“What I think is…”

InformedI’d suggest that every day in our working (and home) lives we are asked for our opinion on something. In fact, such a situation probably occurs dozens of times every single day.

Let’s drill down into a single instance and consider the basic pattern of dialogue: we listen to someone state, and maybe explain, their thinking with regards to what they deem to be a problematic situation (explained below)  and then we start an immediate response with words like “I think that…”.  Worse, we may state our ‘thinking’ (perspective) as fact and we may mistake our feelings as rational logic.

I have a constant battle with myself to avoid, pull back from, or recognise my fall into this vast pit.

A sideways look at ‘everyday life’:

Peter Checkland, in his ‘Soft Systems Methodology’ (SSM), came up with a rather nice device that assists – the idea of ‘problematic situations’.

“As a member of the human tribe we experience everyday life as being quite exceptionally complex. We feel ourselves to be carried along in an onrushing turbulent stream, a flux of happenings, ideas, emotions, actions, all mediated through the slippery agency of language, all continually changing.

Our response to our immersion in this stream is not simply to experience it. Beyond that, we have an innate desire to try to see it, if we can, as meaningful. We attribute meaning to it – the ability to do this being one of the characteristics which marks us out as human.

Part of this meaning attribution is to see chunks of the ongoing flux as ‘situations’. Nothing is intrinsically ‘a situation’; it is our perceptions which create them as such, and in doing that we know that they are not static; their boundaries and their contents will change over time.

Some of the situations we perceive, because they affect us in some way, cause us to feel a need to tackle them, to do something about them, to improve them.” Thus we perceive such situations as ‘problematic’ i.e. something to intervene in.

This neatly dovetails with my last post in respect of Ackoff and messes vs. abstract problems. Just as Ackoff didn’t like the simplistic word ‘problem’, neither does Checkland. …and for the same reason: ‘problem’ implies ‘solution’ but, as he puts it, “real life is more complex than that!”

Back to that opinion we have been asked for

How do we arrive at our thinking? Do we have enough knowledge to justify a response?

Here’s another useful passage from Checkland:

“In human conversation, each of the persons involved influences others and is also influenced by them. Out of this two-way process comes what the participants are creating as their notion of changing ‘reality’. These acts of creating reality are never complete, and so have to be examined as only a part of a never-ending process.”

i.e. Any response we provide isn’t, and cannot be, ‘concrete’*. We have, and will always have, much to learn. Of course, it’s absolutely the case that our mindset (and where it sits on the ‘fixed – growth’ spectrum) will determine in which direction(s) and how far our thinking will travel during, and following human interactions.

(*yet, in many situations, we are easily satisfied with superficial response(s) and make key decisions based upon them)

I’d like to propose a few ‘alterations’ to our language to more accurately express the reality whenever we offer our opinion. How about we start our replies with:

“what I currently think is…”; or even better

 “what’s just popped into my head as a response is…”

Because, let’s be honest – we weren’t thinking about it 5 minutes before we were asked and we have press-ganged our brain into providing a timely reply. Further, our ‘answer’ isn’t exactly complete. It’s just an initial train of thought based on what we have been exposed to, and heavily weighted by its recency.

Even thinking about adjusting our replies to being less certain is likely to help us contemplate what we actually know to respond.

I could be flippant here and say that, if you ask me what I think, I should reply that I don’t know yet – ask me on my death bed…because that’s when I will have finished* assimilating all the information available to me. (* though likely, I presume, not by my choice)

Rather than taking this unhelpful line of reasoning…let’s look at what lies within:

Knowledge, not opinions

i.e. the idea that I need to take my time, gain (and therefore seek out) experience, understand the facts and expose differing perspectives before I provide a hypothetically useful reply.

So, even better than the “what I currently think is…” response would be to clearly explain the basis, extent (and therefore limitations) of our experiences in respect of the topic in play…so that we and the listener can appreciate why we currently think as we do…and our listener is encouraged to  reflect in the same manner. Gosh, we might end up educating each other!

“Real knowledge is to know the extent of one’s ignorance” (Confucius)

In a work scenario our response should often simply be:

“I don’t have the facts to make a valuable response…but I can do something about that…I’ll get straight to the gemba!”

…and if we do this, we will collect the facts, appreciate the environment in which they arise, and understand other perspectives…leading to meaningful change, towards purpose.

…which is an excellent link to three previous posts:

…and I’ve also set myself up for a follow-up post on the ‘soft systems thinking’ topic of ‘Worldviews’. Here’s a teaser to end with:

“The systems approach begins when first you see the world through the eyes of another. [It] goes on to discover that every world-view is terribly restricted. There are no experts in the systems approach.” (C. West Churchman)

So, you think you’ve got a problem!

Mr MessyI wrote in my bio of Russell Ackoff that he was a favourite giant of mine…but I haven’t covered much of his work in my writings to date. I recently re-read a couple of chapters from his wonderful ‘Ackoff’s Best’ collection of essays on management (and education) and this post is the result.

Ackoff wrote that:

“There are four ways of treating problems: absolution, resolution, solution and dissolution.

1. To absolve a problem is to ignore it and hope it will go away or solve itself; 

…and how much of what occurs around us (in whatever organisation) fits into this category?!


2.  To resolve a problem is to do something that yields an outcome that is good enough, that satisfies. Problem resolvers…try to identify the cause of a problem, remove or suppress it (relying on ‘experience’ and ‘common sense’), and thereby return to a previous state;

 …this fits with a ‘copying’ what you or others have already done, and an ‘implementation’ mentality. Nothing’s really been solved, just hidden or worked around;

…to my mind ’outsourcing’ fits here: i.e. the hope that ‘giving the problem to someone else’ to sort out for you is a good idea. (There’s a post ‘shouting to get out’ here)


3. To solve a problem is to do something that yields the best possible outcome, that optimises. Problem solvers…rely heavily on experimentation and analysis;

 …we may therefore move forward in a continuous and incremental manner

…but, whilst ‘solution’1 is a word that we all seem to be devoted to:

– no problem ever stays ‘solved’ due to the dynamic nature of reality; and

– every solution creates new problems. If you doubt this then reflect on the phrase that ‘Systems bite back’!


