Thanksgiving is a time of reflection. Over the last few months, I have been trying to write a weekly blog focusing on using systems thinking, learning and measurement to drive organization change. One of my favorite characters in this saga is Jack Welch, because to me he is still the epitome of a manager who understood these principles.
Welch never professed to having all the answers. He was a man who understood how to ask the right questions and used measured data to drive the answers. As his career progressed he became more aggressive in creating process that would drive the directions he wanted to go. (see previous blog for more on this subject).
I see patterns in mathematical process analysis and when I can't see them I know that we are not asking the right questions of the data.
Unfortunately, as my friend Steve McClung says, 'a lot of people aren't interested in doing the heavy lifting that this kind of analysis requires'. (Steve is currently manager of Rhodia's plant in Spartanburg and the Asset Manager for one of its business'. He is also one of the best Plant Managers I have ever worked with).
But, in this case I don't agree with Steve. I favor Michael Hammer's perspective that he lays out in his book, 'The Agenda' ....
A company's measurement systems typically deliver a blizzard of nearly meaningless data, that quantifies everything insight, no matter...
We have created a whole generation of managers who have this belief. But unfortunately the situation has more complex and troublesome outcomes.
- that it is devoid of any particular rhyme or reason;
- that it is so voluminous that it is to be deemed unusable;
- that is delivered so late that it is to be virtually useless;...
In short measurement is a mess.
To understand the problem, one has to take into account how organizations are built. To cope with the complexity of organizational life functions are divided into divisions such as manufacturing, marketing, R&D etc. For each of these functions performance measures are created, supported by key performance indicators. The people in each function are rewarded or punished for how effectively they attain those goals. When all the functions achieve their goals the organization will prosper, or, so the theory goes.
In fact, in most organizations this isn’t true and it underlies one of the biggest problems we as consultants face in trying to effect change.
It is also why we meet significant resistance to change from some sectors. We are trying to change 'to something better', but the resistors often see their positive reward system stripped away and not replaced. From their perspective this means that the change will have a significant negative impact on their bonus system, on the satisfaction of their job and ultimately on their life.
So how do you create change when there is this insidious contradiction to change? How do you get people to focus on the needs of the whole system, when they only get rewarded for the outcomes of their sub-system?
This kind of zero sum game plays out everywhere we look. We now realize that the recent melt down in the financial system was not just a random affair. Many key players in the banking system understood the risks they were taking. They even had a term for the impending disaster. But, it wasn’t their problem. The rewards were so substantial that they were driven to take on more and more risk. By the time things got bad they would take their money and run.
There isn't one answer, one process, one software package that drives that change.
The real answer can only come about when the organization learns how to learn. This is called double loop learning. Unfortunately for adults, the learning process is slower, more complex and much less natural than it is for children who often just behave like sponges.
Adults, need a goal which I call a target and a process to measure how far they are hitting off the target to adjust or learn. In conjunction with this we need practice and rewards and here I am not talking about money.
Now what does all this have to do with Thanksgiving?
Thanksgiving is a time of reflection. Are you learning 'The Art of the Bull's Eye?
more soon....
10 comments:
Hi Ron, great article. Made all the better for reading it today, when I held my first Thanksgiving meal in the UK in honour of my US friends whom I have been visiting for about 5 years since meeting them on vacation.
So, back to the article, although I totally agree with everything you say, I work in the public sector which not only has performance indicators and key performance indicators, it also has government and statutory targets/measures. In our efforts to use Lean and systems thinking, we find it difficult to change some of the measures - not because staff will lose rewards (these don't exist in the public sector) - but because we might lose our rating in the government's eyes.
Any suggestions for these types of issues?
Thanks for the opportunity to reflect, I think I shall be doing Thanksgiving again...
Abigail
It definitely is time for reflection and thank those who have changed our lives for better and made positive impact on the lives who need the most to better their financial standing on the ground. What Jack did for his organization was breath taking at the time but would the same principles apply today when so much has changed in the way we do our business? Probably not. Understanding the underlying currents for the recent financial melt down and the decline of Corporate America, thanksgiving is definitely not meant for the ones who have caused such a catastrophe for a country that should have been riding high with flying colors. What is wrong with the systems that had served so well in the past? Is there a missing link or a dotted line that most of us have failed to take notice of. We probably did not understand what simplicity meant in the Corporate world. Simple systems do succeed a lot more than the complex ones. We might have had over complicated the systems and then applied technology to drive the over complicated processes. It is time now that we had looked at it again and take lessons from Forest Gump for the same of our children.
"So how do you create change when there is this insidious contradiction to change? How do you get people to focus on the needs of the whole system, when they only get rewarded for the outcomes of their sub-system?" Such a great reflection and great question Ron.
Certainly transformational change requires a 'whole' systems view but is often compartmentalized instead. As you say many overlook the importance of thorough analysis, including stakeholder analysis.
