John Seddon

It’s NOT about the nail!

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It not about the nailSo there’s a fabulous (yet very short) YouTube skit called ‘It’s NOT about the nail’.

Many of you will have watched it…and if you haven’t then please watch it now before reading on – you won’t get this post if you don’t.

And I bet that those of you who have seen it before will want to watch it again (and again).

(though please see my ‘PC police’ note at the bottom 🙂 )

So, why am I using this clip? What’s the link?

Well it struck me that this is a brilliant systems analogy!

Let me explain:

Let’s assume that the woman is an organisation and the man is outside it, looking in.

The script might go something like this…

The organisation: “It’s just, there’s all this pressure you know. And sometimes it feels like it’s right up on me…and I can just feel it, like literally feel it, in my head and it’s relentless…and I don’t know if it’s going to stop, I mean that’s the thing that scares me the most…is that I don’t know if its ever going to stop!”

[Turns to show the outside world the reality of the situation]

Outside:     “…yeah…well…you do have…a ‘command and control’ management system.”

The organisation:     “It’s not about the management system!”

Outside:     “Are you sure? Because, I mean, I’ll bet that if we got that out of there…”

The organisation:     “Stop trying to fix it!”

Outside:     “No, I’m not trying to ‘fix it’…I’m just pointing out that maybe the management system is causing….”

The organisation:     “You always do this! You always try to fix things when all I really need is for you to listen!”

Outside:     “yeah…see…I don’t think that is what you need. I think what you need is to get the ‘command and control’ out…

The organisation: “See! You’re not even listening now!”

Outside:     “Okay, fine! I will listen. Fine.”

[Pause]

The organisation:     “…it’s just, sometimes it’s like…there’s this achy…I don’t know what it is. I’m not sleeping very well at all…and all my workers are disempowered and disengaged. I mean all of them.”

[Pause. Searching looks between the two]

Outside:     “That sounds…erm…really…hard.”

The organisation:     “It is! Thank you 🙂 “

[Pause. Reach forward to reconcile….]

The organisation:     “Owch!”

Outside:     “Oh come on! If you would just…”

The organisation:    “DON’T!!!…”

[(usually) The end, unfortunately]

But let’s not stop there and just cope with the nail….

…to the point:

To successfully and meaningfully change a system towards its purpose, you need to look from the outside-in. You cannot achieve this looking from the inside-out.

Deming was very clear on this point: “The prevailing style of management must undergo transformation. A system cannot understand itself. The transformation requires a view from outside.”

Seddon wrote “When managers learn to take a systems view, starting outside-in (that is, from the customer’s rather than the organisation’s point of view), they can see the waste caused by the current organisation design, the opportunities for improvement and the means to realise them. Taking a systems view always provides a compelling case for change and it leads managers to see the value of designing and managing work in a different way…

…but this better way represents a challenge to current management conventions. Measures and roles need to change to make the systems solution work. You have to be prepared to change the system…”

In a similar vein Einstein is credited with the saying “We cannot solve our problems with the same thinking we used when we created them.”

A catch:

Gosh, it sounds so simple….let’s just look from the outside-in shall we? But, unfortunately, it isn’t that simple.

Here’s Stafford Beer with why not:

“…a new idea is not only beyond the comprehension of the existing system, the existing system finds it threatening to its own status quo…the existing system does not know what will happen if the new idea is embraced.

The innovator fails to work through the systematic consequences of the new idea. The establishment cannot…and has no motivation to do so…it was not its own idea…the onus is on the innovator…[but] the establishment controls the resources that the adventurous idea needs…”

Blimey, that’s a bit depressing isn’t it!…which is an opportune moment to remind you of my earlier ‘Germ theory of management’ post.

You/I/we won’t succeed by trying to push the idea onto the system. We need to make ‘it’ curious and want to pull the idea at the rate that understanding, acceptance and desire emerges.

So it IS about the nail! …Oh never mind.

(if you watch the YouTube clip again, I expect you will find it hard not to mentally overlay the above script onto it now! I know I do.)

Comment for the ‘Political-Correctness’ police: I ‘get’ that the clip is stereotypical about the differences between men and women…I ‘get’ that men will likely find it funnier than women…but, come on, it is very funny.

Okay, okay…I am more than happy to post an equally funny clip (to address the gender balance) that sends up men…here’s a good one: ‘Man flu’

What do germs have to do with modern management?

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5248_1651_2006-021If a hugely important message is so different to how people currently believe and behave, how do we best help people ‘get it’ and, even better, passionately ‘jump ship’?

I’d like to use an excellent ‘germ theory’ analogy, written about by Myron Tribus (see credit at bottom of this post).

Imagine it is the year 1869…

Louis Pasteur has recently demonstrated that fermentation is caused by organisms which are carried in the air. Joseph Lister has applied Pasteur’s work and experimented with the first antiseptic and found that it worked to prevent infection after surgery.

Between them (and others), they have opened up a whole new theory – the germ theory of disease.

However, their contemporaries, the doctors administering to their patients have no understanding of this knowledge. Worse, current practises contaminate patients with virtually every action taken. Surgeons routinely operate with unwashed instruments and unwashed hands and then ‘sew death into the wound’ with unsterilised needles and unsterilised thread. Some people recover, some stay the same, but many die. In each case, some rationale (from what is currently believed) can be used to explain the outcome.

Today we cringe at the actions of these doctors…but at that time the medical world believed in a totally different (Miasma) theory and, as such, the practising doctors were constrained by this thinking. These professionals knew no better – they were prisoners to the state of knowledge of their profession, to the current way of thinking and were under pressure to conform, to follow ‘best practise’. They could not apply what they did not know or believe.

So, going back to the year 1869…the American civil war has recently ended. Imagine you are a young researcher in an American medical school and you have learned about these incredibly important new European developments in germ theory. The spread of such knowledge is rather slower than it is today (there’s no internet, no email).

You want to spread the new germ theory knowledge and the importance of sterilisation! You’ve been invited to speak in front of a group of distinguished doctors. They have achieved their fame from heroic work as surgeons in the field during the war (they are very good at sawing limbs off!)…but your underlying message to them is that they have been killing their patients.

So your task is to persuade them to forget what they have been taught, to abandon the wisdom they thought they had gained through many years of experience and to rebuild their understanding around a new theory…but think about this:

  • they have a very nice life based on what they have been doing (respect and prestige in their community, a nice house, some fine horses and a few servants);
  • you are effectively telling them that they are (currently) a menace…that they are dangerous!
  • …what about their reputation if this ‘gets out’?

How do you go about winning them over? Do you think they will be glad to hear you?

Let’s apply this analogy to management

Here’s the preface to W. Edwards Deming’s important book ‘The New Economics’:

“This book is for people who are living under the tyranny of the prevailing [command and control] style of management…Most people imagine that the present style of management has always existed, and is a fixture. Actually it is a modern invention – a prison created by the way people interact.”

