The No Tool Zone

The call for a “plan” to deal with issues like taxes, immigration, budget deficits, social security, medicaid and other weighty issues is staple to the political season.  The real deficit is not the plans, but the knowledge that they lack.

By November 23rd, a select group of Republicans and Democrats must come up with a Deficit Reduction Plan or automatic cuts go into effect.  The Joint Select Committee on Deficit Reduction needs to come up with legislation without knowledge.

I am absolutely for reducing the deficit, the question becomes, “By what method?”

Legislators putting together plans or legislation to reduce spending without first understanding the what and why of current performance stand to increase costs.  Across the board cuts is bad enough, but recommendations from a panel without intimate knowledge of what they are doing is even worse.  It is the reason that legislators should stay out of government management.

Whether you are in the Tea Party or Occupy Wall Street you are on the same continuum of dissatisfaction of the way things are going.  Some say government should disappear and others say government should do everything.  Each are extremes of a polarized political system.

Political ideology needs to be replaced with evidence that comes from knowledge.  Too many expensive solutions are being implemented that don’t deliver anything but more costs.

Compromise is not going to happen with the extremes of the political parties. But even if it did, we would get a negotiated solution rather than one that makes sense.

We do not need a plan or another committee of “bipartisan participants.”  This is a waste of time and resources.  We need to get knowledge, redesign government services and design out non-value adding agencies like the Department of Education.

It all starts with one question, “By what method?”

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

As the political season heats up, so does the call for “pay for performance.”  The assumption here is that it works . . . and yes, to some degree it does.  Unfortunately, it works in a manner that actually diminishes and destroys service.

Performance is dictated by the system in which you work.  This is true for front-line workers and executives.

I have often quoted W. Edwards Deming and written about the 95/5 Rule.  95% of the performance of any organization is dependent upon how well your system is set-up, and only 5% is down to the individual/  The system is comprised of processes, work design, management thinking, measures, roles and any other element that exists.

It is true that pay drives individual performance.  However, this takes away from the focus on the customer.  Organizations that are functionally separated try to give managers individual pieces of the organization to optimize which results in sub-optimization.  Sub-optimization is the enemy of synthesizing the whole – creating waste and inefficiency.

Individual pay for performance creates competition between workers where cooperation needs to exist to improve any system.  Further, individuals learn to manipulate the system to survive or gain reward.  What this boils down to is that the system loses when pay is tied to performance.

I have seen organizations go out of business while everyone is still getting bonuses for performance.  How can this be?  Some claim it is just the wrong measures and miss the point.  The problem is that pay is tied to performance in the first place.

Improving performance requires redesigning our organizations be they governments or private companies.  Working on the 5% is just dumb and wastes what little time we have already.  This requires a shift in Western mindsets about how we think about work.  It wouldn’t hurt to have governments start to learn this with teachers, police officers and other government jobs.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

I still consider myself neutral because the on-going war between Democrats and Republicans is counter-productive.  Although, I am happy to report that many of the Republican presidential candidates have proposed that they would shut down the US Department of Education.

Why stop at the stop at the Federal level?

I first proposed last summer that the Indiana Department of Education should shut down.

It only makes sense to start putting our investment in those that can create value (teachers) and less spend on those that shovel costly policies and programs into the schools.  Less management and more teaching is a wonderful formula for hiring more teachers and reducing the burgeoning deficit.

Democrats should like this too.  So long as we hire more teachers and not waste more money on non-sense that is needed in the classroom.  We spend $77.4 billion dollars on the US Department of Education.  Think about that $1.5 billion for every State.

But wait a minute . . .

We can save even more by shutting down every State Department of Education and have more money to spend in the classroom.  We could save and improve education and send the bureaucrats packing to either teach or find a value creating  job.  Pay teachers more and reduce the deficit – something for everyone . . . Democrat or Republican.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

What is it about large projects that is so attractive?

Is it the ability to put a large project on a resume?  Or the feeling of power to have introduced massive change?  It is hard to figure out the answer to this management paradox.  Maybe there isn’t one.

Service organizations and governments love the large project.  A lot of them involve information technology, but these projects certainly aren’t just IT.  IT just seems a good way to fund it.  No one will argue with large projects that are the future.

However, large projects seem to fail at unbelievable rates.  In fact, I am yet to see a successful one.  All have begun with great pomp and circumstance.  Executive speeches given, resources allocate, Gantt charts populated on hundreds of pages and the master plan is unveiled.

Two months later and the ADD management has usually already lost interest.  Funding for other things is poured into the financials of the projects.  Large projects do represent a great way to hide costs.  Our software developers put in 500 hours last month into your project . . . and you got one line of code – if you are lucky.

These days I remain amused by those that promote their company or themselves as large-scale project managers with years of working on large projects.  All that experience that has delivered so very little in tangible improvement.

