Paradigm Switch Consulting Ltd

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The better way starts from a different point of view

While we have learned to think of our organisations as top-down hierarchies, they don’t look like that to our customers. If you assume (as I do) that the purpose of any organisation is to get and keep customers, to take the customers’ view of an organisation leads to a different and more productive set of problems to address. When you look ‘outside-in’, you always find out how unproductive your organisation is. What accounts for this, sometimes alarming, damage to productivity? The way the organisation is designed and managed. Because, for example, measures are related to functions and managers of those functions need to meet targets, the parts achieve their goals at the expense of the whole.

Managers know this. They often give graphic accounts of the ingenuity they use to ‘win’ while others ‘lose’. Even this obvious madness does not encourage managers to question whether there is a better way in part because to question the status quo is itself a dangerous thing to do. But if we are to gain a quantum leap in performance in UK organisations, we must learn about the better way.

While we might think of work as being managed and controlled through functional hierarchies and their associated measures, in practice work ‘flows’ through an organisation. If functional design and measurement can impede flow – which it always does – learning to manage flow will improve performance. The first step to managing flow is to think of your organisation as responding to customer demands. Think of it this way: if your organisation responds to a customer demand by doing what the customer wants and no more, your service will improve and your costs will fall. If Toyota’s Lexus line can respond to a customer demand by making a car in a week it ought not be beyond the realms of possibility for any organisation to do likewise. If your organisation produces goods that are less complex than a car and, bear in mind, many service organisations ‘make’ nothing at all, the gains from this way of thinking can be achieved in a very short time.

Paradox…good service always results in lower costs. Traditionally-minded managers don’t believe this, they think service and cost always need to be balanced.

If you are going to manage flow, you need measures that tell you about how well your flows work. These are capability measures. They should always be derived from what matters to your customers and they will tell you what you are predictably achieving for good or ill. This is to change management’s attention away from ‘costs’ and instead to focus on the causes of costs. And as managers learn to eradicate the causes of costs what do you suppose happens to costs? It is self-evident.

How many managers proclaim their people to be their most important asset, yet design and manage the work their people do in ways that cause demoralisation? The answer is most. In traditionally designed organisations the managers see their role as managing people. The managers fail to recognise that their ‘people problems’ are, in fact caused by the way the work is designed and managed.

Paradox… standards are anathema to performance improvement. Working with standards focuses attention on achievement of standards. Working with capability results in learning about ‘how high we can go’.

When an organisation’s workers are judged by their managers on achievement of standards or targets, and, as is always the case in traditional thinking, their performance is governed more by their system than anything they can do, the workers become demoralised. By contrast, when workers have measures in THEIR hands that relate to purpose, and they have the freedom to experiment with method, they become tuned in and turned on. In short, changing the design and management of the work mobilises the people – it removes the causes of workers being disenfranchised.

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

Managers foolishly pursue the ‘engagement’ of their workers by employing ‘employee participation’ programmes. The better way to engage employees is to change the role of management. When managers learn to manage by acting on the system, they naturally engage their workers – who know what is going on – in improving the system. And this is the heart of the better way. The better way of thinking is to understand and manage your organisation as a system, to understand how the parts work together to achieve the aim. The final paradox is that this is the starting place for improving your productivity – to understand your current organisation as a system, for it IS a system, regardless of how you currently manage it.

This is an excerpt from a fuller paper titled ‘fit for the future’. Email info@pardigmswitch.com for a FREE copy of the paper which provides a detailed guide and means for self assessment.