Innovate and solve problems to keep your business alive
Read the news, blog posts, many articles, from companies and investors; the whole world is talking about innovations. Why do we need Innovation, and how does it impact a business anyway? In this article, we analyzed a business’s functional structure and shown that consistent (not occasional) Innovation & Problem-solving must be in place to ensure business success.
Functional Modeling is an analytical tool built to help in problem-solving and innovation.
Before we start the analysis, allow me to remind you of the main principles of Functional Modeling (FM).
Purpose of Functional Modeling
Learn how the system works
Define functional and problematic components
Think in the right direction
Functional Modeling Process
Define and map components of a system and related components
Define and map a functional relation between the components
Rank and find the most functional and the most problematic components
Think, think, and think…
The main definitions
Product – the purpose that the system was designed initially for Components – the parts of the system Supersystem components – the parts that do not belong to the system but interact with it Function – the interaction between Subject and Object changing a parameter of an Object (if no parameter change there is no function)
The characteristics of a function
Useful or Harmful
Insufficient or Excessive
Below, are the components’ and functions’ symbols used in functional modeling:
For our analysis, we incorporate an engine, a transmission, and a working organ into the “Production Unit.”
The FM of the typical stagnating business can be shown as follows:
Energy feeds a Production Unit which creates the Product. A Customer is buying and using the Product. The Sustaining Control Unit analyzes customer’s feedback and provides relevant information to the Production Unit to ensure the sustainability of the process.
The sequence Production Unit → Product → Customer → Sustaining Control Unit → Production Unit forms a sustaining feedback loop.
In real business, Sustaining Control Unit provides insufficient function. Besides, a Production Unit generates Harm in addition to the Product.
Harm reduces the profit of the business. However, we can treat the “Harm” as an opportunity to develop the business.
We should introduce the “Innovation and Problem-solving Unit” to investigate the Harm. The information has to be forwarded to the Development Control Unit that is responsible for the improvements in the business production process.
Functional Model of Developing Business
By investigating and reducing the “Harm” we provide an opportunity to advance the business.
Here, the sequence Production Unit → Harm → Innovation & Problem-solving Unit → Development Control Unit → Production Unit forms the development loop.
The activity of two alternative loops: Sustaining and Developing that support alternative functions ensure the health and success of a business.
The results of the functional and problematic ranking
The ranking of the later Functional Model indicates the following:
Innovation & Problem-solving Unit received the highest Problem rank – it means that this unit is responsible for the business success. An improvement of this Unit’s performance will result in business success.
Production Unit received the highest Functional rank that seems reasonable but also has a significant Problem rank due to the fact that it creates Harm.
Steering alternative (contradicting) Units – Sustaining and Developing got the same ranking that indicates the equal contribution to business success.
Harm has the only Functional rank because it is the source of advancements and improvements.
Innovation and problem-solving should be a continuous process and should be an inseparable part of any business activity. The Innovation and Problem-solving Unit should be an integrated part of any business.
Suppose the management is requesting urgent actions to improve yield, reduce cost, or search for new customers. What this really means is that the Innovation & Problem-solving Unit either doesn’t work properly or does not even exist in the business.
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