4. To dissolve a problem is to eliminate it by redesigning the system that has it [such that the problem no longer exists]. Problem dissolvers try to idealise – to approximate an ideal system – and thereby do better in the future than the best that can be done now.

 …this is to look at the ‘problem’ within its context – the bigger system that it sits within; to go ‘above’ the problem and look to understand how and why it exists in its wider environment;

…and, by redesign, achieve breakthrough improvement (or in Ackoff’s words a “discontinuity”).

Some ‘command and control’ organisational examples

…to ponder in respect of problems and their (re)solutions:

  • Why do we try to continually draft, and redraft cascaded personal objectives in the hope that we can make them SMART and good for the stated purpose of the system?
  • Why do we continue to fiddle with the incentives system so as to ‘motivate’ our people to ‘do what we want’, whilst increasing ‘controls’ to stamp out the resultant undesirable dysfunctional behaviour?
  • Why do we constantly strive to ‘give’ people empowerment (which is an oxymoron) and ‘make them’ engaged with their work, and yet continue to command and control what they do?

why don’t we look at the management system (which reflects management’s beliefs and behaviours) that currently requires cascaded personal objectives, targets, the rating of people and the dangling of contingent rewards…and redesign it …and thereby dissolve these recurring ‘problems’?!

(Clarification: A reorganisation does NOT qualify as redesign!)

So how do we redesign?

You study your system, get knowledge and then, and only then, intervene for the good of your employees and customers….which sustains a long-term result for your investors.

But you don’t simply ‘intervene’: The manner of your intervention is vital to the outcome.

In a recent post, ‘Think Purpose’ brilliantly explained a somewhat profound point – that “change doesn’t happen AFTER finding the solution, it IS the solution.”  His post (along with the simple yet insightful diagrams within) is worth taking the time to read.

Looking at what is written above, I see a strong correlation between dissolving problems and people understanding and improving their system for themselves.

Okay, so we’ve looked at different ways to treat a problem but…

What’s a problem anyway?

Ackoff went on to explain that:

There’s no such thing as ‘a problem’. They don’t exist – they are a concept. A problem is an abstraction, extracted from reality by analysis. It’s isolated from reality.

A problem is to reality what an atom is to a table: You experience tables not atoms – you experience the whole, not the parts that you have reduced it to by conceptual reduction.

What we experience (i.e. reality) are dynamic situations that consist of complex systems of problems, not individual or isolated problems. I call such systems messes.

When a mess, which is a system of problems, is taken apart, it loses its essential properties, and so does each of its parts. The behaviour of a mess depends more on how the treatments of its parts interact than on how they act independently of each other.”

“Erm, right…I think – got any examples to illustrate?”

Okay, I’ll go with two topical examples in the news.

Let’s start with Donald Drumpf3:

  • DrumpfProblem: (supposed hoards of) illegal Mexicans
  • Resolution: Build a wall! Obvious really :).
  • So how will that help? If you want a hugely funny take-down of Donald’s overly simplified problem-resolution thinking, watch John Oliver’s hilarious 18 min. piece about how determined ‘aliens’ will easily get around the wall. The bit where Donald answers his own question by suggesting they might just use a rope to lower themselves down is hilarious.

I could have written all day about other absurdly simplistic Drumpf-isms to everything and anything but, frankly, he’s too easy a target. What comes out of his mouth are supposed ‘resolutions’ to problems without thinking about the mess from which they come….and the many many new problems that they will spawn.

Without wanting to be political, I would note that Bernie Sanders appears to look underneath the problems at the systemic root causes, with a huge desire for redesign.

And so on to ‘BREXIT’:

BrexitOn 23rd June 2016 Britain votes on whether to remain in or leave the EU.

The ‘problem’ that the leaders of the ‘Leave’ campaign appear fixated on is the control of (supposedly unmanageable) immigration…mmm, there’s a similarity with Drumpf here.

Now, I’m not saying that leaving the EU is impossible – of course it’s not…but I believe that the suggested miracle ‘cure’ of leaving the EU is many magnitudes worse than the abstract ‘problem’ of resolving immigration.

An attempt at ‘dissolving’ the problem might look at why they want to leave their homes. Bombs could have something to do with it.

(If you don’t mind the swearing – I warned you – then I love this 3 min. Jonathan Pie ‘BREXIT’ video)

So what about an organisational example to end on?

Resolving the problem of high costs by ‘cost-cutting’ fits here!

We should remember that “Costs aren’t causes. Costs come from causes.” (Deming).

We can’t look at a line item in the management accounts, say it is too high and command that it be cut…and then not expect this to harm the system. The abstract ‘problem’ of a (seemingly) high cost cannot be separated from the system that causes it.

Ackoff’s ‘mess’ thinking now makes so clear the underlying reasons behind Seddon’s message:

“Managing value [i.e. the purpose of the system] drives out cost.

Cost cutting [i.e. an abstract ‘problem’] paradoxically adds costs, and harms value.”

To conclude

Here’s the hugely important point in a final Ackoff quote:

“A partial solution to a whole system of problems is better than whole solutions of each of its parts taken separately.”

  • A partial solution for the whole is good for the system’s purpose, and can be improved yet further as we study and learn more;
  • ‘Whole solutions’ to each part will likely harm, and can ultimately destroy, the system and its purpose.

Or, in American-speak:

  • A small step towards gun control is better than arming everyone4;
  • A small step towards cultural, racial and religious tolerance/integration is better than building a wall and throwing people out of the country.

Neither of these small steps eradicates the mess, but both start to untangle it.

Notes:

  1. Many ‘Lean (Systems) Thinkers’ prefer to use the word ‘countermeasure’ rather than ‘solution’ because they understand the reality of a complex and dynamic system;
  2. If you are new to this blog and don’t appreciate what the word ‘system’ means then please take the time to enlighten yourself  – this is foundational to everything;
  3. If you don’t know why I’m calling Trump ‘Drumpf’…John Oliver provides the answer 🙂
  4. Here’s Donald Drumpf’s simplistic rationale on arming the ‘good guys’ (who ever they may be!): “[the recent massacre in Paris] would have played out differently with the bullets flying in the other direction.”
  5. I’ve always intensely disliked the rather conventional ‘go after the low hanging fruit’ business improvement phrase, which refers to taking a cursory glance at something, coming to some quick judgements and ‘wading in’ with solutions. The phrase “Don’t think about it, just do it” springs to mind! Ackoff’s brilliant systems thinking work firmly puts the ‘low hanging fruit’ mentality in its place (at least for me anyway).

