A year ago I asked the question: Is Offshoring a Disruptive Technology, in Clay Christensen's definition?

Well, it appears the answer is Yes. TPI's latest quarterly report on outsourcing shows a collapse in global market share of over 25% for the big players - Accenture, IBM, EDS, CSC - in favor of the Asian outsourcers. The number and value of US outsourcing deals has plummeted 70%, and shifted towards Europe and Asia.

Click to read more ...

Last week I presented our Business Innovation Factory work on the Primary Care Practice of the Future to the Art and Science of Services conference. A diverse group of folks gathered to swim in the emerging body of knowledge around Services Design - academics and practitioners from around the world, spanning design, marketing, IT, and operations research. What unified them was the understanding that the design, management and innovation of services is not well understood, not like we understand the product world.

Click to read more ...

John Parkinson, a guest columnist at CIO Insight, writes an interesting article on the conflict between organizations that have internalized Six Sigma, and the new imperative for innovation. We consistently see this in clients that have spent a few years getting Six Sigma built into their culture, and then reject the idea of experimentation or "fast failure" prototypes to try new concepts.

Where conflict occurs, it's often about the definition of unnecessary sources of variability. Many Six Sigma black belts (certified experts in the application of Six Sigma principles) tend to apply the principles as doctrine without regard to context or situational need. People should think outside the box and try different approaches to routine tasks, but the black belts see this as perverting their carefully optimized process by introducing unnecessary sources of variability. And it doesn't help to point out that repeating the process unchanged and expecting a different outcome is a good proxy definition for insanity.

Its completely understandable how corporate teams, who feel like they've just gotten on top of the last business transformation tool,would have trouble reconciling it with an approach that seems to fly in the face of everything that six sigma holds dear. But Parkinson has it right that the tools of innovation are complimentary to the tools of six sigma, and that we must learn to both optimize the core and create divergent experiments at the edge. 

Scott Williams, Chief Creative Officer for Starwood, has a television-trained eye for a story. But what he has learned at Starwood, a collection of well-known hotel brands including Westin, W and Aloft, is that the customer tells the best and most authentic story. Last week at the Art and Science of Services Conference, Scott showed showed how Starwood leverages customer observation to learn what customers want (or don't want), and then gives it to them.

Click to read more ...

Geisinger, a hospital system in central Pennsylvania, has been running a unique experiment for a year, and just presented their first results to the larger medical community. Borrowing a lesson from other consumer products and services, they have begun offering a 90 day warranty on heart bypass surgeries. The warranty, called ProvenCare, charges more upfront for the surgery, but covers any followup visits or care for complication for the critical 3 months after a heart bypass.

Click to read more ...