[MUSIC] We have all been witnessing of an organization. And definitely, in real life, we find that what we have designed on paper and formal organization is not happening. Why is that? Is it because people don't want to behave in the right way? I don't think so. What is happening is that we put people under certain conditions that makes them behave as they do. But they try to do their best. We have found again and again at BCG, some people are well intentioned. They want to do good, but sometimes they cannot. Let me give you an example. It's related to IT and certain inter quality of service. It was a big attention, and with this big attention, they realized they had an issue. The issue was profitability was going down. And what was the reason? There were two reasons. The first one is customer satisfaction was going down, and discounts were going up. And the utilization rates of the hotel was also going down. They found out that the main issue was about service quality and they said we should increase service quality and then people will come back to our hotel. And because they will be satisfied they will not be asking for a discount. So the obvious choice or answer was to give a big training to everyone in the hotel in service quality. How to be first class in service quality. So everyone was trained, and after the training, big surprise, profitability decrease accelerate. Why was that? To understand what was happening, we had to go on the field and look at our client were treated and what was happening with all the people in the hotel. One of the main persons in the hotel is the receptionist. Usually, he or she is a young person. Quite young, very dedicated, very willing to work and wanting to progress, as they want to please the customer. So basically, the first thing we said is, you know, these people seem to be okay, they don't want to do wrong things. But how do you please a customer? People tend to come at 5 o'clock in the evening. Starting at 5 until 8 o'clock. When people come, and they go to their room, if there is a problem in their room they call the receptionist, and then the receptionist tries to help. First thing they do, they go to the room and if the television is not working or if a lamp is not functioning, they try to find a new for the television or try to replace the lamp, try to help. It takes a bit of time. Why do they do that by themselves? Because at 6 o'clock, the technical service are not there anymore. Then they go back to the reception, and what is happening at the reception? If the hotel is full, there is a long line. If there is a long line, and people are waiting, people start to shout, and no one likes to be shouted at. Then imagine at 10 o'clock, a client wants to have a sandwich. If the cook has left at 10 o’clock and the receptionist can do nothing about it, either she or he has to do something about the sandwich themself, or just to say to the client, sorry we are closed. I'll give you a discount tomorrow. So the next morning, for the client who are not very happy and eat there a lot, they will give discount. And the next day, they will stop to help. After a few weeks of that, you've been shouted at, when a client comes and call and say, my television is not working, or the lamp is not working, what do you say? You say, okay, sorry, I give you a discount, but you don't go up in the room again. And when you understand after a few more weeks that more people are in the hotel, the more you have troubles. When people start to call at 4 o'clock or 3 o'clock in the afternoon and say, do you have a room available? And you see that the hotel is pretty full. You say, no there's no room. It's finished. So that explains why in a very rational way the receptionist actually will be having result. So what do we change? What do we make sure we have the right behavior? The question was that the receptionist was the weakest actor in the system. There was no power over the cleaning people. The technical people or the cooks. So, basically they were themselves against the clients, and what could they do? They could give discount and make sure that the hotel was not full. That was all they could do, so they were using their resources. So what we did, we invest to say. We said to the receptionist, you will now be evaluating everyone. So if someone is not behaving in a good way, because the television isn't working, you will have your say. So the receptionist will assess cleaning people, technical people in the group. And then each and everything with more power, the receptionist was about to access a better influence on everyone and to be able to increase both service quality of course I'd use discount and then you didn't care if the hotel was full or not. Because everything was going right, so by doing that, profitability increased and then we have the right behavior and the right organization. So how do you do that? In an organization, but in IT specifically. At BCG, we have, we are lucky to have Yves Morieux who is a sociologist. Yves Morieux has designed a new methodology which is called Smart Simplicity, taking into account, from this example, what you need to do to be the right organization with the right behavior. It's applied sociology. So applying sociology with smart simplicity has four steps. The first one is understanding and defining what are the roles. What is happening on the field. So this is great sociology. Because it's feel like you go in an environment and you try to understand what is happening, and what type of behavior you want to have. What are the roles. Firstly, the second thing is identifies other dependencies. In order to have the right role, to be able to execute the role. What do directors, how do directors need to cooperate? This is very important. In the case of the receptionist, he or she has to cooperate with many different departments. So you need to identify that. And find the right cooperation mechanism. This is the third step, the regulation mechanism. If you want people to perform their role, and to cooperate in the right way, you have to put in place regulation mechanism, because otherwise they will not do it by themselves. There will be tensions, there will be conflicts. Conflicts are good, but you have to regulate them. So, how to regulate? You can regulate with the sixth rule of small simplicity. I will just give two rules. The first one which I love is about the shadow of the future. If I have to cooperate with someone, but, as you know, usually I don't want to cooperate. So if I'm the head of the factory in IT, and I want to estimate this product, and if my counter part is a IT application manager who wants to innovate. If I know that my next job is going to be IT application manager, maybe I will look at my IT application manager in a different way. I will not say no every time. I will say next time, I will be in this position. So, I cannot say yes all the time, but maybe I can make things go a bit smoother. So that's one way to do it, to shadow the future. Another way is to increase all of integrators. So what is an integrator in IT, for example? When I have a problem between two departments, front and back office, I tend to put people in the middle office to solve the problem between front and back office. So, in IT, what is a front and a back office? Front office could be people doing the engineering for application, designing the right IT architecture for application. And back office could be the people doing engineering for the technical landscape. So doing the infrastructure architecture. So if I put middle office, of engineer trying to make the communication between the application engineers and the engineers, actually you have two problems. Because then they have two interfaces. One interface is between the front and the middle office and one interface is between the middle and the back office. So instead of doing that, why don't I give the full responsibility to one of them? Why don't I create an engineering department with both of them and give them the responsibility across the whole cycle. This is an integrator, and I can give him the whole. So, typically this is a regulation mechanism in which all people cooperate, and it's very important. And finally, you have to express all this on paper and in whole mandates. People need to understand what you ask from them, so you need to express it to the people a little bit more than a job description. You need to explain to them, okay, this is your job description. That's your role. This is the people you will have interdependencies, you need to work with. This is the regulation mechanism you can use. These are the PPIs you will be measured against. And if you explain that to people, then they will start to understand how to behave. What we like to do, is to do role play. Before putting in person organization, I ask people to take certain roles, and then we see how they behave. It's very effective. But the most effective things for you is to go back to your organization and work on the floor. Looking at people. Asking them question like, what do you do every day? Do you like it? What are your issues? What prevents you to do your role when? Are you happy in your job? If you do that, and if you ask the right questions, then you will be able to design the right organization with the right organization mechanization. So go and enjoy the work. And enjoy talking to people, and asking the right questions.
