The No Tool Zone

W. Edwards Deming asked us to reinvent management years ago, but instead we have been met with change programs focused on processes and workers.  Often I find myself at odds with lean six sigma folks that swear they are really about improvement but what they write or speak about is more tools, standardization and other strategies that do little to address the management problems that need to take hold to have improvement that is sustainable as well as profound.  All these efforts (although well-intended) ignore the fact that management must come to the table to change too.

Instead we have change programs that compromise the needed management change.  Too few challenge conventional management thinking in favor of “just getting some business.”  Some improvement dreamers hold out hope that if they show management tools at work magical change will happen.  Unfortunately, once you start down the process and/or tool path changing thinking goes out the window.

In an ideal world, we would have any improvement initiative not beginning with tools and addressing the management thinking problems first.  Every organization’s management team would know that if improvement is to occur that they must change too.  Instead we wind up with management believing they can skate while the tools and process improvement fix things.

Each time I see the wrong path taken, I know how much harder it will be to get management to accept the fact that they have to change too.  So, making lean six sigma folks upset goes with the territory as one systems thinker likens it to trying to save someone that doesn’t know they are in danger.  The tool and process people do not see it this way as they see something is better than nothing.

So what has to change in management?  A move from command and control to a systems thinking approach to management.  These are not always easy changes as many are embedded in management thinking through years of a repeated use. But what we find is the faster management puts better thinking in place improvement is usually immediate. 

However, years of building these complex structures in command and control can slow the improvement down.  With great irony, management that wants improvement fast sometimes gets in the way of immediate improvement.

Improvement can not continue to become less, it needs to become more.  This can only happen when fundamental management thinking changes.  A tougher path?  Absolutely, but one that can lead to dramatic and sustainable improvement.

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Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Tripp Babbitt is a columist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

John Seddon and my Vanguard partners have written a very important white paper on economies of scale titled Why do we believe in economy of scale?    If management is to change thinking, here is a great place to start.  The mass-production, economy of scale thinking has outlived its usefulness.

This paper challenges the assumptions around our management thinking from costs to the causes of costs.  The leap from economies of scale and the design of work that is resultant from it is destroying value and creating waste.  Economies of flow are driving both work design and management thinking.

I am commited to finding ways for service organizations and government to understand the impact of this thinking in improving profits and reducing costs.  This paper is lengthy, but should be reviewed and digested several times as its significance is unequivocal. 

I am writing in both columns (Quality Digest and IQPC) about the importance of economies of flow.  Additonally, I am working on a speech to present to associations, government entities and service companies on this topic.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

Tripp Babbitt is a columist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

Most executives don’t even like to broach the subject unless it involves the payout.  Some claim it is OK, because everybody does it.  Still others say it is the only way to motivate people or be profitable.  What is the subject . . .  incentives through rewards and bonuses.

Having worked with many service companies over 16+ years, I have seen many flavors of incentives.  But working with the Vanguard Method with its focus on customer has risen my awareness of the damage incentives cause.  Over and over again the same damage is done.

The incentive becomes the focus (or what John Seddon calls a defacto purpose and I call faux targets) of organizational and individual efforts.  This thinking works to reduce the value that customers seek from service organizations.  Service companies can not serve both themselves and the customer, there can only be one master.

In the US, we have seen the destruction of wealth by some in the banking industry that had the wrong focus.  The price these companies should have paid is death, but the bailout saved them.  Now many are back to the old “business as usual” with bonuses to keep the good people (good people needs a redefinition).

Break-fix companies like plumbing, HVAC, auto repair and others that I have worked with over the years believe that they could not achieved their success without such incentives.  However, visits to customers show that they are guarded about what they are being told as inconsistent advice is given, or worse, repairs or replacement is done when not needed.

Too many owners of break-fix organizations turn a blind-eye to the reality of the damage their incentives bring to customers.  Since most in any given industry prescribe to the same thinking that incentives are good, you rarely can find anyone doing anything different.  It is the norm . . . but a norm that needs to be challenged in the face of the evidence.