Deming’s book (and his famous lectures) goes on to explain that what is considered as ‘best practise’ in management is in fact not…and that, instead, it is doing much harm and there is a better way….which sounds rather familiar to trying to educate doctors about germs in the late 1800s.

Now there are successful companies (think Japan for starters, and many forward thinking companies) and hugely respected educators (Ackoff, Scholtes, Womack & Jones, Seddon,….) around the world that have taken on and advanced Deming’s work. Deming is for management what Pasteur and Lister were for medicine.

But Deming’s message is some mouthful for the successful ‘command and control’ Executive to take!

In the same way that the doctors wouldn’t have liked to hear the “you are killing your patients” message, neither would an executive who has ‘got to the top’ using their knowledge and understanding of the traditional ‘command and control’ management system.

So what reactions should we expect from the 1869 doctors and today’s ‘command and control’ executives to a new way of thinking? Well, that depends on how the message is delivered!

One way will result in denial, the other curiosity (by some) to learn more.

Rational vs. Normative change

So what actually happened? Well, the doctors fought tooth and nail against the idea of having a sterile environment. “What, stop to wash my hands…don’t be silly. I have important things to do!”

But, consider this. Those doctors who were curious leapt ahead…those who wouldn’t change eventually became ridiculed, sidelined and even ruined. It took time…but the new theory eventually won out.

So back to delivering that message…here’s a comparison of two intervention methods:

  • Intervention Method 1: Rational change – This is the idea that you can use logical arguments to rationalise the proposed change (you explain, they listen)…but, if you do this, they will always map what you are saying onto their current world view (which is the very thing you are trying to change!) and then they will defend their current thinking since they know no better – this results in denial. You won’t get any traction here!
  • Intervention Method 2: Normative change – This is where you get them curious to look for themselves, to study their system (stand back, observe, collect information, consider) and thereby open their eyes to that which they could not see. Then, and only then, will they be ready to change. This change in thinking (unlearning and relearning) is achieved through experiential learning – people don’t deny what they see.

So, the task is to get ‘command and control’ leaders to become curious and then help them study their system, to open their eyes to what is actually happening….and then work with them to experiment towards a new way of management.

There are a couple of obvious ways to begin this study:

  • Demand: Take them to where the demand comes in (a branch, a contact centre, the mail) and get them to listen to/ observe demand. Get them to classify this as value or failure demand… get them thinking about what they ‘see’;
  • Flow: Get them to follow some units of value demand all the way through the current system, from when the demand first arose (from the customer’s point of view) all the way to when the customer achieved a satisfactory closure (to them) to their actual needs. Get them to identify the value work, seeing everything else as waste…get them thinking about what they ‘see’.

…now they should be curious to think about the why, why, why.

“Okay Steve, we get the ‘germ theory’ example….but what’s your supposedly missing management theory?”

Well, actually, it’s not just one missing theory – there are four!! I’ve put an introductory table at the bottom of this post if you are curious 🙂

Deming aptly referred to the understanding of these four theories, and their inter-relationships, as ‘profound knowledge’. Obviously, my simple (rational) writing about these can’t change anything much…but it might help you when studying your system.

So who’s this post actually written for?

If you are reading this, are part of the system and already ‘see’ some or all of the new way, then it is to explain to you that rational change is unlikely to work…so try to go down the normative change track with your leaders.

If you are a leader who is responsible for the system, then this post is merely to make you curious. I cannot rationally convince you that there is a far better way than your existing ‘command and control’ management system but I can help you study and learn for yourself.

…and finally, on a positive note…

Not everything that the doctors, or ‘command and control’ managers did was wrong. They did what they could with what they knew and they were sincere in their efforts to do the right things.

Four missing theories from command-and-control management:

The theory of:

 Meaning…: Which will show the madness of:
A system When we break up the system into competitive components, we destroy value of unknown magnitude.

What matters most is how the components fit, not how they act taken separately.

 An unclear purpose, vertical hierarchical silo’d thinking, continual reorganisations, cascaded personal objectives, and the rating & ranking of peoples’ performance;

Failure demand and waste
Variation There is natural variation in everything: we need to understand the difference between a signal and noise.

Targets are ‘outside’ the system and cause dysfunctional behaviour.

 Binary comparisons, targets, traffic lights and tampering.
Human Psychology Understanding people and why they behave as they do (particularly in respect of motivation, relationships and trust). The use of extrinsic motivators, such as competitive awards and incentives (and a misunderstanding of money);

Management by fear and compliance; Treating people as the same, an obsession with ’empowerment’ and the missed opportunity of developing people
Knowledge True learning and development occurs through experimentation (e.g. PDSA) – from a theory that is properly tested and then reflected upon…leading to true and sustainable improvement.

Benchmarking and implementing solutions rather than experimentation; saying something is ‘an experiment’ when it’s not; a focus on results rather than their causes; Speeches and workshops rather than Gemba walking.

After thought: ‘Germ theory’ is but one example of a scientific theory that could have been used as the analogy in this post. In generic terms, ‘old knowledge’ hangs around for a while in spite of our efforts…but it does eventually die out, allowing us to move forward.

Credits:

  • The analogy comes from Myron Tribus: ‘The Germ theory of management’ (1992), SPC Press
  • The intervention thinking comes from an enlightening email exchange with John Seddon

Image: I had some fun looking for an appropriate image to go with this post. I came across some gruesome pictures of 19th century (unsterilised) amputations but, given that some of you might not appreciate seeing this, I limited myself to just showing you a 19th century surgeon’s instrument kit…and those of you that want to can let your imagination run riot 🙂

Enough rope to hang ourselves

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NooseIf you pick up a shiny new thing, perhaps a tool or methodology but don’t have a true understanding of the underlying thinking….then you’ve probably just found yourself with enough rope to hang yourself.

Note: I don’t put myself above being at risk of suffering this condition 🙂

Take John Seddon’s failure demand concept, which is explained in this earlier ‘marbles’ post. Once you’ve (re)read it, you will see that the failure demand concept is REALLY easy to understand and potentially incredibly powerful. In fact, it causes ‘light bulb’ insight moments.

But wait, don’t rush off just yet. Why do we get the failure demand?

Oh, too late, someone’s rushed off…

John Seddon uses the example of a senior civil servant in the UK Government finding out about the failure demand concept and (using their existing command-and-control mentality):

  • a) mandating that local authorities will, from now on, collect and report (to central government) on failure demand using a standardised method; and then, once this was in place
  • b) setting targets to reduce it, likely putting in place ‘performance incentives’ for successful reduction…which then require the judging of people’s performance .

So, what do you think would happen?