 

‘Beyond Budgeting’: There is a better way!

BudgetSo this post is part 2 of a two-part piece in respect of budgeting.

Part 1 (The Great Budget God in the Sky) introduced the ideas that:

  • creating a detailed budget for the next year and then holding people to it is a very poor way to manage;
  • the budget is part of a wider ‘fixed performance contract’ that understandably causes budget holders and their teams to engage in a set of games that are hugely harmful to the system and its purpose;
  • but there is a better way…which will be discussed in (this) part 2.

If you can’t remember, or haven’t yet read, why part 1 came to these conclusions then please (re)read it…otherwise read on:

So what do you do instead of a budget?

So there’s a short, simple (and insufficient) answer, and then there’s the rest of what needs to be said.

In simple financial process terms, those organisations that no longer use budgets work with rolling forecasts instead. Here are a few explanatory quotes from successful practitioners:

“Rolling forecasts are updated quarterly and look five quarters ahead…and because [they] are separated from any form of performance evaluation and control*, we get far more accurate forecasts than was ever the case with the budgeting system.”

(* a necessary discussion point covered later in this post)

“…this approach has reduced dramatically the amount of time managers now spend in forecasting compared with the previous budgeting process.”

“Forecasts are used in conjunction with actual results to show trends for high level KPIs such as return on capital, profitability, volumes and so forth. These typically show the last eight quarter’s actual results and the next five quarters forecasts.” (i.e. they see, and understand variation rather than making binary comparisons)

“Rolling forecasts…place the CEO in a much stronger position to anticipate financial results.”

Right, so you’ve got the basic idea about rolling forecasts…but I started by stating that this was insufficient:

Necessary…but not sufficient!

Here’s a rather nice animation of a seven-levered lock:

lock mechanism animationI find it mesmerising! And it’s pretty cool seeing how it actually works 🙂

Using the lock as an analogy:

  • The lock is a system. Each of the seven levers (along with the key and accompanying barrel) is a component part;
  • You can uncover the existence of one lever, work out what position it needs to be in, and get this sorted (e.g. moving from budgets to rolling forecasts)…and yet the lock won’t open;
  • Further, the moving of this one lever into the ‘right’ position will very likely upset the positioning of all the other levers;
  • It is only when all of the necessary components work together that the lock opens;
  • Each component is necessary, but not sufficient.

…and so it is the same for any organisation’s stated desire for (what is often termed) ‘Operational Excellence’.

Clarification: The lock system as an analogy is obviously limited because it is a simple ‘digital’ system – it is either locked or unlocked, on or off, black or white, 0 or 1. This doesn’t represent the real world but it is still useful.

The ‘locked – unlocked’ states in my analogy are the difference between:

  • a command and control management system (that will likely be playing with a few levers in the hope of change but which hasn’t unlocked the underlying issues with its ideology); and
  • a truly devolved, adaptive and purpose-seeking system.

The lock is only truly open when all the necessary levers are working together.

What levers?!

Here’s a brief touch on them (with links to further discussions):

Levers1. System-level Clarity:

  • Of purpose: a meaningful ‘why’ for the organisation, and each of its value streams, from the perspective of the customer and society…where profit is an ongoing result, not an excuse;
  • Of philosophy: i.e. how to get there (which incorporates the other four levers)

…where this clarity is instead of, not as well as, a ‘management has the answer for you’ plan.

2. Transparency:

  • Fast, frequent, unadulterated, open-to-all and useful information feedback on what your value streams are achieving over time and if/ how this is changing, NOT activity measures, targets, binary comparisons and management reports
  • Actual trends and rolling forecasts NOT budgets and variance analysis (as explained at the top of this post)

…meaning that the people who do the work gain constant feedback on the capability of their value stream(s) against customer purpose.

3. Front-line Control (Devolution):

  • Ownership of decisions and customers by the value creators: that’s the people working at the front line with the customer and their needs;
  • Freedom to explore, experiment, learn and act:

“Self-managed teams are far more productive than any other form of organising. There is a clear correlation between participation and productivity.” (Margaret Wheatley)

4. Management as Support (NOT control):

  • Provision of enabling technologies and expertise, NOT dictating what these shall be and how they shall be used;
  • Guidance, NOT rules;
  • Farmers, NOT heroes

…in short, value enablers instead of, not as well as, commanders and controllers.

5. Collective Accountability:

You may have noticed that I’ve put this in the centre of my fancy bubbles diagram. That’s because it will be a catalyst for everything else yet, without it, nothing great is likely to be achieved because individualism and extrinsic rewards will act as a highly effective brake.

…can you imagine if you and everyone around you were all truly harnessed together towards the same aim, and how this would change/ enhance your behaviour?!

With these five levers working together then you will get a ‘whole organisation’ that is very clear on what it is trying to achieve, that is laser-focused on their customers, that will constantly innovate and adapt, that is never satisfied with where it’s at, that wants to know who’s doing well (and why) and who’s not (and, importantly, how to help them).

It will also avoid the huge waste inherent within the fixed performance contract (with all the ‘budget setting, target tracking, performance appraising and contingent reward’ paraphernalia dismantled and replaced).

Revisiting those 10 games

In part 1 of this post I set out, and explained, a series of recognisable games that budget holders and their teams play.

However, if you are working on the set of levers explained above, you can expect to create a management system that reverses those games into highly desirable outcomes (for employees, customers and investors). Here are those opposites:

“Always aim to improve upon and beat the competition”

“Never let the team down and be the one that drains the profit-sharing pool”

“Always aim to know and care for customers”

“Always share knowledge and resources with other teams – they are our partners!”

