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/or 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 🙂

A state of flow

rock_climb_will_mono-2I often talk about flow in the sense of how value flows through a value stream from a customer’s demand trigger through to its satisfaction.

However, this post is all about a different use of the word ‘flow’.

Professor Mihaly Csikszentmihalyi – I’m not going to pronounce that! – is world famous for his studies and writings on happiness and creativity. His seminal book ‘Flow: The psychology of optimal experience’ (1990) outlines his theory that people are happiest when they are in a state of flow.

If you are in a state of ‘flow’ then this means that you are completely absorbed by an activity and a situation…and you are so involved that nothing else matters. It’s what is often described as being ‘in the zone’.

It is the optimal state of intrinsic motivation and is something that we all experience at times, even to the point that you forget about time, food, self ego and so on. And, given this, you can see that it is an incredibly fulfilling and enjoyable state to be in.

It has been noted that this flow state is a functional mode of ‘being’ that eastern meditation masters have been pointing to for millennia.

An example:

“The mystique of rock climbing is climbing; you get to the top of a rock glad it’s over but really wish it would go on forever. The justification of climbing is climbing, like the justification of poetry is writing; you don’t conquer anything except things in yourself…. The act of writing justifies poetry. Climbing is the same: recognizing that you are in flow. The purpose of the flow is to keep on flowing, not looking for a peak or utopia but staying in the flow. It is not a moving up but a continuous flowing; you move up to keep the flow going. There is no possible reason for climbing except the climbing itself; it is a self-communication.” (Mihaly Csikszentmihalyi, Flow)

It just so happens that, having regularly climbed some years ago, I really ‘get’ his example…and even if you are afraid of heights but have been on a climbing wall once in your life I bet you weren’t thinking about much else whilst holding on!

Your flow examples will be different to mine – other activities often cited as examples are musicians lost in their music and painters becoming one with the process of painting i.e. they experience ‘the suspension of time’. Have a think about when you are totally in the zone and not thinking about the rest of the world.

So what?!

Now, I know I can’t spend all my days [climbing/….] (please substitute your personal flow activities in here) and that I need to earn money to live…but wouldn’t it be brilliant if I could regularly attain a state of flow in my work?!

Csikszentmihalyi suggests that flow occurs when there is neither anxiety nor boredom.

Anxiety occurs when the challenge of the moment exceeds our capabilities. Boredom occurs when we are capable of doing considerably more than the challenge presented to us.

Tying this in to Frederick Hertzberg’s theory of motivation: Anxiety and boredom are demotivating, flow is motivating.

A command-and-control management system is likely to:

  • dictate methods/ solutions/ activities to the workers;
  • set grand ‘implementation’ plans that seem massive and unachievable “given what we know about our reality!”;
  • focus on results, rather than constant iterative improvement;
  • set targets that may be impossible or out of our control (leading to anxiety) or
  • may be easily achieved (boredom)
    • “….though, if I get a bonus for achieving the easy target, I am unlikely to tell someone I am bored for fear of being given the impossible instead.”
  • use end-game language (such as ‘best practice’, ‘target operating model’, ‘solution’, ‘project completion’…) rather than focusing on the journey;
  • likely lock-in ‘the plan’ and focus much effort on forensic examination (and blame) of variance rather constant learning and adjustment.

…but, ultimately, provides an environment that constrains people’s ability to achieve flow in their work.

We can see that the Systems thinking ‘scientific method’ of:

  • constant/ never-ending:
  • experimentation;
  • by the workers/ management together;
  • to attain progressively more challenging target conditions;
  • which are meaningful to the customer

is most likely to provide workers and management with a state of enjoyable psychological flow where their skills, and the challenges they take on will constantly grow.

I love being in a state of flow…and I expect you do too.