Enabling Disruption; Understanding the Speed of Change.
by Mike Carnell (published on 07/25/2019)
“Takt time may be thought of as a measurable beat time, rate time or heartbeat. In Lean, takt time is the rate at which a finished product needs to be completed in order to meet customer demand.”
“Described mathematically, takt time is:
Available time for production / required units of production”
The concept of Takt time is fundamental to the Toyota Production System (TPS) and/or Lean. It is the basic tempo that a factory needs to produce product to run efficiently and effectively. There are many discussions around the number and its calculation, but it is the concept that is important here. In its most basic scenario, it is the speed that will maximize cash flow by not committing the waste of over production. Also, the same applies for going in the other direction, producing too slowly, which ultimately results in a customer shut down because you are late. It is a synchronicity that is beneficial for both the producer and customer.
In 1970 Alvin and Heidi Tofler wrote a controversial book titled “Future Shock.” It introduced concepts that, at that time, were very new to the general public. By their definition “Future Shock is the shattering stress and disorientation that we induce in individuals by subjecting them to too much change in too short a time.” The concept of Future Shock introduced the concept of an increasing rate of change. Gordon Moore introduced Moore’s Law became “the golden rule for the electronics industry and, a springboard for innovation.” Moore’s law is not an actual Law of Nature, but it has held it place for in excess of 35 years.
Technology and Change
How do we do in terms of absorbing this accelerating rate of change. Interestingly there is another Law that applies, Martec’s Law that applies to organizations matching the technology rate of change. Martec’s Law states: “…. technology changes exponentially, but organizations change much more slowly (logarithmically). This leaves a huge gap.” 
A System Level View
Martec’s Law brings us full circle. We have a mismatch between the speed that technology is moving and the ability of companies and people to change. That is a basic Takt Time issue. There are two different tempos. The mismatch in tempos is going to drive stress and disfunction in the people involved in the organizations i.e. future shock, that are not changing at the speed to stay current with technology.
The technology engine is driving the global economy at an increasing rate of change. That technology, unless it hits some type of physical barrier, is not going to slow down. The profit incentive is too high. The organizations that need to match the takt time of the technology engine are not keeping pace. That is good news for startups and bad news for the larger lethargic corporations. The people, who are part of the larger organizations, are being left behind because of the rate of change. The larger companies continue to deal with Change as a standalone issue. They deal with it in isolation and continue to grouse about sustainability. The prognosis is not good for the general population. More stress and disorientation.
We hear about this mismatch in takt time daily. We have even created a new word for it – disruption. The mismatch may not actually create the disruption, but it enables it. When technology is moving very quickly, and lethargic companies cannot keep up they create an opportunity. That gap in today’s global environment gets filled very quickly by any one or any organization with more flexibility and more speed. Typically, these are the startups that carry less baggage, so it appears as the “new phenomena” we have labeled disruption.
We have created this entire narrative around it of the young hard charging entrepreneur. The rebel with disdain for all the rules who goes from the disadvantaged childhood to the over night industry poster child rising from Silicon Valley and sharpening their teeth on the bones of all the other phenomes that have preceded them.
I do not want to be perceived as disrespectful to all the amazing work that has come from Silicon Valley. It has been a very impressive show for a very long time. There are amazing people in there. The true cautionary part of this message is that those people are still in Silicon Valley. Raised with the image of Steve Jobs and Bill Gates as their superheroes. They are looking for opportunities. Looking for that chink in the armor. While the lethargic companies sitting around pontificating about innovation and sustainability of change are painting very large targets on themselves for the young and the restless.
You don’t believe me? Look at Jeff Bezos. What did he do to get started? He sold stuff just like Sears, K-Mart, JC Penny, etc. While they sat around with their CPA’s discussing cost cutting to make their current process profitable Amazon created a new model. The internet is the new storefront. Amazon connected concepts and leveraged technology. Anyone of those stores had the money and resources to do the same thing. While they contemplated making the old process profitable, they opened the door for disruption. I am not taking anything away from Jeff Bezos and Amazon because they made a gutsy move but if only one of the others would have been more willing to change and had the vision, they could have slowed Amazon down and made it a fight for the market. That opportunity is long gone. Those dinosaurs are partying in Jurassic Park and Amazon is what we used to call DTR (down the road). They are not even looking in their rear-view mirror because as ferocious at T Rex was he is now irrelevant.
Tying It all Together
Fact. The engine has left the station. Innovation and technology are driving the train. You can commiserate about your lack of innovation. Purchasing cheap parlor tricks to make people who either lack innovation or are innovative and stifled by your environment, won’t fix this. You need to fix your innovation and figure out who you should be watching.
Being good at change is insufficient. You must be world class and you don’t get that way benchmarking your competitors. That just gets you to be the fastest pig in a pig race.
This is a global economy. If you intend to survive you need to learn to compete globally. In the words of Jack Welch “If the rate of change on the outside is faster than the rate of change on the inside, the end is near.” That rate of change is increasing exponentially to Moore’s Law Leaving you to manage Martec’s Law.