Well…

  • Step a) causes under-reporting of failure demand. People start off very cautious and don’t like exposing it to a command-and-control hierarchy that jumps to blame and usually then goes on to dictate ‘solutions’;
  • Step b) causes the reporting of only the failure demand that they believe can be reduced or removed within their control….so that they can then show great success against the set target and gain the rewards on offer;
    • …which hides the most important cross-departmental failures;
    • …and means departments throw work over the fence to other silo’s (moving rather than removing the problems) and arguing between each other as to who is claiming what benefits;
    • …which leads to the ‘centre’ (policy dictators) to introduce controls and auditing of the results to catch ‘cheaters’ (which requires new work, requiring resource…which is waste)

Therefore the data collected is incomplete and distorted whilst the initiative looks really successful, paying out incentives for things that could easily be achieved anyway. Yet the system hasn’t changed, much of the failure demand remains hidden and much energy (and money) has been spent in wasteful activity.

Looking at this, what is the knowledge that was missing?

They didn’t stop and think to study why the failure demand was occurring. They jumped to use their existing management thinking in the hope of quickly ‘solving’ it.

A huge caveat: “To remove waste, you need to understand its causes”.

“Treating improvement as merely process improvement is folly; if the system conditions that caused the waste are not removed, any improvements will be marginal and unsustainable.” (John Seddon)

If they had studied their system, they would have seen the effects caused by:

If they understood their system, according to its purpose (from the customer’s point of view) and then designed it to allow the people within it to understand its capability (NO targets) and then collaborate across its components (No contingent rewards) to experiment with improvements….then they can successfully identify and remove failure demand…with no need for the waste of monitoring.

Moving on to waste:

Many organisations do the same ‘enough rope’ trick when it comes to waste.

They are taken through Taiichi Ohno’s 7 types of waste, with the 8th waste of untapped human potential added for good measure.

Each waste is explained, with examples, and some really good ‘class room’ understanding is achieved. Some of the more tricky waste concepts (like inspection and transport) take a bit of time to cement into place….but people ‘get it’.

…and so they are off, with their ‘waste spectacles’ donned, looking for waste.

But it goes awry when objectives (with targets) get set around waste reduction, and rewards are tied to achieving this. Management become waylaid with the categorising and reporting on the waste. They have now entered the same ‘existing management thinking’ game as is described above.

To be clear, Ohno didn’t want waste to be classified and reported, he wanted it to be removed. His reason for setting out 7 types was only to assist in spotting it….it is waste to spend your time categorising and reporting on waste!!

What you actually need to do is understand the root cause: why is the waste occurring…and this is far deeper than the process. It usually comes down to the current management thinking (which is rooted in management’s beliefs and behaviours).

Then, and only then, can you actually remove the waste.

Here’s a John Seddon quote that is worth taking some time to ponder:

“Fads and fashions usually erupt with a fanfare, enjoy a period of prominence, and then fade away to be supplanted by another. They are typically simple to understand, prescriptive and falsely encouraging – promising more than they can deliver. Most importantly, fads and fashions are always based on a plausible idea that fits with…management’s current theories and narratives – otherwise they wouldn’t take off.”

Don’t let failure demand and waste become ‘fads’ – they are not. They are very real things which drastically harm an organisation’s ability to meet its customer purpose…but we need to go deeper and understand the why, why, why.

Outstanding!

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Hello-My-Name-is-SlackerWhen I discuss my posts on performance appraisal and contingent rewards with people I get a lot of great understanding and support…but there’s always one question that pops up: “but then how will you deal with the slackers?”

Putting to one side whether our management instruments actually ‘deal with the slackers’ at the present, I find this an understandable response from within a command-and-control management system.

I usually find myself responding with:

“…and why do you think they are ‘slacking’*…do you think they want to perform an unfulfilling job all day long? Do you think this is how they started out when they got the job?”

(* if indeed they are ‘slacking’…our activity measures may present a different story than reality)

I then usually get: “yeah, but there will always be some people who take the p1ss!”

This uncovers a pretty hollow view of people. I’m not criticising people for thinking this …it’s more a recognition of the likely environments that people have had to endure through our working lives.

I would respond with a Deming quote to ponder:

“Anyone that enjoys his work is a pleasure to work with.”

  • You and I want to enjoy our work…and the environment that we work within will have a monumental influence on this;
  • I absolutely ‘get’ that there will almost always be a small % of people that sit outside the normal bell curve…but should we be designing our management system for the 5% or the 95%?
    • Do we tar everyone with the 5% brush?
    • Do we effectively yet compassionately deal with this 5% now?
    • Does it make sense that people ‘decay’ to being seen in this 5% bracket?

Regarding dead wood: “Why do we hire live wood and kill it?”

Kohn puts a deliberate order to his suggested actions (see the bottom of the ‘Exercise in Futility‘ post) and he most certainly doesn’t stop at removing contingent rewards and stopping performance appraisals…this is actually the point at which the real (and interesting) work can start to be done, with the process performers on collaboration, content and choice.

Okay, so you still think you’ve got a slacker:

If we are to consider the ‘slacker’ accusation, we also need to consider the other side of this coin, the supposed ‘talent’. Together, we can call these ‘outstanding performers’ where, as Scholtes explains:

We need to “use ‘outstanding’ in the statistical sense, not in the psychological sense.

Statistically*, ‘outstanding’ refers to something occurring outside the current capabilities of the system.” …and therefore it makes it worth investigating as to what is happening and why.

* Note: There is variety in everything. We should not be tampering when there is nothing special about this variety. So ‘John’ achieved more than ‘Bob’ this week…big deal, we would expect differences…but is it significant, and is it consistently so?

Scholtes provides the following guidelines for our response to outstanding performance:

First: Determine for certain if they are truly outstanding:

  • Does (quality) data (properly) substantiate this ‘outstanding’ performance?
  • Does this data cover a sufficient timescale to indicate consistent performance at this lower or higher level?
  • Is there consensus among the outstanding performers’ peers (from observation, not gut reaction or rumours)

If the answer is ‘No’, it’s not actually outstanding!

If the answers to the above are all ‘Yes’ then:

Second: Investigate to discover what is behind this occurrence (using data!):

If the person is ‘positive’ outstanding, do they (for example):

  • use better methods which can be taught to others?
  • put in more hours?
  • have a wider range of skills?
  • have more experience?
  • have more native talent?
  • …

If the person is ‘negative’ outstanding, do they (for example):

  • need to learn a better method?
  • need to pick up speed?
  • need coaching or mentoring for a while?
  • lack the basic requisites for the job?
  • …
  • are they going through a difficult period?

And, depending on the explanation:

Third: Formulate an appropriate response:

For ‘positive’ outstanding:

  • teach methods to others;
  • provide higher pay* to recognise their change in market value (* but NOT contingent!)
  • provide more latitude in job definition

For ‘negative’ outstanding:

  • coaching, mentoring, training
  • provide greater structure for a while
  • get counselling and support
  • find a more appropriate position
  • …
  • Finally, sensitive and fair dismissal

If you take the last response, you still have a systems problem – you need to deal with how you ended up with this scenario.

