ObsessionThere’s a word that seems to be overly used within many organisations, almost an obsession.

That word is ‘Culture‘. Indeed, they seem to have a culture of ‘being obsessed by the word culture’.

We hear the following phrases (or variants of):

  • We are measuring our culture
  • We need to change our culture
  • We have a culture committee
  • We are performing a culture-changing programme of work

So, here’s the thing – an organisation’s culture is a result, an outcome, just like its financial situation. As I wrote in one of my first posts, we shouldn’t be attempting to ‘manage by results’ (as in “let’s change our culture”), we need to manage the causes of the results…and the results will then look after themselves.

The culture of an organisation is the sum of the way people behave. The main cause of the culture is the management system in place. That management system reflects the beliefs and behaviours of the leaders of the organisation.

A reminder of a hugely important quote from John Seddon:

“People’s behaviour is a product of their system. It is only by changing [the system] that we can expect a change in behaviour.”

i.e. we can do all sorts to ‘require’ people to change how they behave (in an attempt to change the culture), but if we continue to apply the command and control management instruments ‘on’ them, such as:

  • management by hierarchical opinion rather than facts at the Gemba;
  • cascaded personal objectives;
  • setting of arbitrary numeric targets;
  • dictating methodologies and tools to use;
  • contingent rewards; and
  • the rating and ranking of people

…then we can’t expect much to really change.

No end of people ‘attitude’ targets, incentives, evidence gathering and rewards will change the system. Instead, we can expect such a system to derive distorted ‘attitude’ metrics – “I will likely tell you what you want to hear if it benefits me to do so.”

Interestingly, whenever I’ve worked in an organisation with a really good environment, the ‘culture’ (outcome) word was seldom mentioned – it didn’t need to be.

So, whilst we’re considering the ‘Culture’ word, what about the ‘Transformation’ word?

Here’s a definition to ponder:

Transformation: In an organisational context, a process of profound and radical change that orients an organisation in a new direction and takes it to an entirely different level of effectiveness….transformation implies a basic change of character and little or no resemblance with the past configuration or structure.”

Many organisation’s use the word ‘transformation’ a lot, and perform major organisational change a lot…but unless that change has succeeded in delivering an entirely different level of effectiveness, then they’ve only really been ‘rearranging the deck chairs’.

Conversely, if an organisation changes its management system (which would be truly transformational!) then culture change is free.

If an organisation truly operates a ‘systems thinking’ management system then it should result in a powerful culture capable of continuously improving, through the people who work there…with no need for endless attempts at ‘transformation’.

‘Management by results’…how does that work?!

cause_effect__1_1_5312The CEO of the company I work for recently shared a tweet with us summing up an insight she gained at a recent engagement she attended, which read as follows:

“Nick Farr-Jones dinner guest at conference key message focus on process not the scoreboard and you will get result.”

I like this tweet – the words, whilst short, are incredibly important for anyone wanting to make improvements. I thought it useful to dig into this a bit.

Dr W. Edwards Deming was very clear on this point! He set out the practise of ‘Management by results’ (e.g. focusing on a scoreboard of outcomes) as one of the diseases of a ‘modern organisation’ and, instead, proposed that we should spend our time and focus on understanding and improving the processes that produce the results i.e. the results are the outcome of something, and you can look at the outcome till you are blue in the face…but this won’t make it change!

“The outcome of management by results is more trouble, not less….Certainly we need good results, but management by results is not the way to get good results….It is important to work on the causes of the results – i.e. on the system. Costs are not causes: costs come from causes.” (Deming, The New Economics)

Professor John Seddon (think ‘Deming on steroids’ for Service organisations 🙂 ) takes this message on further. He notes that the measures used in most organisations are ‘lagging’ or ‘rear-view’ measures – they tell you what you did.

Seddon has a very clear view on measurement but at this time I want to simply put forward his thinking regarding the difference between operational and financial measures. He says that we should use:

  • Operational measures (such as demand for a service, and a processes capability to deliver against its purpose) to manage; and
  • Financial measures (revenues, costs) to keep the score.

We know that one affects the other but we can never know exactly how and it is waste to divert time and effort to try to do so.

Bringing this back to Nick Farr-Jones and Rugby: A rugby coach uses process measures to manage (e.g. passes complete, line-outs won, tackles made…) and the result quite literally as the score!

So Nick Farr-Jones, Deming and Seddon quite clearly agree with each other. If you work on the capability of a system/ value stream/ process to deliver against its purpose (as from the customer’s point of view) then the results will come.

Finally, you may be thinking ‘ah yes, this is where the balanced scorecard comes in’…there’s a post in there! Watch this space.