“Never acquire more resources than you need”

“Always aim to challenge (and reduce) costs”

“Always have the ability to understand root causes”

“Always ‘tell it like it is’ and share bad news”

“Always do your best, never fudge the numbers”

“Always challenge conventional wisdom”

Wow, that would be a cool place to work!

‘Beyond Budgeting’: The movement

So, I might well hear you asking “who’s actually doing this mad-as-a-hatter stuff eh Steve?!!” and I would answer that there are loads and loads of organisations (large and small) all around the world who are somewhere along their journey.

If you want to read case studies then there are plenty of places to go to: There’s the Beyond Budgeting Organisation…but there’s also The Lean Enterprise Institute, Theory of Constraints Institute, Kaizen Institute, Vanguard Method …and on and on. Let’s not forget Toyota itself! It’s not about a methodology – the systemic thinking advocated by these different organisations isn’t contradictory.

And, whilst obviously they don’t all agree on exactly everything, they all point towards what has been called by some ‘Management 2.0’ – the realisation that the command and control management system is ‘the problem’ and advocating evolving to a new one (by humbly studying, experimenting and learning).

It’s not a recipe – it’s a philosophy

A recipe has a set of ingredients and related instructions as to how to combine them – it is something that is implemented (being repeatable and reproducible).

A (scientific) philosophy is a theory, based on sound evidence, that acts as a guiding principle for behaviour. It is a direction to follow, where the path is found through experimentation and learning.

This (or any other) post is not meant to prescribe what needs doing. Instead, this whole blog advocates a move away from command-and-control, and towards systemic thinking and adaptive progress towards a meaningful purpose through empowered (which must imply engaged) people.

Caveat: setting out a ‘philosophy’ is absolute twaddle if it isn’t actually believed in, understood and expertly, humbly and continuously practiced by those in leadership.

‘Lipstick on a pig’

lipstickWhat a great phrase! Putting lipstick, some earrings and a blonde wig on a pig doesn’t change what it is…even if you are doing so with good intentions! (Ewe, that’s a weird thought).

There are many organisations out there attempting to command-and-control their way to ‘Operational Excellence’ but this is an oxymoron.

There is a subtle, yet gargantuan, difference between an organisation fumbling (with best intent) with a few of the levers and one that understands the lock.

Note: All quotes, unless specifically stated, come from Hope and Fraser’s book ‘Beyond Budgeting’ (2003) and their associated case studies.  

Crossing the Divide

Picture1Are you interested in crossing that divide?

Okay, listen up 🙂 …this post is my attempt at one of those important bringing-it-all-together ones that provide a big message (see – look at the picture!)…which means that it’s a bit longer than normal because it needs to be.

I thought about breaking it into pieces and publishing bit-by-bit but this would make it longer (each bit needing a top and a tail) and hard to mentally put back together.

So I’ve decided to keep it together and let you, the reader, decide how you consume it. You might like to read it in one; or dip in and out of it during your day; or even set yourself an alert to finish it the next day…so (as Cilla Black used to say) “the choice is yours”. Here goes…

Mike Rother wrote what I believe to be, a very important book (Toyota Kata) about how organisations can improve, and what thinking is stopping them.

In particular, Chapter 9 of the book deals with ‘Developing Improvement Kata [pattern] behaviour in your organisation’. I thought it worthwhile posting a summary of his excellent advice derived from his research….

…and I’ll start with a highly relevant quote:

“Do not create a ‘Lean’ department or group and relegate responsibility for developing improvement behaviours to it.

Such a parallel staff group will be powerless to effect change, and this approach has been proven ineffective in abundance.

Use of this tactic often indicates delegation of responsibility and lack of commitment at the senior level.” (Mike Rother)

Many an organisation has gone down the ‘Lean department’ (or some such label) route…so, given this fact, here’s what Rother goes on to say, combined with my own supporting narrative and thought:


1. Be clear on what we are trying to achieve

If you really want to cross that divide then the challenge that we should be setting ourselves is learning a new way of thinking and acting such that we:

  • get the ‘improvement behaviour’ habit into the organisation; and then
  • spread it across the organisation so that it is used by everyone, at every process, every day.

And to make it even more ‘black and white’: the challenge is NOT about implementing techniques, practices or principles on top of our existing way of managing.

It means changing how we manage. This involves a significant effort and far reaching change (particularly in respect of leadership).


2. What do we know about this challenge?

  • Toyota (from the foundational work of Taiichi Ohno) is considered the world leader in working towards this challenge…they’ve been working towards it for 60+ years;
    • We can study and learn, but should not merely copy, from them;
  • The start, and ever-continuing path, is to strive to understand the reality of your own situation, and experimenting. This is where we actually learn;
  • No one can provide you with an ‘off-the-shelf’ solution to the challenge:
    • There isn’t likely to be an approach that perfectly fits for all;
    • It is in the studying and experimenting that we gain wisdom;
    • ‘Copying’ will leave us flailing around, unknowingly blind;
    • Our path should continually be uncertain up until each ‘next step’ reveals itself to us.

Wow, so that’s quite a challenge then! Here are some words of encouragement from Rother on this:

“There is now a growing community of organisations that are working on this, whose senior leaders recognise that Toyota’s approach is more about working to change people’s behaviour patterns than about implementing techniques, practises, or principles.”


3. What won’t work?

If we wish to spread a new (improvement) behaviour pattern across an organisation then the following tactics will not be effective:

Tactic a) Classroom training:

Classroom training (even if it incorporates exercises and simulations) will not change people’s behaviours. If a person ‘goes back’ into their role after attending training and their environment remains the same, then expect minimal change from them.

“Intellectual knowledge alone generally does not lead to change in behaviour, habits or culture. Ask any smoker.”

Rother makes the useful contrast of the use of the ‘training’ word within sport:

“The concept of training in sports is quite different from what ‘training’ has come to mean in our companies. In sport it means repeatedly practicing an actual activity under the guidance of a coach. That kind of training, if applied as part of an overall strategy to develop new behaviour patterns is effective for changing behaviours.”

Classroom training (and, even better, education) has a role but this is probably limited to ‘awareness’….and even that tends to fade quickly if it is not soon followed by hands-on practising with an appropriate coach.