Seddon deals with the issue of an individual’s supposed poor performance (and it being considered a ‘people problem’) in a similar vein to Scholtes. Put simply, there’s a whole host of questions that need to be asked about the system in which the individual operates before you can fairly arrive at the conclusion that the problem is with the individual.

The categories of questions, in order, are:

  • Is it an information problem? (do they know purpose, capability, flow?)
  • Is it a method problem? (waste? system conditions such as structures, policies, measurement, IT?)
  • Are extrinsic motivators the problem? (i.e. distractions from intrinsic motivation)
  • Is it a knowledge problem? (necessary knowledge to do the job?)
  • Is it a selection problem? (necessary attributes to do the job?)

All of the above are the responsibility of management to resolve.

  • Finally, is it a willingness problem?

Then, and only then can you conclude that you probably have the wrong person for the job.

“95% of the reasons for failure to meet customer expectations are related to deficiencies in the system…rather than the employee…

…the role of management is to change the system rather than badgering individuals to do better.” (Deming)

It’s very easy for a manager to blame a person. It’s a lot harder for them to work out what the systemic cause is. One of these approaches can improve the system, the other cannot.

A final Deming quote to ponder:

Question from ‘Management’: [what you are saying] “implies the abolition of the annual merit rating system [performance appraisals] and of management by [cascaded] objectives….but what will we do instead?”

Deming’s response: “Try leadership.”

A Service Revolution!

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RevolutionService is different to manufacturing…and this difference is gob-smackingly important for a service organisation to understand if it is to truly move towards its (stated) customer purpose.

I was recently passed a link to a Malcolm Gladwell TED talk by a colleague and whilst watching it I thought…

“Nice! This is a simple tie-in to the incredibly important concept of variety in customer demand.”

So here’s the link to the very watchable talk (18 mins): Choice, happiness and spaghetti

Here’s the key points from the talk:

  • that Howard Moskowitz (a psychophysicist) had his ‘aha moment’ that “they had been looking for the perfect pickle…but they should have been looking for the perfect pickles“;  
  • the false assumption that the way to find out about what people want is to ask them….leading to years of fruitless and misleading focus groups. The truth is that:
    • people commonly don’t actually know, or cannot (and even will not) express, what they want; and
    • they will be constrained by what they currently know. “No customer asked for an automobile. We have horses: what could be better.” (Deming)  
  • the importance of horizontal rather than hierarchical thinking about customer demand: we thought that customer demand was hierarchical (from cheap up to expensive products or services). Instead, there are only different kinds of products and services that suit different kinds of people;
  • that, instead of looking for one way to treat all of us, we now understand the importance of variability;
  • when we pursue universal truths [one standardised product/ service/ way of doing things], we aren’t just making an error, we are actually doing our customers a massive disservice;
  • We need to embrace the diversity of human beings

Hang on a minute….

So, I started off this post by saying that service is different to manufacturing but Gladwell uses lots of examples of physical products in his TED talk to make his point about the importance of customer variety (cola, pickle, spaghetti sauce, coffee,)…“make your mind up Steve!”

Well, this is a nice segue to explain about two types of variation, and how incredibly important this understanding should be to a service organisation (or the service part of any value stream).

These two types of variety are:

  • Customer-introduced (i.e. within their demand); and
  • Internally created within the process (regarding flow)

To go back to Gladwell’s spaghetti sauce: Different consumers like different sauces (this is variety in demand) but, once they have determined which variety of sauce they like, they then expect each jar they buy to be the same week in, week out (i.e. minimal variation in the process that creates that sauce).

So, whilst we definitely want to reduce and remove variation in the quality of the process, we should not remove the ability of the process to provide a suitably varied experience and outcome. Rather, it is the opposite – we should be trying to cater for this variety.

In fact, variety in service is MUCH bigger than Gladwell’s product examples:

One of my earlier posts set out five categories of variety in customer demand, as identified by Professor Frances Frei (see The Spice of Life).

Now, whilst it might be useful to categorise service variation (purely to help you ‘see’), the bigger point is that the customer sets the nominal value – the specific value of a service to them.

“The customer comes in customer shaped“

…there is virtually infinite variety in people….and that variety can change for a given person depending on, say, time of day/ external influences/ mood….

Standardisation is NOT the answer…in fact, it is often the problem:

There are legions of service organisations that have hired manufacturing improvement experts (or people who have read books about them) to ‘standardise, specialise, centralise and automate’ because they say “this is the solution”.

Examples at attempts to standardise the customer include:

  • using IVRs to standardise customers into categories (“press 1, then press 3…”);
  • using call scripts to standardise the content of customer conversations;
  • using average handling times to standardise the length of a conversation;
  • using ‘box ticking’ forms to standardise customer information collection;
  • using ‘black and white’ rules above common sense, when dealing with a customer’s needs;
  • forcing customers down one path (e.g. you can only pay by direct debit, you can only interact online, you can only use these suppliers, …….and on and on).
  • …..

Interestingly, if you read the list above with your ‘I am a customer’ hat on, you will likely recall many instances where you have tried interacting with a service organisation and one or many of the above attempts at standardising you and your demand has seriously frustrated you!

This leads to much failure demand, waste (and cost) but with little value delivered (as written about in an earlier post).

Clarification: this isn’t to say that technology cannot assist or that there is no place for any standards. It’s making the point that the starting point should be that:

“….in service organisations, the problem is how to design the system to absorb variety” [and not frustrate it]. (Seddon)

Our starting point always seems to be ‘efficiency’ and a focus on activity cost. Perverse as it may seem, a focus on activity cost often has the unintended consequence of increasing total cost (though this is not visible to a silo’d organisation and is nigh on impossible for them to measure).

If we standardise, say, a site visit (the activity) such that it can’t absorb the variety in the customer’s demand…then don’t be surprised that:

  • there is failure demand from the customer when they complain and/or disagree with the outcome of the visit;
  • there is much ‘expert’ time spent reviewing this complaint;
  • there are yet more site visits required to resolve the problems;
  • there is lots more paperwork/ computer inputting/ workflow management required;
  • there is much confusion created by all this extra work (who did what when, who authorised what change from the standard, who is explaining all this jumble to the customer?); and
  • trust has been lost with the customer who now questions everything we do

The most important point to note is that “cost is in flow, not in activity”

So why the title of this post?

Well, the above is quite different thinking to where ‘command and control’ service organisations have been going. A revolution if you will.

Put simply, if we understand the variety in our customer demand and try to design our system to absorb (rather than frustrate) it we will go a long way towards our customer purpose…with the likely side effect of doing so for less cost.

“Managing value [for the customer] drives out cost….Focussing on cost paradoxically adds cost and harms value.” (Seddon)

Have I got a deal for you!

giantknave Brain Farts , , , , , , ,

usedcarsalesmanWhich industry are we really suspicious about, and is the butt of jokes around the world? How about the car salesman?