The problem is really quite simple, the need was never really there to do a large project.  Egos and assumptions play a larger role in these decisions than need.  The truth is that most of the time value can be created by small changes on the front-line.  It just isn’t as glamorous.

Before the next big project kicks off, take a couple of deep breadths and do the following:

1. Get knowledge – leave the egos and assumptions behind
2. Improve the work and pull IT

There are more to these steps, but if you are reflective on this you will discover a much better way than big projects.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

The cheating continues for those with incentive programs to get higher scores when testing students.  I hate to say I told you so . . . but I told you so.  Tying test scores to performance opens the door to cheating, people will do what they need to survive in  a bad system.  Administrators and teachers alike are doing the best they can in these poorly conceived systems of education.

My home state, Indiana, just pushed through education (without knowledge) to tie teachers pay and performance to test scores.  Governor Daniels and State Superintendent Tony Bennett, here is the predictable result that you have set up by the system you just put in place.  Political ideology over knowledge creates bad systems.  With great irony . . . ignorance reigns over education.

The response of government will be more oversight to find the criminals, and therefore, more cost to implement these programs.  Here is why we have overspending in government.  A cycle of damaging legislation without knowledge and then costly oversight to find cheaters.  While the “high ethic” Governors can wash their hands of responsibility believing that just a few bad apples are the problem.  NO!  The problem is the ridiculous system you just put in place.

Performance doesn’t come down to the individual, it comes down to the system they work in.  This is true for teachers, workers, management, administrators and yes . . . even a Governor.  If we are going to stamp out costs and balance the budget at the state, federal or local level there needs to be less ignorance and more knowledge about what drives performance.

We have started this country down a worse path in education because of wrong theories.  Education will be the only way out, but we need theories that work.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

I read an article today in Quality Digest about Dr. Don Wheeler (An Interview with Donald J. Wheeler).  I had the pleasure of getting a solid back ground in SPC from Dr. Wheeler and from a local (Indianapolis) statistician named Tim Baer.  I won’t pretend to have their knowledge, but through application of statistical theory I have learned that there is no other way to know whether improvement efforts or experimentation are making things better.

W. Edwards Deming challenged us in many ways.  He warned us not to copy the Japanese (because we could never catch up).  The perpetuation of Dr. Deming’s ideas requires a solid understanding of statistical methods.  Rarely, do I walk into a service organization and see the use of control charts (or process behavior charts as Dr. Wheeler references them).

The truth is there is no way to know whether things are getting better without the use of SPC.

That is correct – there is no other way!  So this begs the question of why their use is so uncommon amongst those that mine, analyze and use data.  If they did they would understand why targets are so damaging.  Or why the system governs performance and not the individual.  These are things you come to understand when you understand variation through the use of SPC.  My Myth Buster series at IQPC explains why – click here.

To me, operating without solid knowledge of SPC is a mistake that is very costly.  An organization trying to achieve business improvement must know when things are betting better or falling apart.  Sometimes you find out that things are worse when it is too late.  This requires an early warning system for a business tsunami that can wipe you out.

Using data in appropriate manner is hard to find these days in service organizations.  SPC is the only tool worth learning.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

I recently read an article by one of the management fad proponents that even though they used tools they were a systemic thinker.  Further review and reading determined they provided no evidence of systemic thinking in the work they had done.  Where is the evidence?  None existed.

The use of tools offers problems I have written about before.  I wrote about it in my recent Quality Digest column – Are You a Sheet or Shelf Thinker? Tools limit thinking and create a barrier to systemic and breakthrough thinking.

Systems thinking (and more specifically, the Vanguard Method) is about method and innovation.  It addresses the management thinking that has to be challenged because of the assumptions that lead service organizations in the wrong direction.  The functional separation of work, targets, financials, hierarchy, technology, information are but a small sample of items that need to be challenged.

So, part of systems thinking is about addressing not just the design, but the management of the work.  Management thinking drives the design.  The management fads claim to do this too, but look for the evidence . . . lots of hat, but no cattle.  Pathetic and misleading.

Managers have a choice too, they can pick assumptions or knowledge.  Knowledge requires context to all those management reports with meaningless data.  One can only get that in the work.

Toolhead activities support status quo in management.  Most don’t know better, but many believe that someday if they see the benefit of tools management will buy-in over time.  The benefit never comes in sufficient quantity to convince management and management relegates the improvement fads to lower and middle management or the front-line.  A dead-end for sure.

Unless efforts to optimize systems include management . . . it is better not to start.  Systems thinking includes everyone and everything, not just the elitist or toolheads wreaking havoc on the systems.  This is not business improvement, it is more waste and sub-optimization in the system.