Tactic b) Having consultants do it ‘to people’ via projects and workshops:

Projects and workshops do not equal continuous improvement. This is merely ‘point’ improvement that will likely cease and even slip backwards once the consultant (or ‘Black Belt’) has moved on to the next area of focus.

Real continuous improvement means improving all processes every day.

Traditional thinking sees improvement as an add-on (via the likes of Lean Six Sigma projects) to daily management. Toyota/ (actual) Lean/ Systems thinking (pick your label!) is where normal daily management equals process improvement i.e. they are one and the same thing.

To achieve this isn’t about bringing experts in to manage you through projects; it is to understand how to change your management system so that people are constantly improving their processes themselves. Sure, competent coaches can help leaders through this, but they cannot ‘do it for them.’

And to be clear: it is the senior leaders that first need coaching, this can’t be delegated downwards.

“If the top does not change behaviour and lead, then the organisation will not change either.”

Tactic c) Setting objectives, metrics and incentives to bring about the desired change:

There is no combination of these things that will generate improvement behaviour and alter an organisation’s culture. In fact, much of this is the problem.

If you don’t get this HUGE constraint then here are a few posts already published that scratch the surface* as to why: D.U.M.B., The Spice of Life, and The Chasm

(* you are unlikely to fully ‘get’ the significance from simple rational explanations, but these might make you curious to explore further)

Tactic d) Reorganising:

Shuffling the organisational structure with the aim (hope) of stimulating improvement will not work. Nothing has fundamentally changed.

“As tempting as it sometimes seems, you cannot reorganise your way to continuous improvement and adaptiveness. What is decisive is not the form of your organisation, but how people act and react.”


4. How do we change?

So, if all those things don’t work then, before we jump on some other ideas, perhaps we need to remind ourselves about us (human beings) and how we function.

The science of psychology is clear that we learn habits (i.e. behaviours that occur unconsciously and become almost involuntary to us) by repeated practice and gaining periodic fulfilment from this. This builds new and ever strengthening mental circuits (neural pathways).

Put simply: we learn by doing.

We need to start by realising that what we do now is mostly habitual and therefore the only way to alter this is by personally and repeatedly practising the desired (improvement pattern) behaviours in our actual daily work.

“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” (Aristotle)

“To know and not to do is not yet to know.” (Zen saying)

Further, a coach can only properly understand a person’s true thinking and learning by observing them in their daily work.

In summary, we need to:

  • practise using actual situations in actual work processes;
  • combine training with doing, such that the coach can see in real time where the learner is at and can introduce appropriate adjustments; and
  • use the capability of the actual process as the measure of effectiveness of the coaching/ learning.

5. Where to start?

So, bearing in mind what is said above (i.e. about needing to learn for yourselves), what follows is merely about helping you do this…and not any ‘holy grail’. If there is one then it is still up to you to find it!

An experienced coach:

“Coaches should be in a position to evaluate what their students are doing and give good advice…in other words, coaches should be experienced….

…If a coach or leader does not know from personal experience how to grasp the current condition at a process, establish an appropriate challenge [towards customer purpose] and then work step by step [experiment] towards it, then she is simply not in a position to lead and teach others. All she will be able to say in response to a student’s proposals is ‘Okay’ or ‘Good job’ which is not coaching or teaching.

The catch-22 is that at the outset there are not enough people in the organisation who have enough experience with the improvement kata [pattern] to function as coaches…

…it will be imperative to develop at least a few coaches as early as possible.” (See establishing an Advance Group below)

A word of warning: Many people assume a coaching role, often without realising that they are doing so. Such a presumption seems to be something that anyone hierarchically ‘senior’ to you considers to be their right. As in “Now listen up minion, I am now going to coach you – you lucky thing!*”

(* I had a rant about this in my earlier post on ‘people and relationships’ …but I’m okay now 🙂 )

So: Before any of us assert any supposed coaching privileges, I think we should humbly reflect that:

“The beginner is entitled to a master for a teacher. A hack can do incredible damage.” (Deming)

Who practises first?

The improvement pattern is for everyone in the organisation……but it needs to start somewhere first.

“Managers and leaders at the middle and lower levels of the organisation are the people who will ultimately coach the change to the improvement kata [pattern], yet they will generally and understandably not set out in such a new direction on their own. They will wait and see, based on the actions (not the words) of senior management, what truly is the priority and what really is going to happen.”

The point being that, if the organisation wants to effect a change in culture (which is what is actually needed to make improvement part of daily management) then it requires the senior managers to go first.

This statement needs some important clarifications:

  • It isn’t saying that senior leadership need to stand up at annual road-shows or hand out some new guru-book and merely state that they are now adopting some shiny new thing. This will change nothing. Far better would be NOT to shout about it and just ‘do it’ (the changed behaviours)…the people will notice and follow for themselves;
  • It isn’t saying that all senior leaders need to master all there is to know before anyone else can become involved. But what is needed is a meaningful desire for key (influential) members of the senior team to want to learn and change such that their people believe this;
  • It isn’t saying that there aren’t and won’t be a rump of middle and lower managers who are forward thinking active participants. They exist now and are already struggling against the current – they will surge ahead when leaders turn the tide;
  • It isn’t saying that the rest of the people won’t want the change: the underlying improvement behaviours provide people with what they want (a safe, secure and stimulating environment). It is just that they have understandably adopted a ‘wait-and-see’ habit given their current position on a hierarchical ladder and the controls imposed upon them.

Establishing an Advance Group

The first thing to notice from this sub-title is that it is NOT suggesting that:

  • we should attempt to change the whole organisation at once; or that
  • we should set up some central specialist group (as in the first quote in this post)

Instead, it is suggesting that we:

  • find a suitable1 senior executive to lead (not merely sponsor!2);
  • select/ appoint an experienced coach;
  • select a specific value-adding business system3 to start with;
  • form a suitable1 group of managers (currently working in the system, not outside it);
  • provide initial ‘awareness’ education;
  • ‘go to the Gemba’ and study4 to:
    • gain knowledge about purpose, demand, capability, and flow; and then
    • derive wisdom about the system conditions and management thinking that make all this so;
  • perform a series of improvement cycles (experimenting and learning);
  • reflect on learnings about our processes, our people and our organisation…
    • …deriving feelings of success and leading to a new mindset: building a capability to habitually follow the improvement routine in their daily management;
    • …and thereby crafting a group of newly experienced managers within the organisation who can go on to coach others as and when other business systems wish to pull their help.