So why do you think we are so suspicious?

Here’s what we might experience:

  • A rather smooth operator who appears to ask you about what you want but, surprise surprise, “has exactly what you are after”…which, funnily enough, happens to be what he’s got in stock!
  • A personal business card handed over, encouraging you to give him a call whenever you want…but use his direct number: “remember me, my name’s Jim”;
  • Some desperate moves from Jim as you attempt to leave his car yard, saying things like “I can only offer you this fabulous deal today”;
  • …but when you have left the yard, multiple calls from Jim asking how you are getting on and saying that things have changed for the better…so come on by so that we can discuss “…and remember to ask for Jim”;
  • …and if you ring back for Jim but he isn’t available, his ‘colleague’ Bob gladly (yet slyly) takes over the deal, perhaps saying “nah, no need to tell Jim, I can handle it from here!”;
  • Strong attempts to ‘sell you some extras’ like finance, warranty, a tow bar and so on…even when you’ve made clear that you really don’t want them;
  • Assurances that “yes, don’t worry about it – everything works…and if, in the unlikely event you have a problem, just bring it back in and we’ll sort it”;
  • …and if you end up making a purchase, some strange ‘paperwork’ going on to make the deal look a certain way:
    • perhaps trying to bring it forward or put it back (end of the week/ month/ year);
    • perhaps trying to play around with how the figures look

….you might be able to add a whole heap more experiences to the above!

Actually, car salesmen are nothing compared to big financial services business. Let’s move across to the UK Financial sector and have a look at the carnage of the last few decades:

  • the 1988 – 1994 Personal Pension miss-selling scandal in which salespeople on commission persuaded vast numbers of people to trade in generous and safe(r) company pensions for riskier and costlier alternatives. The resultant compensation scheme forced on the industry involved the review of 1.7 million consumers, over 1 million compensation payouts and a total cost to the financial companies involved of £12 billion; (Source of figures here)
  • the 1990s and 2000’s Payment Protection Insurance (PPI) miss-selling scandal in which banks and other financial institutions offered sales incentives to increase the take up of payment protection insurance…which led to a range of miss-selling practises including: putting pressure on customers to buy it in order to secure a loan; failing to make it clear that it was optional; selling to people who were actually ineligible; and even adding it to a loan without the customers consent or knowledge. The resultant compensation scheme forced on the industry (spot the pattern?!) saw the ombudsman receiving “5,000 complaints a week” and payouts being made of more than £15 billion. (Source of figures here)
  • …and on and on (the Endowment Mortgage miss-selling scandal, the Credit Card Protection insurance miss-selling scandal….)

They all shared the same ‘miss-selling’ credentials

  • aggressive, ignorant or incompetent sales tactics,
  • a failure to appropriately advise customers, and
  • deliberate strategies to sell financial services that customers do not need;

So, what’s the common ingredient?

Well, that would be the offering of sales incentives (contingent rewards).

The point is that, if you offer sales incentives, you can virtually guarantee that you will cause dysfunctional behaviour that goes against your (stated) ‘customer’ purpose.

Remember that a valid purpose statement should say something about “helping people…” It does not say “sell what you can to them”. We need to remind ourselves about a system and that ‘sales’ is but one component of it.

If you offer sales incentives, you can expect the system to ‘bite back’ in the form of undesirable discounts and terms given, failure demands from customers contacting you again, cancellations, complaints, debt collection costs, returns and after service costs… all of which will be un-measurable back to your brilliant sales incentive scheme.

You can of course try to put in place ‘compliance’ controls to monitor all these ‘side effects’ but a) you won’t catch the majority of them and b) this is just an additional (and expensive) layer of costs, and waste.

The sobering thing about the UK financial service miss-selling scandals is that the eventual costs dwarfed the original supposed sales benefits! What a huge waste.

If you offer sales incentives, you can expect:

  • people to try to sell what they have in front of them, rather than what the customer wants, or actually needs;
  • a strong desire to ‘get the sale’ and ‘move on’ to the next ‘lead’ meaning that less care is taken explaining the product and what it is and isn’t;
  • ‘dodgy sales’ made, which should never have occurred (i.e. were inappropriate and/or were not desired)

If these incentives are to individuals, you can expect reduced co-operation between ‘colleagues’, who are now in competition for those elusive sales…even leading to sabotage.

Such competition will actually harm, and prevent those many sales that would have occurred because of co-operation between colleagues.

If these incentives are for particular products, you can expect other products to be ignored, and even denigrated in favour of chasing the reward…even if the non-incentivised product was what the customer actually needed.

If you add targets to achieve these incentives, you can expect games to be played:

  • if I am near my target in a given period, I’ll do some creative things to creep over the threshold (perhaps offering discounts and giving things away for free that I shouldn’t be);
  • if I have achieved this period’s target, I might try to defer a sale to my next period, which, again, may not be what the customer wants and clearly distorts information about demand.

And, given that the customer isn’t daft, they ‘feel’ the sales process as opposed to experiencing someone that actually cares about them…providing an awful experience and a massive (yet missed) hit in reputation.

There’s nothing ‘rocket science’ about the above. We all know and recognise it (it happens to us as customers and we hate it!)…yet many of us still work in management systems that think that sales incentives are a good idea.

An important clarification:

If you think that the bad practices described above are only carried out by a handful of ‘bad people’ then you don’t understand human psychology. In fact, the majority of people are having to play a ‘game of survival’ within their incentivised ‘meet target’ management regime and feeling pretty bad about it too…it certainly doesn’t meet their much talked about personal purposes. You’d have to be a pretty strong person to go against the system…and you might not last long in such an organisation if you do!

It’s not a case of ‘bad people’…it’s a case of ‘good people’ having to work in a ‘bad system’….which brings to mind Deming’s quote:

“A bad system will beat a good person every time.”

To close: Going back to our car salesmen opening, most dealers assume that they won’t shift cars without sales incentives. John Seddon, in his latest book ‘The Whitehall Effect’, refers to a Canadian auto dealership client that:

  • studied their system;
  • revealed the tricks used by the salespeople to make sales and gain the incentives; and then
  • understood the resultant negative impacts on the customer.

They removed sales incentives, set out a customer brochure describing all the industry sales tricks and promised that none applied here. Salespeople now co-operate with each other, customer trust improved, sales went up and long term customer relationships were forged.

The answer always seems to be…

giantknave Brain Farts , , ,

images…empowerment! But what does that even mean?

As usual, I thought I’d better get myself on firm ground by looking the word up in the dictionary. Here’s what I get:

“Empower: Give (someone) the authority or power to do something.” (Oxford Dictionary)

And why aren’t ‘they’ (or, depending on your viewpoint, ‘we’) empowered in the first place? Here’s an eye-opening quote from John Seddon:

“Empowerment is a pre-occupation of command-and-control managers, who:

  • design systems that dis-empower people…;
  • …notice the problem and send people on ’empowerment’ programmes;
  • …and then put them back in a system that…”

i.e. it is a merry-go-round in which people’s hopes are raised (often offsite by a cool and groovy external training company) about the wonders of empowerment…and then they get plugged back into their old reality!

