affects the interaction between people, information and materials in terms of time, quality and costs, with a defined output as the end result. There is nothing special about AI in that sense as AI does not remove the need for organizational improvement capability. If anything, it makes that capability even more important.

Let's assume that your process improvement effectiveness is at a sufficient level, i.e. you have arrived correctly at what should be done, and this issue requires that you change how the organization works and operates, i.e. some kind of cultural change in the desired direction and magnitude is needed. How you arrived at the answer, and what should be improved, play a crucial role in improving the organizational improvement capability. I will not discuss how this is done as it has been thoroughly discussed in some of my other blog posts. For the sake of simplicity, let's consider the dynamics of making the desired change happen, once you have arrived at what needs to be implemented.

Consultants Don't Build Capability: A Disclaimer

Consultants do not, by themselves, create organizational improvement capability. They may be good at pointing at problems, but bad at actually building any long-lasting, scalable capability into the organization. There are different consulting approaches as Edgar H. Schein has pointed out (expert model, doctor-patient model, process consultation) and depending on the need and actual case, the appropriate model should be selected.

Education and Training: The Real Lever for Behavior Change

What approach actually changes the behavior of the individual and the organization, i.e. the culture? One of the primary mechanisms for changing behavior and building capability is education and training. Naturally, you can also manage the behavior and its direction and speed, at least to some degree, via factors that strengthen the desired behavior or via factors that diminish undesired behavior. In this blog post, I will concentrate on education and training. Here, education refers to gaining the knowledge required to understand process improvement theory (philosophy, approaches, definitions, how everything fits together, etc.), whereas training is how you apply the theory in practice. Without the theory, you are not able to increase the ambition level or make good decisions. A high-quality theory, fit for the purpose, provides leverage in this regard. Training, on the other hand, is where the theory is applied in practice. A training output cannot be better than the underlying theory, so learning losses in the education and training phases negatively affect the actual implementation phase. Therefore, any decent improvement system or improvement effort needs to properly track the outcomes of education and training. A low learning level in these two areas makes it impossible to improve the organizational improvement capability in reality.

The 4%/40% Rule: Two Non-Negotiable Constraints

Every organization has constraints. In terms of improving operations, these constraints are more or less non-negotiable, at least if you really want to build long-term and scalable organizational improvement capability. Not coping properly with the constraints means that you will likely never achieve any improvement in the organizational improvement capability, and doing nothing becomes a viable option for saving money and time and avoiding motivational setbacks. Based on the High-Performance Process Improvement paradigm, two practical constraints become particularly important:

• The 4% time limit. In practice, allocating more than about 4% of annual working time (10 days) to improvement is difficult. This time limit includes all improvement issues end-to-end (analysis and synthesis, education, training, implementation, follow-up).

• The 40% critical mass. Without a sufficient "critical mass" of the organization understanding the improvement philosophy, approaches and tools, it is hard to realize any larger-scale lasting improvements. This threshold is about 40% of the staff. The level of understanding is paramount, as just having heard the terms, read an improvement book, attended a kaizen seminar or participated in an improvement workshop is not sufficient. The actual understanding needs to be properly verified, and this is a blind spot in many organizations aiming at real organizational improvements.

Five Dimensions You Have to Manage at Scale

Let's assume that all is good so far. How do you cope with the demands (4%/40% rule) above in practice? The improvement problem here is actually how do you educate and train the staff at scale so that you improve the organizational capability to implement the things that are needed? Well, let's ponder the requirements from this point of view. You have to manage five different dimensions:

• The organizational layer. Executives/directors, managers and employees have different learning needs and learn at different speeds, but you need to gain a proper knowledge and skill base at these three organizational levels before there is any chance of even aiming at improving the organizational improvement capability.

• The current knowledge level of the learners. Each person already has some understanding that should be acknowledged and built upon (low, medium, high understanding).

• Resistance to change or learning. Building organizational improvement capability requires that resistance to change or learning is dealt with properly at different and individual resistance levels (low, medium, high). Here, a method for bringing resistance to a manageable level is required. Resistance is a common issue in almost all organizational improvement efforts, and it needs to be addressed properly in all stages of improvement.

• Preferred learning logic. Individuals learn differently, at different speeds. This has to be addressed so that individuals can learn through linear (chronological) or non-linear (intuition-based) approaches to knowledge transfer, in addition to learning in a group or team, or through a combination of these.

• Quality assurance. What the individual has actually learned and is able to use in practice is of great importance when improving the organizational improvement capability, but depending on the role of the individual and the set ambition level, the verification level should be set to fit the case (light, medium or high quality assurance).

Making the Process Itself High-Performance

If education and training are themselves a process, then that process must also be capable of high performance. This process can be implemented in an organization using VISTALIZER for Enterprises as the dedicated technology.

If your organization is wrestling with the 4%/40% rule and wants a way to actually track and verify education and training outcomes at scale, get in pdca@vistalizer.com to see how VISTALIZER for Enterprises fits into your improvement system.