Generative AI as the New Quality Movement
GenAI Provides Operating Leverage if You Empower the Organization
The quality movement taught us the importance of embedding core techniques such as statistical process control, fishbone diagrams, and process evaluation deeply within the organizational fabric. Employees were trained and ranked based on their expertise, from white belts to black belts, ensuring that the principles of quality were not just centralized but ingrained across all levels. This democratization of quality tools and knowledge led to significant improvements in efficiency, productivity, and customer satisfaction.
Organizations have been automating the physical world for over 120 years; structured data for about 60 years. We have only begun to seriously automate undstructured data with the advent of LLMs and their progeny — that is about 18 months. I believe we will see at least as much productivity, innovation and consumer benefit from this wave as we did from the other two.
In this context, centralizing GenAI capabilities could be a strategic misstep. GenAI's power lies in its ability to process and enhance unstructured data and interactions, tasks that permeate every level of an organization. From customer service to R&D, finance, and human resources, the potential applications of GenAI are vast and varied. Centralizing GenAI capabilities risks creating bottlenecks and underutilizing the technology's potential to innovate and improve processes organization-wide.
Parallel to the Quality Movement
The adoption of GenAI should mirror the ethos of the quality movement by:
Democratizing GenAI Knowledge and Tools: Just as quality techniques were taught organization-wide, businesses should aim to provide GenAI education and tools to employees across different functions and levels. This ensures that everyone can identify and leverage opportunities for improvement in their respective areas.
Establishing a GenAI Skill Framework: Adopting a belt system for GenAI skills could help in categorizing and developing proficiency levels among employees. This framework would encourage continuous learning and application of GenAI tools, fostering a culture of innovation.
Continuous Improvement with GenAI: The quality movement emphasized the Kaizen principle of continuous improvement. Similarly, organizations should adopt a mindset of ongoing refinement and enhancement with GenAI, using it to streamline processes, enhance decision-making, and improve customer experiences.
Action Plan for Executives
Assess how urgently your organization needs to understand and use GenAI, using our WINS framework put forth in this HBR article. If your firm is “in the crucible” or “holding a lever” get going immediately.
Educate and Enskill: Initiate comprehensive training programs on GenAI for employees at all levels. Focus on practical applications and ethical considerations to ensure responsible use. Begin with simple use and no risk pilots and graduate to a set of white belt, green belt and black belt capabilities
Develop a GenAI Skill Framework: Implement a structured program similar to the belt system of the quality movement. Recognize and reward advancement to incentivize learning and application.
Foster a Culture of Learning on Practical, Simple Tasks: Encourage experimentation and the use of GenAI across departments such as marketing, customer service, software, legal, etc. Organizing in a decentralized manner to enable local experimentation.
Set clear objectives in cost reduction, innovation and quality improvement. As with the quality revolution, unstructured data and the opportunity to create value is spread throughout the organization and with clear top level objectives, but decentralized capability more value can be discovered.
Monitor, Measure, and Iterate: Establish metrics to gauge the impact of GenAI initiatives. Use feedback and results to refine strategies and training programs continually.
In conclusion, by enskilling organizations with GenAI capabilities in a manner reminiscent of the quality movement, businesses can unlock unprecedented levels of innovation, efficiency, and competitiveness. It requires a strategic vision from leadership, a commitment to education and empowerment, and an organizational culture that champions continuous improvement and technological advancement. Industrializing unstructured data, has potential to not only expand margins, and make your firm ore competitive — for some, it will lead to an entirely transformed business and operating model. If you are a high WINS firm, don’t wait.