What Are the Keys to BPR Success in Creative Industries? A Behavioral Economics-Informed Approach

In creative industries, particularly in domains centered on mass media that I am involved in, ways of working that are dependent on craftsmanship and individualized decision making have long been mainstream. Planning, production, editing and dissemination processes are all underpinned by individual experience and intuition, with implicit knowledge being core to organizations.
However, even in creative industries, structural changes are proceeding at a rapid pace with the advance of digital technology, changing consumer behavior and transition in advertising revenue models. This has rendered the building of a sustainable competitive edge largely impossible through traditional operating structures. Traditional operating processes were also optimized for the earlier era of paper and broadcast media, so it is simply a fact that those processes cannot fully handle modern multichannel, instantaneous and personalized information flows, the use of AI and digital technologies, and globalization.

Amidst this context, BPR that combines organization-wide productivity and creativity through the visualization, standardization and optimization of operations is no mere matter of operational improvement. Instead, it has come into focus as a “means of fundamental transformation” that can fundamentally revise companies’ aims, structures and methods of operating. In irregular operating structures, particularly such as those of the creative industries, where there is a strong tendency towards individualization and where people work on a per project basis, implementing BPR may be exceptionally challenging, but it also has the potential to deliver extraordinary outcomes if successful.

BPR is a method of transformation that aims to standardize, visualize and streamline operations, and is thus something that aims to improve productivity across entire organizations. Creative human resources, however, as described above, characteristically put the emphasis on free thinking and sensibility, which can create barriers to implementing BPR when it comes to the following points (see Figure 2).

BPR calls for standardizing work at key points, while creative human resources enjoy a non-standard and improvised working style. Reducing work to “templates” can limit the creativity of creative human resources, which can give rise to pushback.

Under BPR, KPIs and numerical evaluations of work are the focus, but much of the output of creative human resources is qualitative or sensibility-based, so they can tend to be resistant to accepting evaluations that are put into numbers. This can lead to loss of motivation and distrust.

Creative personnel often perform work based in implicit knowledge and intuition, “visualization” and proceduralization of such work can be taken as restriction of such thought processes. Transitioning to more formalized knowledge can take time and come with psychological burdens.

BPR puts the focus on staged implementation and consolidation support, but creative personnel tend to emphasize ambiguity and improvisation, so they can feel that manual-based support and step-by-step change can feel onerous.

BPR is ultimately about having integrated operations organization wide, but creative personnel place greater focus on autonomy and tend to prioritize individual optimization. Uniform operations aimed at across-the-board optimization can invite resistance as something that takes away their freedom and discretion.

In contrast to the assumption of traditional economics that “people always make decisions and behave rationally,” behavioral economics is a field that analyses decision making taking into account the “irrationalities” of the psychology and behavior of real-world people. The field thus reveals how actual people behave and make decisions, incorporating insights from psychology and the social sciences. The field makes use of “habits” and “biases” that impact human behavior such as “nudge theory” (design that gently “nudges” people in the right direction), “loss aversion,” (the psychological tendency to avoid losses) and the anchoring effect (the tendency to be swayed by an initial piece of information) to research ways of naturally encouraging desirable behavior (see Figure 3).

Next, let us look at the following five steps as a general BPR approach. In particular, we will look at examples of approaches we can take at each step to incorporate behavioral economics theories together with the key points of BPR in relation to creative human resources who emphasize autonomy and creativity (see Figure 4).

First, we take stock of current operations. By surfacing and charting the key points in the workflows, stakeholders, deliverables and decision-making processes of projects, even for highly individualized work, we can get an overall picture of a company’s operations. In doing so, it is important to make holistic judgments about work where it seems that outputs and work hours just do not line up, taking into account perspectives from not only the operations in question but also related, surrounding work. In work-hour investigations, it is important to both hold interviews and perform on-the-ground observation. Converting operations from implicit knowledge into explicit knowledge will thus take considerable work. Here, for example, we could employ nudge theory and, rather than simply holding interviews when performing a work-hour investigation, we could first observe targets, then have them explain their behavior in their own words, naturally getting them to take ownership of the process, and potentially being able to lead them to the desired behavior while maintaining their freedom of choice.

Next, we drill down to where the inefficiencies, duplications, individualized tasks and bottlenecks in the company’s operations are. We then organize these elements using a framework such as eliminate, combine, rearrange, simplify (ECRS). Here, by making use of the anchoring effect, for example, we could put qualitative and quantitative KPIs into numbers and do a side-by-side comparison, thus potentially giving creative personnel a way of intuitively accepting the process, and potentially getting them to be aware of the difference with the status quo, backed by numbers.

Returning to the goals of the company’s operations, we next design an idealized workflow. While this will also have in view the introduction of IT tools and organizational restructuring, the key thing is to think starting from the work. For example, by integrating production progress management into a cloud-based tool and centralizing information sharing and progress management, companies aim to genuinely solve problems in their operations. At this point, taking into account, for example, the Paradox of Choice, across both regular and irregular work premised on avoiding loss of creativity, companies could present creative personnel with choices constrained only by minimal guidelines to allow them to perform simpler decision making.

Next companies should implement the operating model they have designed in stages, rather than all at once. In doing so, it is essential to get the understanding and cooperation of people on the ground. How companies design their education, training and feedback loops is important. For highly individualized work in particular, it will be necessary to continue carefully asking why changes are being made and what will happen as a result of change. By incorporating something like instantaneous rewards here, companies can give employees a sense of getting quick wins in the initial stages, thus potentially raising eagerness for ongoing endeavors.

Following implementation of BPR, companies should monitor outcomes through KPIs and continuously improve through a PDCA cycle. KPIs should be designed from both the quantitative and qualitative sides, including things like reductions in work time, decreases in error rates, improvements to the quality of outputs and improvements to customer satisfaction. By employing choice framing here, for example, companies can present proposals for improvement in multiple styles and have each employee choose their own style, thus lessening the sense of psychological resistance to integrated operations while respecting autonomy.

Finally, we should add that it is important to point the way to employee-first policies, such as defining the aims of BPR underlying these measures as being value creation, and not mere streamlining, prioritizing listening to the voices of people on the ground, and adopting designs wherein streamlining leaves enough room to not impede creativity, and it is important to keep conveying this message to people wherever possible.

For BPR success in creative industries, it is essential to not only rationalize operations, but also to have psychological buy-in and designs that respect autonomy. Leveraging the insights of behavioral economics, companies can promote natural transformation in individualized and sensibility-based work styles and achieve sustained improvement while minimizing pushback.
At ABeam Consulting, we have provided BPR support that aligns with such industry characteristics across numerous projects, and we boast practical approaches that incorporate scientific methods such as behavioral economics as one of our strengths. We hope that this Insight can offer your company prescriptions for achieving true BPR in creative industries.