Great reflections. Gail
Ron--Thanks for your Thanksgiving post. I wasn't certain if you got stuck in air travel delays, but my sympathies if the case. Never fun, and Thanksgiving day can bring out the rueful aspects of this pointedly.
Your comments are quite interesting. I agree with much of the thrust and certainly the spirit of your comments to improve things in fundamental ways--and the way current measurement approaches and systems often confound deeper change and learning. They certainly create predictable resistance to doing things differently by reinforcing people to do more of however value is presently "defined."
This stimulates a couple of thoughts.
First, I've been increasingly struck by the unreality of the commonly expressed view that "if you can't measure it, it isn't real (or it isn't manageable)." What a silly--and, counter-productive, and simply wrong--concept if innovation is the aim. Clearly, all great breakthroughs may have milestones of a sort associated with them (the Manhattan project was a huge example of complex collective effort of sophisticated knowledge workers searching for something new and practical--and highly scientific and mathematical to boot), but "metrics" of the sort that people in organizations normally speak of would have been absurd--and in fact precluded the kind of expansive, creative thinking and interdisciplinary dialogue needed for the task. I'm inclined to see metrics as helpful for operational disciplines and activities, but not for truly innovative, inventive, or creative tasks. These require a certain freedom that belies metrics--certainly as customarily practiced--and what they seek to "reify."
Secondly, I have increasingly been struck that learning should often be less an aim of organizational life than "unlearning." To quote that great sage of baseball, Satchel Paige, "It's not what you don't know that hurts you. It's what you know that just ain't so." There are so many examples of this in organizational life that it is hard to know where to begin. This has practical implications for change and organizational development of course. And it is entirely in keeping with Lewin's fundamental understanding of the value of "unfreezing" current reality. Certainly this can be done by many means, data-driven measures and new learnings among them. But the object is to unfreeze, to unlearn things, as it were, so that deeper, new, creative approaches can emerge.
Anyway, these are a few thoughts. Happy to dialogue on further.
Thanks for your stimulating writings. And hope your travels home, if delayed, were safe and successful after all.
Marty Goldberg, Distant Drummer LLC
Excellent, Ron. I wouldn't be so quick to pooh on your friend Steve's perspective--you and he are not so different in viewpoint. I call the breakdown you highlight in org structure, measurement & reward the great curse of 100 Years of "Management Science." Of course, if we wallow in that and reward related behavior for years, it only serves to LIMIT what we can achieve through organizations and tends to make us extremely LAZY (if not outright neglectful) over time--Change this course and managing for optimal growth and profit DOES require heavy lifting...you're bullseye insights are helping point the way. Happy T-giving!
Ron,
Thanks for your Thanksgiving post. I wasn't certain if you got stuck in air travel delays, but my sympathies if the case. Never fun, and Thanksgiving day can bring out the rueful aspects of this pointedly.
Your comments are quite interesting. I agree with much of the thrust and certainly the spirit of your comments to improve things in fundamental ways--and the way current measurement approaches and systems often confound deeper change and learning. They certainly create predictable resistance to doing things differently by reinforcing people to do more of however value is presently "defined."
This stimulates a couple of thoughts.
First, I've been increasingly struck by the unreality of the commonly expressed view that "if you can't measure it, it isn't real (or it isn't manageable)." What a silly--and, counter-productive, and simply wrong--concept if innovation is the aim. Clearly, all great breakthroughs may have milestones of a sort associated with them (the Manhattan project was a huge example of complex collective effort of sophisticated knowledge workers searching for something new and practical--and highly scientific and mathematical to boot), but "metrics" of the sort that people in organizations normally speak of would have been absurd--and in fact precluded the kind of expansive, creative thinking and interdisciplinary dialogue needed for the task. I'm inclined to see metrics as helpful for operational disciplines and activities, but not for truly innovative, inventive, or creative tasks. These require a certain freedom that belies metrics--certainly as customarily practiced--and what they seek to "reify."
Secondly, I have increasingly been struck that learning should often be less an aim of organizational life than "unlearning." To quote that great sage of baseball, Satchel Paige, "It's not what you don't know that hurts you. It's what you know that just ain't so." There are so many examples of this in organizational life that it is hard to know where to begin. This has practical implications for change and organizational development of course. And it is entirely in keeping with Lewin's fundamental understanding of the value of "unfreezing" current reality. Certainly this can be done by many means, data-driven measures and new learnings among them. But the object is to unfreeze, to unlearn things, as it were, so that deeper, new, creative approaches can emerge.
Anyway, these are a few thoughts. Happy to dialogue on further.
Thanks for your stimulating writings. And hope your travels home, if delayed, were safe and successful after all.
Marty
mdg@distantdrummer.us.com
Abigail, first of all thanks for the comment and then my apologies for not responding earlier.