In the case of the banks, the whole world is the poorer for wrong focus.  For the rest, customers pay the price as bad service leaves them with software, furnaces, repairs that are not needed.  If it wasn’t so accepted by so many, most would see it as fraud or a scam . . . many of their customers do.

The one counter-intuitive point that I have learned is that when the customer is the focus of our organizations, costs fall and revenue increases.  Think about it . . . no monitoring for cheating, no HR and accounting spreadsheets to track and happier customers.  Marketing budgets are reduced as better service replaces the hope of better service.  Innovation increases as the service organization focuses on how to provide better service.

With incentives, we call into question the integrity of the organization in the customer eyes.  It is the last of the dirty little secrets.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Tripp Babbitt is a columist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

Only Tom Paine can better phrase the efforts to improve Indiana education as it has gone “from the ridiculous to the sublime.”  The State Department of Education has long lost its way in developing any thinking to improve anything.  Republicans originally didn’t even want national or state Departments of Education and they would be better off if they returned to this thinking.

These government run programs have provided us with nothing more than large budgets and information that has done little to improve education.  Most of the movement has been to set targets, add incentives, and push for higher scores on tests.  Nothing on improving method in the classroom to make our children more competitive internationally.  All results-oriented tracking and thinking that has little to do with education improvement.

The latest plan is using programs with more acronyms and less sense.  TAP is the latest catastrophe in the making.  The whole program is based on test scores matched against previous years to measure “improvement.”  The results will be predictable teachers teaching to the test to get the bonus and new methods being stifled.

The TAP program has bonuses comprised of 50% on principal evaluation, 30% on how students improve (on test scores) and 20% on how the whole school improves.  Evaluation by principals will become a popularity contest as evaluations are always subjective.  This will become a command and control manager’s dream . . . full of coercion and ability to make someone comply.

All these new programs will require scores of new monitoring and inspection to make sure people aren’t manipulating the system.  After all, money is involved.  Our bureaucratic government will grow and deficit widen. 

In education we are in need of valuing the work of the teachers interacting with students . . . this is where the real work is done.  Experimenting with method to teach children to become life-long learners and not regurgitating birds.

So for the true Republicans out there and possibly some tea party folks let’s propose that we eliminate the Indiana State Department of Education and put the money to work in our classrooms where the learning takes place.  Less administration, more money to attract would-be teachers that go to the private sector and a lot less intrusive government with failed programs.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

Tripp Babbitt is a columist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.  

Autonomation was originally written about by Taiichi Ohno where he discussed “automation with a human touch.”  This is a far different than the “let’s automate something because we have the technology to do it” approach. 

Unfortunately, while doing bank management consulting I observe poorly designed systems where technology has been layered on top of the system.  This leads to entrapping technology that locks in the waste of the design of the work.

Most of these designs were based on the functional separation of work and a mentality that includes eliminating people to reduce costs.  My observation has been that many banks reduced two tellers, but increased their technology spend by $200,000 annually.  The design of the work was at issue, not the teller or the technology.

More than one bank talked about how they had been able to centralize their operations into a back office in another  location through the power of technology.  But none were able to show me that this move had actually made things less expensive through this thinking.  Pride (of technology) was more important than practicality.

We don’t have fewer tellers or back office functions in banking because of this thinking.  Had banks taken Ohno’s advice to “automate with a human touch” technology may have a different and better role in banking or the service industry in general.  Instead, old assumptions about what makes a bank efficient are perpetuated.

Technology has its place in our world and can make our work easier and more productive, but we are in dire need of understanding that technology is to support people and not replace them.  This thinking will lead to better use of technology and workers.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Tripp Babbitt is a columist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.  

Over the holiday weekend I came a cross a LinkedIn discussion about the old maxim “If you can’t change the people . . . change the people.”  The discussion has quite a bit of activity – over 1100 comments.  Diverse views on getting people on-board with change programs or getting rid of the people.

