Daniel Burrus — October 24, 2018 — October 24, 2018
Today, business performance is measured by transactional throughput and is commonly captured in a set of transactional metrics such as revenue, investor ROI, manufacturing capacity, service level performance, available to promise, etc. Commonly, the operations of a business are defined as the transactional activity. Yet, the definition of a business operation encompasses both its transactional operations and its cognitive operations. To break through current ceilings of business performance, the processes in both the transactional operations and the cognitive operations must execute with excellence.
Transactional operations of an organization
Commerce activities represent the transactional operations. Professionals are involved in planning and management of tasks to execute customer, supplier and employee transactions. Task-oriented processes occur before, during and after the customer journey. ERP, SCM and CRM software helps professionals responsible for transaction management execute transactional operating processes.
Examples of transactional responsibilities
- manage sales transactions
- manage marketing campaigns
- procure products and services
- fulfill orders
- capture accounting activity
- schedule materials
- manage inventory turns
- plan for distribution
- forecast financial performance
- service customers
- manage human resources
- compensate employees
Executives have invested significantly to evolve the processes on the transactional side of their businesses.
Cognitive operations of an organization
The cognitive operations comprise teams that think and communicate perspectives for a living. These teams are internal and external to the organization:
- senior executives, senior managers and other professionals
- management consultants, board members, lenders and insurance providers in the services ecosystem
- investors, analysts, supply chain partners and business partners, who are part of the extended enterprise
- regulators and educational institutions, who are standard setters
In a cognitive operations, professionals think critically, collaborate, communicate with their stakeholders, make decisions, advise other professionals and monitor uncertainties. As professionals perform mindful work, they often experience gaps in their knowledge that lead to uncertainties. Uncertainties stall decisions. Cognitive processes represent the work that takes place in their minds.
Cognitive operations exist across industries, such as oil and gas, life sciences, private equity, management consulting, environmental management, asset management, space, insurance, banking, aerospace, defense, healthcare, government and education, etc. Below are some examples where critical thinking, stakeholder communications and performance advisory occur in life sciences for their cognitive work:
Examples of cognitive responsibilities in pharma
Chief Medical Officer
- develop corporate strategy
- brainstorm with clinical key opinion leaders around clinical challenges
- create quality control measures for clinical trials
- ensure performance among clinical and regulatory teams
- collaborate with health authorities
- communicate with regulatory authorities
- perform due diligence research on business development opportunities
- monitor investment in clinical programs
Chief of Staff
- improve processes to enhance operational efficiency and effectiveness
- identify Hard Trends to strengthen the accuracy of forecasts
- prepare CEO for stakeholder meetings
- ensure innovative qualitative and quantitative measurements
VP, Drug Process Development
- apply anticipatory thinking and new tools to transform processes
- demonstrate process reliability
- verify process effectiveness
- build process control strategy
VP, Drug Manufacturing Process
- ensure a stable design environment
- assess drug degradation
- link material attributes and process parameters to CQAs
- demonstrate linkages between process and product reliability
- track outcomes for each changing state
- establish feedforward and feedback controls
- anticipate and monitor failure conditions
VP, Corporate Development
- craft risk-managed pricing
- evaluate portfolio implications
- analyze integrated due diligence
VP, Supply Chain
- use new tools to transform supply chain processes
- communicate supply chain risks and opportunities
- simulate implications of a supplier failure
Professionals in the cognitive operations either accelerate or constrain their cognitive performance based on their mind-set and the technologies they use for their mind’s work.
Professionals in the transactional operations benefit from software architectures for their responsibilities. Yet professionals in the cognitive operations don’t have the same capabilities to perform their jobs. Rather, they have their job descriptions, their experiences and their minds; they utilize multipurpose software in the form of spreadsheets, presentation software and word processing documents. Leaders and managers do not have a software architecture designed to elevate their cognitive responsibilities. Nor do they have a way to think through their uncertainties in a Socratic manner. These issues are critical for a cognitive operation to advance and gain a competitive advantage.
In working across organizations for decades, we’ve seen a theme in which leaders and managers who seldom take enough time to think through uncertainties the first time around is high. Yet there seems to be enough time to revisit the topics a second time as problems arise. Beyond time pressures, confusion persists around how to think through uncertainties. The lack of clarity regarding how to manage uncertainty has led leaders and managers to spend more time managing the crisis and less time managing new opportunities. By learning to identify the Hard Trend certainties that will happen, anticipatory leaders learn to innovate with low risk and have the confidence certainty provides to make bold moves.
What is cognitive excellence?
Anticipatory leaders and managers exhibit cognitive excellence through a constant flow of insights and foresights that resolve uncertainties. These professionals become a critical resource to highly effective cognitive operations. They are go-to professionals, whether they exist in an organization, in the services ecosystem or as part of the extended enterprise. Organizations need to instill these anticipatory capabilities in their professionals to achieve greater business performance.
“Past performance is not a predictor of future results.”
This performance caveat is attached to any investment in the stock market, and it applies in business too. Future performance is dependent on anticipatory skills and cognitive excellence. Professionals face change all the time. Some say change is the only constant; in fact, it’s accelerating at an exponential rate, which creates additional uncertainties as well as new certainties! It’s challenging to achieve cognitive excellence in the minds of professionals consistently today without anticipatory skills and software that:
- define the cognitive gaps
- illustrate aberrations in future performance through measurable evidence
- trigger questions of uncertainty in your mind
- move you from uncertainty to greater certainty
That’s why cognitive excellence doesn’t just come from experience. It comes from advancing the capabilities of professionals with:
- anticipatory leadership skills
- a responsibility architecture for their cognitive work
- an agile and anticipatory mental framework to help them address change across situations
- software spaces to perform their mind’s work
The ability to nimbly address questions of uncertainty through a repeatable Socratic process greatly enhances leaders’ and managers’ capabilities to perform at a very high level as key contributors to their organizations and their clients’ organizations. This is how professionals can transform the performance of their businesses.
As professional teams elevate their cognitive capabilities toward excellence, their organizations transform into highly performant cognitive factories. Professional teams leverage each other’s thinking through a uniform process to visualize performance patterns for their minds, where they gain insights and foresights. Anticipatory professionals not only pre-experience their own uncertainties, they also help their stakeholders pre-solve their questions of uncertainty, too.
The cognitive era is shaping the coexistence and interdependence between humans and machines. This new era demands leaders to advance the capabilities of their cognitive processes. As machines learn, humans must focus their time and attention in areas where machines are far less effective. Professionals need to redefine and reinvent their business models, markets, products, services and processes to provide the next level of value for their clients. Anticipatory leaders and managers need to focus their time on the layers of both uncertainty and certainty where future state thinking is needed and reassign current state thinking to others. That’s how they’ll continue to differentiate their personal and business brands. Professionals need to accelerate their learning and get comfortable with uncertainty through the use of higher certainty frameworks. It’s imperative for organizations to get on board with elevating their cognitive performance. Waiting will cost organizations the value of cognitive insights and foresights, while your competitors grow their knowledge.
Machine learning is causing a shift in the workforce — an emerging crowd of retrained professionals whose jobs are increasingly occupied by machines. This requires cognitive professionals in their current roles to manage the knowledge gap between themselves and their new human rivals. They accomplish this by advancing their cognitive skill sets, learning to become anticipatory leaders and through the use of technologies built the way they think about uncertainties.
Learn how to elevate your planning, accelerate innovation and transform results with The Anticipatory Learning System.
By Daniel Burrus and Neil Smith
Business & Finance Articles on Business 2 Community
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