The instruments of a ‘command and control’ system dis-empower people. Leaders can ‘happy talk’* about empowerment and even provide training, tools and (worse) incentives to encourage empowerment….but, if the underlying management system remains the same, they are mostly wasting their time. (* if you’ve not heard this ‘happy talk’ phrase before I provide an explanation at the bottom of this post).

Saying ‘you are empowered’ and meaning it are two very different things:

Here’s a lovely quote I came across recently on a Lean Thinking blog that I follow:

Leader:     “I want my employees to feel empowered.”

Counsel:     “You realise empowerment means your employees start making decisions, right?”

Leader:     “Oh… I want them to feel empowered. I didn’t say I wanted them to be empowered.”

(Mardig Sheridan)

The main reason why people aren’t empowered is because of the environment they work within, not because they don’t want to be!

You can’t simply move to an empowered culture:

It’s easy (and usual) to want the result…but simply wanting it (as in ‘Stating the obvious’) doesn’t magically deliver it.

There are two risks for ‘leaders’ who have always told ‘their’ people what to do (via the likes of transformation programmes, change projects and cascaded personal objectives) when they tell everyone that they should feel empowered:

  • The leader stands back completely: this will create a void in which people won’t know what to do…which will end up with those same ‘leaders’ saying “well that didn’t work, I’d better take control again.”

OR

  • The leader continues to tell them what to do: creating a battle between leader and worker and much resentment and disbelief. And just to spell it out, you are telling them what to do by default if you simply say ‘no’ to everything they suggest or request permission to experiment with.

You can’t just say ‘you are empowered’ – you have to create the environment to make it happen! So how do we go about truly creating an environment in which people are genuinely empowered?

There’s a great book by David Marquet on this called ‘Turn your ship around’. It relates to his time as Captain of a US Navy Nuclear submarine. There’s also a really nice 10 min. animated version enabling you to quickly watch and get the gist. I recommend you watch it right now.

…so, what is needed is:

  • clarity of purpose (of the system in which the people operate), which
    • must be from the customers point of view; and
    • is NOT anything like ‘to implement xyz’ – that’s a dictated solution;
  • the building of your people’s competence;
    • which means far more than just knowing their basic job…it includes them understanding the system in which they operate and the likely effects of their decisions towards it purpose
  • the definition of capability measures (against purpose), and the ongoing transparency of this critical information to those operating the system; and
  • the removal of the barriers that define ‘the old way’ (most of my other posts explain what these are so I won’t repeat myself)

Leadership and empowerment

A reminder of three types of leaders:

“There are three kinds of leaders. Those that tell you what to do. Those that allow you to do what you want. And ‘Lean’ [Systems Thinking] leaders that come down to the work and help you figure it out.” (John Shook)

I hope you can see the cause and effect relationship between leadership and empowerment…it is only the 3rd style of leadership that is meaningful. This is true coaching through an ongoing back-and-forth dialogue between mentor and mentee.

It is only through true leadership (which includes trust, support and humility) that an organisation’s people can become empowered.

But isn’t it simply about hiring the right people?

A quote to finish on:

“Don’t bother trying to hire positive people only to give them crappy jobs and a line of bullshit about empowerment. If you are serious about reaping the benefits of an empowered workforce, make sure you are committed to providing good jobs, fair policies, and remarkable leadership, then go hire good folks and invite them to partner with you to continuously improve your workplace. (Bret L Simmons)

___________________________________________________________________________________________

‘Happy Talk’ (Pascal Dennis):

“I remember the first time I attended a leadership conference at [my organisation] about three years ago. I walked away from the event really frustrated with leadership because the messages they shared seemed so disconnected from the reality of the work I was doing each day.

You know the type of event: leaders standing up confidently in front of their peers throwing around buzz words and all the ‘right answers’. What Pascal Dennis refers to as ‘the happy talk’.

Basically we got told what we wanted to hear as opposed to what we really needed to hear. It’s a lot harder to talk about problems and deliver disturbing news than to talk about everything that is going great.” (DailyKaizen.org)

Demand, demand everywhere…but not a drop of value to drink!

giantknave Brain Farts , , ,

PhoneScream…so I contact a (world renowned) bank about opening an account, but it’s not a basic request:

The comedy begins:

  • I look up the bank’s internet site to find a number to ring for my specific need. I can’t find anything that fits. The best I find is a ‘contact us’ email form, so I fill it in, explaining my need and asking for the right contact number.
  • I get an email back providing me with a contact number and instructions as to which IVR selections to make when I ring it (‘press 2 for blah, then 1 for blah, then 3 for blah’).
  • I ring the number. The IVR is nothing like the instructions. I listen to the (long list of) options. None fit my need so I wait for someone to pick up.
  • I explain my need to the agent that picks up and am told that “oh no, we don’t deal with that. You need to speak with ‘abc’ department. Would you like me to pass you through to them?” I say that, yes, I surely would.
  • I am ‘cold passed’ to this 2nd queue and therefore have to wait in line and then re-explain my need to the agent. They say “No, they shouldn’t have passed you through to us. You need ‘xyz’ department. I’ll put you through.”
  • Once again, I am ‘cold passed’ through to a 3rd queue, wait in line and re-explain. They say “We don’t deal with that. You need to speak with ‘blah’ department”
  • I listen to the original bloody IVR again! I’m really annoyed now. I think about hanging up, but I really want to talk to someone about my need. I decide to wait.
  • I get another agent and explain about what has just happened to me…this took time and I was clearly exhibiting signs of annoyance (funny that!). I asked them to PLEASE listen to my actual need and spend time with me to figure out if they can assist and then who can. They say that they need to transfer me to someone who can help. I pleadingly ask them to ‘warm transfer’ me over to that person so that I don’t start the merry-go-round again!
  • I was cold transferred to another number!!! After waiting for an agent, guess what, they couldn’t help and would need to transfer me to…..I hung up.
  • I went back on to the website, found the ‘contact us’ email address and wrote what I shall describe as a ‘strong email’….I am yet to receive a response.

Now, whilst the above is (verging on) humorous for those not involved, sadly I bet most of you reading it have examples of similar ‘service’ experiences to have happened to you.