I have long bought into the belief that the performance of any organization is 95% attributable to the system and only 5% the individual alone ( W. Edwards Deming).  Understanding variation and special/common causes helps with this thinking.   So to focus on the individual from the beginning is misguided.

It was A.P. Sloan that first taught us that decision-making is best separated from the work.  Leading to today’s organization where managers manage and workers work. 

Too many managers have so little understanding of the work they make decisions on.  This leaves workers with a bad taste for change.  No one likes change that makes things worse for them.  Coercion and rationalization are the only alternatives for these types of managers to convince workers.

As a systems thinker, I have found that change is best born from the work and not the manager.  Knowledge needs to be gained from the understanding of the work by managers and workers to make better decisions.  This is to allow change to be emergent from a joint understanding of the system.

By understanding the “what and why” of current performance organizations wipe out assumptions born from superstitous learning, anecdotal evidence and computer-generated reports.  This allows managers and workers to see the problems for themselves.

Changing people should be the last choice and not the first as the design and management of the work offers a greater opportunity to improve.  This requires different thinking than the top-down, command and control style deployed by organizations when making change.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

Tripp Babbitt is a columist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

One of the most innovative companies of our time is under fire by users of the new iPhone 4.  A recent article in Information Week titled Jobs Dismisses iPhone Complaints, Angers Users reported a backlash from the hyped-up users of Apple’s latest product.

Steve Jobs (Apple’s CEO) allegedly dismissed the feedback as rumors rather than fact.  He may or may not be in the best position to know the truth about the phone.  There is sure to be one way Mr. Jobs or anyone in his position can find out.

Going to the points of transaction where business is conducted.  If complaints are coming in from customerswe have what is called failure demand.  Failure demand eats away at revenue and profits as customers are put off and expenses to deal with failure demand increase.

What is mystifying to me is why CEOs either don’t know whether they have failure demand or deny knowledge if they do.  Are they trying to protect the company?  If so, if the problem is real it almost always comes back to haunt them in terms of even greater losses in customers and costs.

I don’t know if  the iPhone 4 has issues or not.  I do know that any CEO can find out by having an ear to the front-line and familiarizing themselves with failure demand.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

Tripp Babbitt is a columist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

Neil Shaw, head of BP’s Gulf of Mexico unit said the words not unique to the energy conglomerate.  As reported in the Wall Street Journal article Safety and Cost Drives Clashed as CEO Hayward Remade BP Mr. Shaw was quoted as saying early in 2009 that operating efficiency was “4% better than plan.”  A clear focus on budgets and financials that many managers have injected into their corporate psyche.

The preoccupation with budgets and financials rarely has a good ending.  Whole corporations mesmerized by what the numbers are running by day, week , month and year.  The questions being asked drive the dysfunction as corporations focus on how they compare to last year or to budget or some other arbitrary measure.

Performance targets with rewards reinforce and lock in this thinking.  The targets themselves become the purpose or aim of the organization.  John Seddon references this as the defacto purpose.

Too many times we see front-line workers shaking their heads as managers make unwise decisions based on balanced sheets and income statements.  Knowledge comes from the work, not the financials.

A better question to ask is “By what method?” will we achieve the results we seek.  If the method includes taking shortcuts the results are predictable as this promotes short-term thinking.

Mr. Shaw is not alone in his thinking, but the damage is undeniable.

What about safety targets?

BP had what seemed to be a plausible goal for a metric called “Total Recordable Incident Rate.”  This measured the total number of incidents resulting in injury or illness for every 200,000 hours worked.  The goal was .62 and BP was running .97.

It is hard to imagine an acceptable level of illness or injury as a target.  Perfection is the only target worth achieving.  What is the purpose of planning to have illness or injury?  Sure, we all want to know what we are running on such a measure, but to claim victory for achievement (had BP done so) of such a target is outrageous.

The bottom line is that targets are not helpful to management or the systems that are operating with them.  The only target worthwhile is perfection . . . even when it is not possible.  When it comes to safety, the never ending struggle to be perfect is the only quest worthwhile.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.