Sunday, April 13, 2008

Orchestration

How do you create predictable results in your business? Once you've figured out that an innovation is useful and you've quantified its impact, how do you implement it in your system? You orchestrate it. Orchestration is the elimination of discretion to help produce predictable results. Orchestration is about creating order, standardization, and quality in a predictable way. In The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It, Michael E. Gerber writes about Orchestration.

Discretion is the Enemy of Order, Standardization and Quality
Gerber writes how Orchestration is about eliminating choices to achieve order, standardization and quality:

Once you innovate a process and quantify its impact on your business, once you find something that works better than what preceded it, once you discover how to increase the "yeses" from your customers, your employees, your suppliers, and your lenders -- at this point, it's time to orchestrate the whole thing.

Orchestration is the elimination of discretion, or choice, at the operating level of your business. Without orchestration, nothing could be planned, and nothing anticipated -- by you or your customer. If you're doing everything differently each time you do it, if everyone in your company is doing it by their own discretion, their own choice, rather than creating order, you're creating chaos. As Theodore Levitt says in his stunning book, Marketing for Business Growth, "Discretion is the enemy of order, standardization, and quality."

Orchestration Creates Predictable Results
Gerber provides examples how Orchestration produces predictable results:

"If a blue suit works, wear it every single time you're in front of a customer," is the dictum of the disciples of Orchestration.

"If 'Hi, have you been in here before?' works better than anything else you've tried, say it every single time you greet a customer." is the rule of the day from the disciples of Orchestration. By every disciple of Orchestration, I'm referring to anyone who has ever seriously decided to produce a consistent, predictable result in the world of business, no matter what business they are in.

If You Don't Own It, You Can't Depend On It
Gerber writes that Orchestration is the key to owning your business:

Because every founder of every great Business Format Franchise company, whether it is franchised or not, knows one thing to be true: if you haven't orchestrated it, you don't own it. And if you don't own it, you can't depend on it. And if you can't depend on it, you haven't got a franchise. And without a franchise no business can hope to succeed.

A Franchise Is Your Unique Way of Doing Business
Gerber writes that your franchise is your unique way of doing business:

If by a franchise, you understand that I'm talking about a proprietary way of doing business that differentiates your business from everyone else's. In short, the definition of a franchise is simply your unique way of doing business. And unless your unique way of doing business can be replicated every single time, you don't own it. You have lost it. And once you've lost it, you're out of business!

Your People and System Must Be Predictable
Gerber writes that orchestration is the key for predictability:

The need for Orchestration is based on the absolutely quantifiable certainty that people will do only one thing predictably -- be unpredictable. But for your business to be predictable, your people must be.

Then what? Then the system must provide the vehicle to facilitate predictability. To do what? to give your customer what he wants every single time. Why? Because unless your customer gets everything he wants every single time, he'll go someplace else to get it! Orchestration is the glue that holds you fast to your customer's perceptions.

Orchestration is the Certainty
Gerber writes that orchestration is the key for predictability:

Orchestration is the certainty that is absent from every other human experience. It is the order and the logic behind the human craving for reason. Orchestration is as simple as doing what you do, saying what you say, looking like you look -- being how and who you are -- for as long as it works. For as long as it produces the results you want. And when it doesn't work any longer, change it.

Key Take Aways
Here's my key take aways:

  • Orchestration is the elimination of discretion or choice. Initially I had an averse reaction to this, but then I realized the point is to carry forward what works and avoid figuring out everything on the fly. It's about baking your lessons learned into your system so you can free yourself up to worry about other things.
  • The purpose of Orchestration is to create order, standardization, and quality. The point is to make your results more systematic vs. lucking into success.
  • Your people and systems need to be predictable. For your business to be predictable, your people and systems need to be predictable.
  • When your Orchestration no longer works, change it. This sounds obvious, but in practice I often see people that don't change their approach when it's not working. Part of it is because they don't know it's not working and the other part is they don't know what to change to. That's why I think knowing your numbers and having a lot of reference examples and a good network to draw ideas from is key.

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3 comments:

shilpan said...

JD,

I, being a hotelier, can relate this analogy of orchestration to franchising hotels and its standard operating rules.

Shilpan

J.D. Meier said...

Shilpan - I'm curious about the keys to your orchestration. What have you found works best?

I know that the Air Force makes heavy use of checklists to systetize and share knowledge. I know many fast food chains also use checklists.

Shilpan said...

In franchised hotels,

1) There is standard operating procedure for,

cleaning, front desk, computer systems and software.

2) They enforce a standard training modules across their chain.

3) They use standard procurement practice by selecting few vendors

I hope it make sense.

Shilpan