Good video of former toolheads that have found a better way:

I used to be a toolhead but I am alright now (short video 4 mins) from The Systems Thinking Review on Vimeo.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Shocked . . . not really.  Irregularities in the DC education system may or may not have happened.  The predictability of tampering in a system that bases salary and rewards for teachers on test scores is asking for trouble.  The education system will bend to the way we design them.

Michelle Rhee is no hero.  In fact the likes of Indiana State Superintendent Tony Bennett, Governor Mitch Daniels and Education Secretary Arne Duncan are making things worse for education.  Not just a little, but a lot.  This doesn’t mean that they aren’t well-intended they just lack knowledge on how to optimize systems.

Merit pay or salary based on achievement will lead to tampering with test scores in a number of fashions.  National and state budgets will now have to add more inspection and monitoring fees to oversee tests to escape the inevitable teaching to tests and erasing of answers.

When the purpose of teaching becomes a test score, you will get people’s attention.  But does anyone in business take a multiple choice test with a number 2 pencil?  Hardly, and we are digging a grave for achievement by doing more of the wrong thing.  Teaching kids to learn, not take tests, should be our aim.

Teachers need to work in a system that enables them.  They are closest to the work and knowledgeable about what is happening in the classroom.  They are not to be persecuted by politicians and administrators but embraced as potential answers to the problems we face in education.

Clueless business executives turned politicians are perpetuating a bad system in the design and management of our education system.  Let’s get rid of the assumptions that surround this design.  Merit pay is a design flaw.  I wrote about this in an article for IQPC called Better Thinking:  The Case Against Targets, Incentives, Rewards, Performance Appraisals and Ranking Workers.

Merit pay and pay for performance will change behavior, but not in a positive way.  The result is a focus on test scores . . . not learning.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Harvard, the master of all things business, status quo and losing touch with reality in its MBA program, is making a shift.  The shift is to revamp the curriculum in the wake of the financial crisis.  The elitists even recognize the pendulum has swung too far, so the response is predictable . . . we now needs ethics.

This discussion can get into religion and politics which is a road to nowhere.  Even the most ethical base their decisions on faulty theory.  Rewards and incentives drive behavior, but too often the wrong behavior.  I have seen owners and presidents of Fortune 500 organizations turn a blind eye to dysfunctional activity and then blame an individual for gaming the system to get a reward.

Who is responsible for that system that encourages cheating and damaging behavior?

The same executive and owner that promotes the bonuses and boondoggles to their staff.  What did you expect?  The employee to say, “No, no bonus for me this year.”

Ethical by design should be our aim.  Building systems that accommodate doing the right thing.  When our focus is on targets that become the defacto purpose of our work, we risk everything.

However, when our focus is on the customer there doesn’t have to be bad behavior.  Think about it, no laws to pass to protect the consumer and no outcomes that damage the economy.  The paradox is that focus on the customer actually creates more profit.  It’s all the junk we are forced to do to mitigate risk that creates costs.

Designing our systems outside-in with the focus on the customer creates more profit, less need for regulation and happier customers.  We are saved from enduring educational institutions that have to walk the tightrope of ethics classes.

Join me for the International Deming Conference in New York City on March 21 – 22.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Over the weekend, I was preparing my paper for the International Deming Conference in March.  I decided to look at some videos of W. Edwards Deming on YouTube and other assorted mediums. Having attended Dr. Deming’s 4-day seminar I felt the familiar pull of a lost message about American management and that the Western style of management needs to change.  That was in 1984 . . . and not much has changed.

Dr. Deming in one video outlined the 5 Deadly Diseases of Management.  They are:

1. Constancy of Purpose
2. Emphasis on Short-Term Profits and Thinking
3. Annual Rating of Performance/ Merit Pay
4. Mobility of Management
5. Use of Visible Figures Alone

All of these things Dr. Deming warned us about in 1984 are present in almost all American businesses and government today.  The banking crisis we are finally emerging from in the emphasis of banks to seek larger and larger profits to achieve targets.  Short-term thinking isn’t just accepted, it is encouraged.

The problems with mobility of management are rooted in the lack of knowledge that management has about the systems in which they manage.  Many lack the basic knowledge of their systems and manage based on common sense.  But common sense can only be achieved by having knowledge from being in the work understanding it – outside-in as a system from a customers point of view.  Anything less is leads to waste and sub-optimization.

The financial targets in American business are highly visible to anyone who manages and in government the focus on visible costs.  A shame that very few can answer a simple question like, “what measures matter to customers?”  Most will say, “oh yeah, that too”, but have no idea from their functional perch.

And so we live with high unemployment that is firmly rooted in bad management.  Education is a top priority in the US and many states to help America become more competitive.  A noble aim, but our problem is not just education . . . it is the wrong management theories being taught that deepen our plight.

Join me for the International Deming Conference in New York City on March 21 – 22.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.