To summarise the above:

  • there was 1 ‘white marble’ of value demand, the actual need for which the bank is there for;
  • there were 6 ‘blue marbles’ of failure demand (so far!), each of which the bank had to handle*, as if it were a valid unit of production;
    • * for each unit of demand they had to: plan and roster staff; handle the queue; handle the call (welcome, understand need, action, closure); record in their systems; performance review the agent as to how the call was ‘handled’….etc
  • each silo within the bank experienced their vertical unit of activity and probably met each target they set themselves: call answering time, average handling time, call resolution rate….and probably celebrated their success, perhaps with some awards, even some contingent rewards! ;
  • the bank is oblivious to the horizontal flow that I experienced;
  • and, worst of all, my need remained unresolved!
    • simply and clearly explaining to me that they can’t do what I was asking (if this were the case) would have resolved my value demand.

To use a current buzz phrase, there is nothing ‘customer-centric’ about this experience.

Why does the bank have this problem?

Because it bought into the economies of scale mantra of ‘standardise, specialise, centralise.’

Because it believed that what has been seen/ heard about in manufacturing can simply be applied to service.

Because it bought into technology as an automator of service provision.

What does this cause?

Silo’d thinking, in which effort is put into the efficiency of each vertical activity…at the expense of the effectiveness of the horizontal flow of value, from customer demand through to its satisfaction.

Massive waste that is unseen (though paid for) by the business yet is acutely felt by the customer.

“Cost is in flow, not activity….economies come from flow, not scale.” (John Seddon)

“There is nothing so useless as doing efficiently that which should not be done at all.” (Peter Drucker)

Now you might laugh at this, and think “wow, daft bank!” but, before we dismiss this as not something that could happen to us, I could equally have written about a similar experience I had from ringing an internal helpline at the company I work for. I didn’t (and won’t) write about this internal example because the point is to think about the problem and its causes, not to get caught by the error of blame.

The reason for the madness is the system (and management’s beliefs and behaviours), not the people within it.

None of the ‘customer service agents’ will have enjoyed handling my units of demand – there was no satisfaction to be had in helping me with my need. Each will have been left hollow by their inability to assist…and then they will have moved on to their next call….safe in the knowledge that they cannot change their reality whilst they work within their ‘command and control’ paradigm.

An Exercise in Futility

giantknave Brain Farts , , , , ,

Dalmatian-chasing-tail-006Now this post is a bit longer than normal, but I hope that the 1st quote grabs you and sucks you in…I reckon that once you start you won’t stop 

“Performance evaluation is an exercise in futility” (Scholtes)

Every organisation operating a ‘command and control’ management system uses the performance appraisal as a key tool in its arsenal.

The contention in this post is that one of the key steps in providing an environment that fosters a highly motivated and capable workforce is to scrap the performance appraisal system and replace it with something far better.

Problems with performance appraisals

Let’s first consider just some of the problems with actually carrying out what might be considered a valid performance appraisal of an individual – that’s you and me:

  • Appraiser Bias: Performance assessments tell us as much about the appraiser as the appraisee. It tells us how harsh a critic the manager is, how good a job he/she expects the employee to do, how well the two of them get along, what basic values they share and even whether their backgrounds are similar; 
  • Management performance: The quality of management has a huge influence. “any individual’s performance is, to a considerable extent, a function of how they are managed…so the manager is in part evaluating him/herself without appearing to do so.” (McGregor) 
  • Interdependence: None of us act alone. “Almost nothing is accomplished by an individual operating alone. Most work is obviously a collective effort. Yet even workers who seem quite independent depend on others for ideas, stimulation, feedback, moral support and administrative services.

When an individual makes some heroic effort and accomplishes an extraordinary task, often he or she can take the time to do that work only because others have filled in on the less heroic parts of the job. When someone is credited with a success, he or she is individually honoured [e.g. by money, award, public acclaim] for what was most likely the work of many.” (Scholtes)

  • The effects of the system: Deming used his famous red bead experiment to illustrate this point simply yet brilliantly. He explains that the performance of the employee is 95% governed by the system that they work within. The ranking of people is actually merely ranking the effect of the system on the people. 

“It is simply unfair to the extent that employees are held responsible for what are, in reality, systemic factors that are beyond their control.” (Kohn)  

  • A straight jacket: Appraisals ‘compare’ everyone against a uniform expectation (albeit per manager – see 1. above) rather than understand and embrace the reality that everyone is unique, with very different (often subtle) contributions to make.

Deming wrote the wonderful words that “a [true] manager of people understands that people are different from each other. He [or she] tries to create for everybody interest and challenge and joy in work. He tries to optimise the family background, education, skills, hopes and abilities of everyone. This is not ranking of people. It is, instead, recognition of differences between people, and an attempt to put everybody in position for development.”  

  • Ignoring variation: The work of each individual is characterised by variability…it will naturally fluctuate! You cannot be the same every minute of every day….if you were, you would be a machine! Further, the major causes of such variation are beyond the attributes of the individual. So should you be criticised or praised because of ups and downs in your supposed ‘performance’ outside of your control?

I could go on…but I fear that I would write a book!

The performance appraisal creates the illusion that management have indeed isolated and determined the performance of an individual. Worse still, it allows management to abdicate their responsibilities – they will simply meet the person each period, get the person to justify themselves (with evidence!) and then judge them….no need to actually get to understand who they are, what their dreams and aspirations are, and therefore discuss how they can help them become reality.

The effects of performance appraisals

Most organisations running performance appraisal systems will answer back in denial: “yes, we know all about the above and we have ‘continuously improved’ our process through much iteration so there’s no such problems here!”

I would contend that they may have succeeded in creating a (laborious, bureaucratic and wasteful) process that masks (i.e. disregards) the above, but they cannot remove them.

But, for the sake of argument, let’s just suppose they have….what about the effects of the performance appraisal:

[the system by which merit is appraised and rewarded is] “the most powerful inhibitor to quality and productivity in the Western world….it nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry…and leaves people bitter.” (Deming)

“Even if performance appraisals were adequate to gauge how well people were doing their effects are usually so destructive that they shouldn’t be used anyway. Not only is the fact of interdependence in the workplace ignored, but people are discouraged from cooperating in the future.” (Kohn)

“Appraisals leave people bitter, bruised, despondent, dejected, feeling inferior, some severely depressed.” (Seddon)

What do people running performance appraisals say they are for?

Rather than simply looking for a new technique to continue with the old flawed logic, let’s consider why people are being evaluated.

Kohn notes four ‘defences’ as being used by those that contend performance appraisals are required. They say they are needed to:

  1. Determine how much each employee should be paid and/or who should receive various awards and incentives;
  2. Make employees perform better for fear of receiving a negative evaluation or in the hope of getting a positive one;
  3. Sort employees on the basis of how good a job they are doing so we know who to promote; and
  4. Provide feedback, discuss problems, and identify needs in order to help each employee do a better job.

Taking each of these in turn, and using some of my previous posts so that you and I can finish this post today!!…

Regarding 1: Please read the following posts already on the blog that debunk the use of contingent rewards: The Chasm and Money as pay

Regarding 2: Please read Oh no, not that old theory and Making a wrong thing righter that explain why ‘carrot and stick’ approaches to motivation are counter-productive.