Victor Hugo said "Nothing can stop an idea whose time has come".
Almost every country in the world is now attacking their deficits by reducing the size of government. It will be a shame if this is their only goal.
The real opportunity which the private sector has embraced with passion over the last decade is to improve productivity and customer service and satisfaction WHILE they have shrunk in size and unit costs.
To accomplish this means that the organization has to envision a new way of doing things and determine how to measure the new outcome.
I think the new government in the U.K. would be very open to new ideas for change.
Keep your chin up and go for it.
Rial. First of all thank-you for responding to my blog and my apologies for the delay in commenting. The loss of ethics and values is also a worry to me. My family laughs at me because I won't download copied music, films or software. It is simple. To me it is stealing, but we live in a world where I am in the minority.
Nice reflections...talk soon.
Ron
Hi Gail...First of all thank-you for responding to my blog and my apologies for the delay in commenting.
I didn't want to present the perspective that I think change is impossible or so complicated that it takes years.
I am a great believer in systems theory. I think we can break down a larger system into subsystems and drive very positive and very effective change.
Here is an example of one of my clients...
The client was Blue Cross.
We were hired to improve their productivity and quality of work life.
The area of focus initially was the customer service group which was under incredible pressure to reduce cost and improve productivity.
They had hired a large of number of people, but call waiting time was still unacceptable. The manager had become so overwhelmed by the stress that she had taken sick leave.
The management team wanted to reduce the average call time significantly, but the data showed time getting longer.
So what was the problem?
After doing a review of the work processes I met with the management team and told them that reducing the call time would be easy.
I proceeded to play act how this could be done by sitting at a phone table and demonstrating how this problem could be simply solved.
I picked up the phone and conducted the following dialogue...
'Thank-you for calling Blue Cross. I am sorry you have this problem with your claim, but this is the best we can do. Good-bye."
The management team looked at the consultant with disbelief and were about to throw me out, when I made it clear that I was being facetious to make a point.
The actual problem was not in the customer service group, but in the claims administration group.
The two groups reported to two different managers. The new manager of the admin group had put in very tight time frames for the administering of a claim and reduced head count. This process had increased productivity significantly.
Unfortunately the only way the administrators felt they could meet the time frames was by taking short cuts which resulted in a significant increase in errors. This wasn't a problem because they would be caught by the customer service people.
The measurement system was rewarding the shoddy work done in the claims area.
Without going into all the details, the way we fixed the problem was by creating a learning organization that analyzed and categorized claim administration problems and then tracked them back to the administrator that handled the claim.
We then built training programs and IT programs to improve the quality.
The customer service group became the hub of creating this leaning organization. Product quality went up, overall cost went down, and the real speed in process handling also went down. But most important quality of work life improved.
But I had another client that took years to effect systems change, because we could not change how the marketing guys were rewarded. More on that another time.
Ron
Hi Gail.
Thanks for your comments.
I didn't want to give you the impression that I thought it impossible to drive large scale change. The point is if you don't understand how people are being measured you will fail. And changing those measures is sometimes very hard.
Let me give you a brief case where I was succesful...
The client was Blue Cross.
We were hired to improve their productivity and quality of work life. The area of focus initially was the customer service group which was under incredible pressure.
They had hired a large of number of people, but call waiting time was still unacceptable. The manager had become so overwhelmed by the stress that she had taken sick leave.
The management team wanted to reduce the average call time significantly, but the data showed time getting longer.
So what was the problem?
After doing a review of the work processes I met with the management team and told them that reducing the call time would be easy.
I proceeded to demonstrate how this could be done by sitting at a phone table. I picked up the phone and conducted the following dialogue....
'Thank-you for calling Blue Cross. I am sorry you have this problem with your claim, but this is the best we can do. Good-bye."
The management team looked at the consultant with disbelief and were about to throw me out, when I made it clear that I was being facetious to make a point.
The actual problem was not in the customer service group, but in the claims administration group.
The two groups reported to two different managers. The new manager of the admin group had put in very tight time frames for the administering of a claim and had thus been able to reduce staff.
Unfortunately the only way the administrators felt they could meet the standards was by taking short cuts which resulted in a significant increase in errors. This wasn't a problem because the Customer Service Group would handle the errors.
As you can see the measurement system was rewarding the shoddy work done in the claims area.
Without going into all the details, the way we fixed the problem was by creating a learning organization that analyzed and categorized claim administration problems and then tracked them back to the administrator that handled the claim.
We then built training programs and IT programs to improve the quality.
The customer service group became the hub of creating this leaning organization. Product quality went up, overall cost went down, and the real speed in process handling also went down. But most important quality of work life improved.
This kind of positive solution seemed impossible to achieve with another of our clients and it took years to finally drive the desired change. The problem was we couldn't change how the marketing people were rewarded.
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