LABS

What is it?

LABS have been proven to have the most significant results when the challenges are difficult and structural in nature. It is results driven, has clear deliverables and will be strongly anchored to the company's Profit & Loss (P&L). Ultimately it seeks to make a big impact on the bottom line. The underlying philosophy is that the people who can close the gap frequently exist in the company itself. LABS methodology acts as the enabler by selecting the right mix of people, putting them together in a room and empowering them to take on the challenge.

The name labs comes from 'laboratories', i.e. it is a space which functions as a controlled environment for experimenting with new ways of working or doing business. It does need a dedicated physical (and/or virtual) space with supporting tools, top management commitment and the mandate to make changes across functions.

Labs have been used by several companies from at least twenty years ago with great results. For example, Shell started to use labs, in collaboration with McKinsey, in the 1990's. Labs in its fundamental design work to either increase revenue or reduce costs. The labs methodology has quite quickly expanded in Malaysia since the introduction of it by YB Datuk Seri Idris Jala to MAS and subsequently as one of the pillars of the Government Transformation Programme (GTP) through Pemandu.

Commitment needed of those who participate

LABS is an intensive approach to create solutions and implement them through a team of people selected for their potential contribution to the challenges. The team will be empowered to 'go far', and needs executive sponsorship. The team members are normally fully committed to the lab - they will have to delegate their day-to-day job to others when participating in a lab. They must clearly understand the current situation; need to define their change agenda; need to commit to measurable success criteria, and need to understand the Key Business Activities.

The team is made up of credible participants from cross-functional businesses; this is a very important aspect of running labs. The participants need to be people with diverse views and perspectives, and who are not afraid to speak their minds. This will enable high energy dialogue with considerable time spent on intensive generation and formulation of ideas. These ideas on related issues will go through extensive syndication with relevant parties and seek buy-in from key stakeholders. Senior support needs to be in place such that the LABS Team do not have to spend time on political positioning, fighting against protection of people's turfs or dealing with ego's. Labs are all about improving the business, and that's it.

Characteristics of labs

The LAB is a busy place with several key activities happening at the same time. There is the understanding of the problems / challenges, developing ideas, testing ideas and solutions with key stakeholders and sponsors and developing action plans. A lab ideally has 3 or 4 teams working at the same time on different aspects of problems / challenges. Sophisticated templates are used to compile key data, collect ideas that are generated, prioritize ideas and actions that have the biggest P&L impact and track progress against issues with relevant stakeholders and sponsors. By anchoring on the P&L and breaking down the P&L so that it makes operational sense, people are exposed in terms of their accountabilities; there is no place to hide in the P&L.

The LAB is a live event and at certain critical moments there will be 'yes/no' or 'Go/No Go' decisions that are needed to be made in relation to whether certain ideas need further development or not. The same applies to developed solutions and implementation plans. The decision making and support systems must be available to ensure that this is done in real time. It is thus that Labs are characterized by a continuous iterative process for addressing difficult issues and accelerating development of solutions.

Roles of those who participate in labs

In each lab there are different players who'll have different roles to play, for example;

Lab leader

• Manage all those with an interest.
• Ensure the expectations of all those involved are satisfied.
• Examine self-performance continually.
• Ensure leadership behavior in the team stays positive.
• Manage lab activities' integration and interfaces.
• Monitor progress and track the lab targets and deadlines.
• Maintain senior management commitment.

Lab member

• Support lab plan and implementation.
• Provide constructive challenge to the ideas, methods and output generated.
• Participate actively in the lab discussion, de-briefing and syndications.
• Both passively and actively communicate the lab content to the organization.
• Cooperation with/and help other team members to progress the lab.
• Create conducive environment for teamwork to happen.

Lab facilitator

• Grow ambition toward the radical.
• Protect the lab from "push back".
• Help discussing difficult issues, ideas for radical change, etc.
• Maintain focus on value rather the turf.
• Guide and facilitate lab/team process when necessary.
• Support the members and results of the lab.

Main outputs

• A plan of action to turn around profitability (business driver is 'desperation') or to increase business performance (business driver is 'aspiration').
• In a full scale LAB, testing and implementation of action plans.
• Capability to roll out the turn-around / increase business performance approach to the rest of the organisation.
• A breakdown of silos within the organisation.
• The beauty of labs is that besides generating better business results, by the process of running them and the exposure to X-silo issues which the participants get, they also develop much better leaders.