Regarding 3: Please read Anointing heroes. Further, there is a whole post to be written on promotion (I’ll add it to my list!). It’s not a good reason to carry out performance appraisals.

Defences 1 – 3 are about doing things to people…which leaves 4 as the only one which could be about working with people….mmm, if we got rid of 1 -3 then this is sounding promising! Read on.

So what should we replace performance appraisals with?

Kohn suggests that, if the over-riding purpose is to foster improvement (for the individual, and for the organisation) then the following principles take shape:

  • A two-way conversation:
    • An opportunity to trade ideas and ask questions;
    • NOT a series of judgements about one person pronounced by another;
  • A continuous process, rather than a time bound event (e.g. annual, quarterly);
  • It never involves any sort of relative ranking or competition (no scoring!);
  • It is utterly divorced from decisions about compensation
    • “Providing feedback that employees can use to do a better job ought never to be confused or combined with controlling them by offering (or withholding) rewards.” (Kohn)
    • It is “foolish to have a manager serving in the self-conflicting role as a counsellor (helping someone improve performance) when, at the same time, he or she is presiding as judge over the same employee’s salary” (Meyer)

Essentially, Kohn is arguing for good old fashioned regular and meaningful conversations between employee and manager within an environment of openness and mutual trust. I’ll have some of that!

Scholtes takes this further: Performance appraisals focus on the wrong target! The true opportunities for improvement are in an organisation’s systems and processes, rather than individuals or groups. Instead of focusing on individuals, managers should be working with individuals to focus on the problems with the system.

It’s worth noting that an organisation taking the above seriously won’t be able to move to this highly desirable state overnight: Once the scoring, ranking, rating and rewarding has been stripped out, it will take a bit of time for managers to establish the trust of their employees.

On the plus side, the vast majority of managers will relish the removal of the hugely wasteful processes and painful conversations of the old way…and will really enjoy spending the newly created time actually helping their team.

What about the advice from all those expensive consultants?

You will find queues of expensive consultants who will tell you otherwise.

Scholtes notes that most ‘research’ on performance appraisals consists of opinion polls asking “which kind of performance appraisal do you prefer?” They are usually:

  • conducted by consulting companies selling their ‘Human Capital’ services;
  • filled out by HR managers who, as a group, are predisposed in favour of performance appraisal…no disrespect meant but it is, after all, a major part of their (current) job; and then
  • sent back out to the same group of HR managers in glossy consultancy report format along with a nicely worded proposal as to how the consultancy can help implement what they now claim to be ‘best practise’ and move them up some supposed ‘maturity curve’!

Scholtes notes “when biased people ask the opinions of biased people, the results cannot be described as research.” This quote is so relevant to many a ‘big consultancy’ report purporting to be ‘research’.

…and finally: what do the Japanese do?

A really nice story from John Seddon:

“I was asked to write an article exposing the problems with performance appraisals for a Sunday newspaper. I submitted my 1st draft.

  • The editor suggested I should provide balance by talking about what to do instead.
  • My response was that you don’t need to find an alternative to doing a bad thing – you should just stop doing it!
  • The editor said ‘ring your friends in Japan and find out what they do’.
  • …so I did.
  • I asked ‘what do you do about performance appraisal?’
  • The reply was ‘what is that?’
  • …I explained.
  • Japanese people tend to be too polite to laugh.”

The chasm

giantknave Brain Farts , , , ,

dollar-trap…between what science knows & what business does!

In my 3 day ‘Lean/Systems Thinking’ course, I ‘mess with the heads’ of the participants about incentives and motivation. I use material from a fabulous book called ‘Punished by Rewards’ written by Alfie Kohn (1993/1999).

Now, a number of course attendees comment back to me that “isn’t what you are saying the same as that Dan Pink guy?” * and, yes, basically it is. Pink is what I might call the modern day Kohn, the ‘in vogue’ management guru on this stuff…not that Alfie has gone anywhere!

[* Dan Pink wrote a 2009 book on the same subject area as Alfie Kohn’s earlier book. Pink’s book is called ‘Drive: the surprising truth about what motivates us’. I’ve noticed a Dan Pink RSAnimate informally making its way round]

This post is about a Dan Pink TED talk passed to me by a participant on one of my courses (thanks for sharing), in which Pink eloquently and passionately puts across his points. It is 18 mins. long and well worth watching.

The key message in the TED talk is that:

There’s a mismatch between what science knows and what business does.

‘Carrot and stick’ (as in contingent rewards) is an ideology, not a proven method to get the desired results. In fact, worse than being ineffective, it can do much harm.

Now, once you’ve watched the TED talk, you will know what the key message is about and that Dan Pink puts forward some scientific research as evidence. You might think “yeah, anyone can put forward an experiment or two, but I bet there are other experiments that ‘prove’ the opposite!”

To answer this: If you read Kohn’s book (which is a detailed and brilliantly written review of the body of research around incentives) you will find that:

  • experiments have been done on this stuff since the 1950’s, each and every decade, right up to today;
  • the results of these experiments have been replicated again and again and again; and
  • there isn’t any credible scientific evidence that contradicts the findings.

So what about service organisations?

Cast your mind back to the candle problem that Pink refers to, and whether the tacks are provided inside or outside of the box.

In service, the necessary actions are rarely a simple and obvious ‘cookie cutter’ response. Rather, the tacks might be scattered under the table, the box still a flat pack and the candle missing a wick!

Every customer service person should be thinking about the unique customer they are dealing with, their unique reality and then providing excellent service that satisfies (and hopefully exceeds) their specific needs.

You might come back at me and say “but if we standardise everything then our people don’t need to think. They just need to ‘turn the handle’ and THEN incentives work…don’t they?”

Two comments on this:

  • do you think the customer wants to be standardised?
  • do you think our people simply want to ‘turn a handle’?

I think not!

Be careful of gimmicky management fads:

Pink talks about a number of innovative techniques to get people thinking autonomously. He refers to Atlasian’s FEDEX day, Google’s 20% time and ROWE. Each makes some sense.

However, if a company simply picks up one of these ideas and ‘implements it’ BUT doesn’t change the underlying thinking, it won’t work.

It’s not about the gimmick (and you don’t need to copy theirs), it’s about the underlying thinking!

Kohn sets out a 3-step approach:

  1. abolish extrinsic motivators (incentives, competitive awards….);

(“pay people well and fairly…then put [incentives] out of their minds.”)

  1. then re-evaluate ‘evaluations’: move from formal time-batched judgement events to continual 2-way conversations divorced from the issue of compensation;
  2. then create the conditions for authentic motivation:
    • Collaboration: across the horizontal value stream
    • Work content: make it interesting
    • Choice: allow people to experiment and learn

And a reminder of that great John Seddon quote:

“with every pair of hands you get a free brain – but whether the brain is engaged depends on the design of the work.”