(for explanatory notes for superscripts 1 – 4, see bottom of post)

Caution: Don’t put a timescale on the above – it can’t be put into an ‘on time/budget/scope’ project straight jacket. The combination of business system, team and organisational environment is infinitely varied…it will take what it takes for them to perform and learn. The learning will emerge.

A number of things should be achieved from this:

  • meaningful understanding and improvement of the selected business system’s capability;
  • highly engaged people who feel valued, involved and newly fulfilled;
  • a desire to continue with, and mature the improvement cycles (i.e. a recognition that it is a never-ending journey);
  • interest from elsewhere in the organisation as they become aware of, develop curiosity and go see for themselves; and
  • A desire to ‘roll in’5 the change to their own business system.

A caveat – The big barrier:

Every system sits within (and therefore is a component of) a larger system! This will affect what can be done.

If you select a specific value-adding business system, it sits within the larger organisational system;

If you move up the ‘food chain’ to the organisational system, it potentially sits within a larger ‘parent organisation’ system

….and so on.

This is a fact of life. When studying a system it is as important (and often more so) to study the bigger system that it sits within as studying its own component parts.

It is this fact “that so often brings an expression similar to that of the Sheriff Brody in the film ‘Jaws’ when he turns from the shark and says ‘we need a bigger boat’. Indeed we do!” (Gordon Housworth, ICG blog)

If the bigger system commands down to yours (such as that you must use cascaded personal objectives, targets, contingent rewards and competitive awards) and your learning (through study and experimentation) concludes that this negatively affects your chosen business system then you need to move upstairs and work on that bigger system.

You might respond “But how can we move upstairs? They don’t want to change!”. Well, through your studying and experimentation, you now have real knowledge rather than opinions – you have a far better starting point!


…and there you have it: A summary of Mike Rother’s excellent chapter mixed with John Seddon’s thinking (along with my additional narrative) on how we might move towards a true ‘culture of improvement’.

There is no silver bullet, just good people studying their system and facilitating valuable interventions.

Notes: All quotes used above are from Mike Rother unless otherwise stated.

  1. Suitable: A person with: an open mind, a willingness to question assumptions/ conventional wisdom, and humility; a desire and aptitude for self-development, development of others and for continual improvement (derived from Liker’s book – The Toyota Way to Lean Leadership)
  2. On leading: “Being a…Sponsor is like being the Queen: you turn up to launch a ship, smash the champagne, wave goodbye and welcome it back to port six months later. This attitude is totally inappropriate for leading…in our business environment. We need ownership that is one of passion and continual involvement…” (Eddie Obeng)
  1. The business system selected needs to be a horizontal value stream (for the customer) rather than a vertical silo (organisational function) and needs to be within the remit of the senior executive.
  1. Study: Where my post is referring to Seddon’s ‘Check’ model
  1. Roll in: The opposite of roll out – pulling, instead of pushing. Please see Rolling, rolling, rolling… for an explanation of the difference.

Water water everywhere

Weather pictureSo, it’s coming to the end of December 2015 and the UK is reeling from torrential rain storms and, as a result, unprecedented flooding across circa. half the nation.

It makes for a really interesting case study of systems.

As a reminder, a system is “a network of inter-dependant components that work together to try to accomplish the aim of the system” (Deming)

Now the UK’s rain water dispersal system has many components, such as:

  • the high ground on which the majority of the rain falls on;
  • the small streams from which it flows downwards;
  • the lakes and rivers in which it gathers;
  • the flood plains on which the water spreads out;
  • the man-made structures (banks, bridges, culverts, tunnels, protection barriers) put in place to ‘guide’ the water through major towns and cities; and finally
  • down to the estuaries which feed into the sea

…and all along these components lays humanity and its man-made assets (domestic and commercial).

We all know that there is variation in rain-fall (though in the UK the rain switch seems to be more often in the ‘on’ rather than ‘off’ position) and that there are sometimes special events. Unfortunately the UK has experienced record breaking rainfall…

…and the system is unable to cope without having a drastic effect on people.

The UK Environment Agency (EA) has the unenviable task of protecting people and their possessions. They have spent years, and billions of pounds, building flood defences.

The outcome of the rain, whilst somewhat grisly for those involved, provides lots of examples of behaviour that is optimal for one component but catastrophic for another.

How about these:

  • sand baggingSand-bagging around your house: This is at the smallest end of the scale and sounds sensible and innocuous doesn’t it. What’s not to like?

Well, let’s say that you successfully sand-bag around your gate…where does the water go now?

…next door! This sets off a chain reaction. As each person sand-bags their door, then the volume of water that has been ‘turned away’ increases, making the poor bugger who hasn’t managed to plug their hole enough to become deluged with everyone else’s diverted problem; which takes us up the scale to…

  • Fosse BarrierThe Fosse Barrier was built to protect the City of York from the River Ouse. Once closed, it prevents the River Ouse from forcing flood waters back up the tributary River Fosse and into the City of York, whilst simultaneously pumping the River Fosse around the barrier and into the River Ouse. Sounds tricky!

The barrier was lowered a few days ago but, due to concerns about the unexpectedly high waters flooding (and thereby seizing up) the barrier mechanism, the EA took the (brave and/or daft?) decision to lift the barrier before this could occur…and thus knowingly flooded parts of York…although, by their calculations, reducing flooding elsewhere.

Here’s a picture of York after the River Fosse burst its banks:

York flooded

 …and on to an even bigger example:

  • The Jubilee River is an artificial channel that was dug (at a cost of £110m) to divert flood waters from the River Thames around the towns of Maidenhead and Windsor. It was opened in 2002 and, given that it rejoins the River Thames below these towns, those residents unlucky to be downstream are seriously unhappy about it!

Here are a couple of quotes from angry residents It’s grossly unfair that a man-made river can be to the benefit of some people and to the detriment of others.” and “I believe we are being used as sacrificial lambs!”

…and so what might the EA’s answer to this be? Well, to extend the scheme of course! “We have very extensive plans to continue the Jubilee River all the way down…to Teddington…It’s very expensive but it’s got huge support.” I bet it does – by those who will benefit! Erm, but won’t that just move the problem again?

Now, the EA can build walls and divert rivers the length and breadth of the land…and we can be certain that each engineered ‘solution’ will uncover the need for yet another one nearby. But what about reasons as to why the flooding is soooo bad this time? Is it about more than the volume of rain falling?

Here’s an interesting article written by George Monbiot on the subject (it’s aptly called ‘Going downhill fast’). Rather than trying to cope with the water once it’s got into our rivers, he looks at why it is rushing at such speeds to get there…such as:

  • down from all that high ground that used to have trees on it (which massively soak up and contain water) but which have been cleared for grazing, grouse shooting and other such uses; and
  • over all that land that has been concreted for industrial, commercial and domestic purposes.

The point:

Now, the above is in no way an attempt to advise the UK EA on what to do! I am merely using it all as a superb example of a complex and dynamic system, with all its various components.

I often talk about two excellent systems effects/ analogies and they are brilliantly demonstrated above:

  • ‘Systems bite back’ and
  • ‘The push down, pop up’ or ‘balloon effect’: “squashing down on activity in one place causes it to pop up somewhere else”

The whole point of systems thinking is to recognise that everything in the system is connected and interacts, usually in highly complex and unexpected ways…and in so realising, move our thinking to the ‘whole system’ level, rather than its components.

In the words of Indira Gandhi “Whenever you take [what you think is] a step forward, you are bound to disturb something.”

…and so it is the same within any organisation, and its value streams.

Organisational value streams

Each of our value streams are like the UK rain water dispersal system: they have a purpose, a start and end, and many components in between.

To manage at a component level is to cause problems elsewhere.

We can only truly improve a value stream (the system) when we think about it from end-to-end, understand it’s purpose from the customer’s point of view and fully collaborate along its full horizontal length….and, to do this, we need to remove any and all system conditions and management thinking that are impediments.

False Economies

chasing moneySo I expect we have all heard the phrase ‘Economies of Scale’ and have a view on what is meant.

The phrase is probably covered within the first pages of ‘Economics 101’ and every ‘Beginner’s book of management’. I think the idea has even leaked out of these domains and is used in every-day parlance. It is seen merely as ‘common sense’*.

(* please read and reflect upon a hugely important quote on ‘common sense’ when you get to the end of this post)

So what is the thinking behind ‘Economies of Scale’?

Let’s start at the beginning: Why is it said that we benefit from ‘economies’ as an organisation grows larger?

The idea in a nutshell: To run a business you need resources. As you grow, you don’t necessarily need a linear increase in those resources.

Basic example: A 1-man business premises needs a toilet (if he needs to go, well he needs to go). But when the next person joins the growing company he doesn’t get his own personal toilet written into his ‘remuneration package’. No, he has to share the existing toilet with his fellow employee. You can see this logic for lots of different things (one building, one IT system, one HR manager….), but I reckon a toilet is about as basic as it gets.

The theory goes that as the volume of output goes up* then unit costs come down (where unit cost = total cost/ units of output).

(* I’m writing generally now…I’ve moved on from toilet humour 🙂 )

It should be noted that the classical economists that came up with the theory did accept the idea of ‘diseconomies of scale’: that of costs rising as growing organisations become more complex, more bureaucratic…basically harder to manage.

You’ll likely see all this expressed in economics text books with a very simple diagram (below) and, voila, it is surely so!

economies of scale

Getting into more specifics about the phenomenon, three distinct reasons are given for those scale economies:

  • Indivisibility: Some resources aren’t divisible – you can’t (easily) have half a toilet, a quarter of a receptionist, 1/8th of a manager and so on.
  • Specialisation along with Standardisation: this reason goes way back to the writings of Adam Smith and his famous book called ‘The Wealth of Nations’ (1776). In it, he used the example of a pin factory to explain the concept of ‘the division of labour’. He explained that one person performing all the steps necessary to making a pin could perhaps make only 20 pins a day but if the pin-making process were broken up into a series of limited and standardised operations, with separate people performing them in a joined-up line, productivity could rise to thousands of pins per day per worker.
  • Machinery: Investing in ever larger machines mean that they can turn out more and at a faster rate…and our beloved unit costs come down. In service organisations the equivalent could be a ‘bigger, better’ telephone system, IT system,…etc.

Sounds like a water tight case to me – ‘Economies of scale’ proven, case dismissed!

Not so fast…a few dissenting voices:

“All the above seems to be about managing our costs? We are concerned about where this might lead – shouldn’t we be first and foremost focused on delivering value to our customers?”

“We’ve got really low unit costs at lots of our activities…and we keep on making ‘economies of scale’ changes to get them even lower…but this doesn’t seem to be reducing our total costs (they remain annoyingly high)…are we missing something?”

“Gosh, that ‘economies of scale’ average cost curve looks so simple…so all we need to know is when we are at the optimum size (Q) and stop growing. Easy! Can someone tell us when we reach that point? How about a nice warning signal when we are getting close? What do you mean it’s just ‘theoretical’ and no-one actually knows?!”

“I’ve heard that ‘behavioural economics’ is debunking a central assumption within Adam Smith’s classical economic ideas. Apparently we are all human beings (with our own unique purposes), not rational robots!” (Nice link: Who cooked Adam Smith’s dinner?)

“We don’t make pins. We are a service organisation. We have much variety in demand and our customers are ‘co-producers’ within our process…specialisation and standardisation can do much harm to them, and therefore us!”

Meanwhile, on another planet…

Taiichi Ohno developed the Toyota Production System (TPS). In so doing, he used totally different thinking, with profound results.

(Note: Historians have identified a core reason for this difference in thinking as the heavily resource-constrained context that Japan found itself in after the 2nd world war. This was in complete contrast to 1950s America that had an abundance of resources and booming customer demand. In short, Ohno had to think differently to succeed.)

The big difference – Flow, not scale, as the objective: Ohno concentrated on total cost, not unit costs. He realised that, first and foremost, what matters is how smoothly and economically a unit of demand is satisfied, from initial need through to its completion (in the eyes of the customer).

The flow is everything that happens between these points and, as well as all the value-adding steps, this includes:

  • all the time that nothing is happening (a huge proportion of a traditional process)
  • all the steps that occur but shouldn’t really need to (i.e. they are non-value adding);
  • all the repeat and/or additional steps needed because something wasn’t done right; and (the worst of all)
  • everything needed to be done when the customer returns with the good or service as not being acceptable (where this could be days, weeks or even months later)

There’s no point in a particular activity being made ‘efficient’ if this is detrimental to the flow.

‘Economies of scale’ thinkers (and their management accountants) are obsessed with how much each activity costs and then targeting reductions. Their belief is that, by reducing the costs of each activity, these aggregated savings will come off the bottom line. Such thinking has led to:

  • ‘large machine thinking’ (which also relates to centralisation/ shared services);
  • ‘batch thinking’ to make these resources work (allegedly) more efficiently;
  • ‘push thinking’ to keep these resources always working – high utilisation rates are king; and
  • inflexibility due to highly specified roles and tasks

…which cause a huge amount of waste and failure demand.

Ackoff made incredibly clear in his systems TED talk (using the automobile as his example) that trying to optimise the components of a system will not optimise the system as a whole. In fact, the reverse will be true and we can expect total costs to rise.

Rather than trying to get the cost of a specific activity down, Toyota (and other system thinkers) focus on the end-to-end horizontal flow (what the customer feels). This is a different (systemic) way of thinking and delivers far better outcomes.

It is no coincidence that Ohno is also credited with much of the thinking around waste. It is only by thinking in terms of flow that waste becomes visible, its sources understandable, and therefore its reduction and removal possible.

In short, Cost is in flow, not activity.

Flow thinking has led the design of systems to:

  • ‘right-size thinking’ and ‘close to customer thinking’;
  • ‘single-piece flow thinking’;
  • ‘pull thinking’; and
  • handling variety ‘in the line’ thinking (Note to self: a future post to be written)

These all seem counter-intuitive to an ‘economies of scale’ mindset, yet deliver far better outcomes.

(How) does this apply to service?

Okay, so Ohno made cars. You might therefore question whether the above is relevant to service organisations. Here are examples of what the ‘Economies of scale’ mantra has given us in service, broken down into comments on each of specialisation, standardisation, centralisation and automation:

Specialised resources: Splitting roles into front, (middle) and back offices; into demand takers (and ‘failure’ placators), transactional processors, back room expert support teams and senior ‘authorisers’…meaning that:

  • we don’t deal with the customer when/ where they want;
    • causing delay, creating frustration – which needs handling;
    • incorrect setting of customer expectations;
    • unclear ownership, leading to the customer having to look out for themselves
  • we have multiple hand-offs;
    • causing batching, transportation, misunderstandings, re-work (re-reading, re-entering, repeating, revising);
    • we break a unit of value demand into separate ‘work objects’ which we (hope to) assign out, track separately, synchronise and bring back together again (…requiring technology);
  • we collect information to ‘pass on’ (…requiring technology)
    • often passing on incomplete and/ incorrect information (or in Seddon’s words “dirty data”), which escalates to the waste of dealing with the defects as the unit progresses down the wrong path;
  • we categorise, prioritise, allocate and schedule work around all these roles (…requiring technology)
  • …all of the above lengthens the time to deliver a service and compromises the quality of the outcome, thus generating much failure demand (which we then have to deal with)

Standardised activities: Trying to achieve a standard time (such as Average Handling Times) to perform a standard task (using standard templates/ scripts) that appears to best fit with the category that ‘we’ (the organisation) jammed the customer into

  • rather than listening to the customer’s need and attempting to deliver against it (i.e. understanding and absorbing customer variety);

Centralisation: Seeing ‘shared services’ as the answer using the “there must be one good way to do everything” mantra.

  • creating competition for shared service resource between business units and the need for SLAs and performance reporting;
  • requiring some ‘super’ IT application that can do it all (“well, that’s what the software vendor said!”);
  • ‘dumbing down’ the differences between services (and thus losing the so-called ‘value proposition’)
  • loosening the link between the customer and the (now distant) service.

Automation: Continually throwing Technology at ‘the problem’ (usually trying to standardise with an ‘out of the box’ configuration because that will be so much more efficient won’t it) and, in so doing, creating an ever-increasing and costly IT footprint.

Whilst technology is amazing (and can be very useful), computers are brilliant at performing algorithms (e.g. calculations and repetition) but they are rubbish at absorbing variety, and our attempts at making them do so will continually create failure demand and waste.

In summary: ‘Economies of scale’ thinking is more damaging in service because of the greater variety in demand and the nature of the required outcomes.

To close:

This post isn’t saying that scale is wrong. It is arguing that this isn’t the objective. Much harm is, and has been, done by blindly following an activity focused logic (and the resultant ‘specialise, standardise, centralise, automate’ mantra)

Further, I get that some of you might say “you’ve misunderstood Steve…we aren’t all running around saying we must be big(ger)!”…but I’d counter that the ‘economies of scale’ conventional wisdom is implied in a relentless activity cost focus.

Put simply, “Economy comes from flow, NOT scale” (Seddon)

End notes

Beware ‘Common sense’:

“There is a time to admire the grace and persuasive power of an influential idea, and there is a time to fear its hold over us.

The time to worry is when the idea is so widely shared that we no longer even notice it, when it is so deeply rooted that it feels to us like plain common sense.

At the point when objections are not answered anymore because they are no longer even raised, we are not in control: we do not have the idea; it has us.” (Alfie Kohn)

Credit: The ‘Economies of scale’ explanation comes from reading a John Seddon paper.

Being fair to Adam Smith: He understood that the specialisation of tasks can lead to “the almost entire corruption and degeneracy of the great body of the people [the workers]. … unless government takes some pains to prevent it.” i.e. it might be great for the factory owners…but their workers are people, not machines.

What do germs have to do with modern management?

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 🙂