Tag Archives: management paradox

Management Infatuation . . . The Large Project

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 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Eating Our Own Dog Food

I spoke to a couple of auto industry engineers while flying not long ago.  They lamented about all the outsourcing that the auto industry has done.  Mexico, China, South Korea and many other countries all make the products that the US used to make.

The Big Three (Ford, GM and Chrysler) were on their heels since the 1970s.  Japan still owns the auto industry market, but their slip ups have given competitors a window of opportunity.  American manufacturing management is still in their stupid phase since the 70s.  Chrysler was beginning to be feared before selling to Daimler.  GM has wasted billions and the jury is till out.  Ford seems to be in the best shape . . . today.  However, Fords products either need greater improvement or the likes of Toyota to keep stepping on themselves.

My engineer friends see the waste everyday.  They are powerless over command and control management or better labeled the management factory.  Management’s job is to make decisions based on financials, not what makes sense.  Too many former engineers brain-washed into the management factory.  The financials override evidence.

W. Edwards Deming used to talk about our biggest export to Japan being scrap metal and they would buy this for pennies and turn it into a microphone and sell it back to the US for $50.  Japan knew how to create value.  American management outsources instead of using US labor to create value.  China’s dog food must taste better . . . it is cheap.

This is not a patriotic tale.  What American management misses is total system costs.  In manufacturing its in shipping and other costs that add costs that get lost in translation.

In service, it is the service design of the work.  Total systems costs are not realized in most outsourcing arrangements.  No one questions whether we need a back office or another call center.  In most cases I find that back offices can be designed out.  Contact centers are full of failure demand that when reduced gives the contact center fewer calls.

China owns a lot of  US debt.  To be honest if the US economy has problems they lose a big customer.  However, they are selling products to the US and taking wealth away.  American management has to wake up at some point that this whole outsourcing thing is not creating long term profit.  Again, not because we need to be better patriots, but because we have to open our eyes to total system costs.  A management paradox  . . . yes, but our own dog food may just save us.

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 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Simplify, Standardize and Centralize – The Mantra of Fools

Industrialized service design in government and service industry continues to drag us all down.  Government and service companies with higher costs and customers with poor service and higher prices – somebody has to pay for the waste and sub-optimization.

Technology vendors make a ton of money selling their wares with the cover of simplify, standardize and centralize.  They will show you ROI on a PowerPoint but you can rarely find evidence that the TOTAL economic system has been improved.  Hype via marketing is a much stronger tool because in that world you can make up all kinds of stuff and not get challenged.  We (technology vendors) are making lots of money, it must be good!

In service, variety is the enemy.  Standardization fits the industrialized mindset.  But variety of demand is inescapable.  A counter-intuitive truth that remains foreign to government and service companies.

Technology is much cheaper to deploy when there is standardization.  The key word is deploy meaning code and sell.  The wrong questions get asked and the technology factory spits out more and more worthless software.

Centralization is all about getting economies of scale.  However economies are in flow, not scale.  Good flow of services involves an organizational design that is devoid of non-sensical functional separation of work.

Ultimately, making good decisions about technology comes down to knowledge and evidence.  The fools will make assumptions without evidence.

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 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Compliance is a Poor Substitute for Responsibility

My recent Quality Digest article (A Three-Word Phrase that Destroys Service Systems) alluded to the problems of inspection, audit and other activities that seek compliance.  They destroy service while pushing out responsibility.  For the audit and inspection mindset there is trouble lurking behind every corner.

Too often people doing the real work are forced into doing things that must be done for compliance even when they make little sense for what they do.  You hear the workers say “we have to do this to comply with audit” and grudgingly move on.  The auditor smiles and puts a check on the list and off to commit more evil.  Some workers go back to doing what makes sense to them as they know the work and issues better than the infrequent auditor or they may continue to do what they have been badgered to do to survive.

Management wants control and inspection/compliance seem to fit this mindset.  This kills responsibility and costs alot to deliver.  Instead, managers should just say we don’t trust people and we are willing to put employees we don’t trust in front of customers . . . they are cheap ya’ know.  Do not worry, these people management doesn’t trust are being heavily watched by the inspection police so we have you covered.  Don’t worry about the cost, we have your back.

The management mindset is filled with control that increases costs.  Seek compliance, not responsibility is the mantra.  Customers do mind paying more for all this compliance.  Don’t put a shmuck in front of a customer that you don’t trust and for heaven’s sake don’t make them pay for the poor system design that delivers pathetic service.

95% of your organization’s problems are down to the system, not the individual.  This presents a management paradox and a different approach to business and government improvement.  The system you put workers in dictating performance.  You can trust workers if you give them a good system to work in, if the system is poorly designed waste begets waste and compliance and inspection have to sort out the “cheaters.”

Responsibility needs to be designed in and much of the inspection and audit (especially that dictate system design) needs to be designed out.  Indeed compliance is a poor substitute for responsibility.

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 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Tripp Babbitt’s Blog Down for 5 Days – Why Remains a Mystery

Much to my chagrin, my blog has been down for five days.  That is five, count’em frustrating days.  I wasn’t notified by my hosting company (ProVim).  There were no phone calls and no emails, yet, they claim to have attempted to contact me.  I worked furiously through the weekend to find answers and only found more frustration.

I did find that my website was being hosted by theplanet.com when I searched whois.  They are now called Softlayer.com and ProVim the third party.  In a chat session to Softlayer (a contradiction in customer service terms) refused to help me based on legal grounds.  They wouldn’t even contact the third party (ProVim) to help resolve the issue. I abhor service companies that can’t provide service or won’t do everything possible to help solve an issue.  This thinking is selfish, I would never do business with Softlayer.com – they look inside out from their perspective and not outside-in from the customer’s perspective.

As for ProVim, they are a small company and growing by acquisition by what I read.  They are acting like a big company meaning it is hard for customer’s to get answers.  More bureaucracy, they had to open a ticket number to resolve my issue – my issue was labeled “medium.”  Sounds like how someone might order chicken wings then representative of my problem from my perspective – and that perspective would be a customer’s perspective.

Ultimately, I had to rely on the good ol’ boy network to apply pressure . . . are we really in the new millenium?  After a bogus attempt to resolve my issue by an executive, someone with knowledge actually understood the problem and resolved it.  So, five days of frustration ends with someone with knowledge to solve the problem.

A lesson to all of us that value is created on the front-line in the eyes of the customer.  We don’t care about balance sheets and income statements and especially we don’t like our problems labeled “low” or “medium.”  We care about our lives not yours and we hate IVRs, ticket systems and unanswered phone calls.  Try designing a system that serves us and not you.  Revenue and business improvement result and you won’t have to buy businesses to grow.  The management paradox is that customers are dying to do business with organizations that sollve their problems and not those that worry about their own.

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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Counter-Intuitive ROI

ROI is often asked for by management to justify investments in technology or other investments.  Dead trees and time to present such mandatory reviews waste more resources then the alleged returns that organizations actually get . . . this means more hot air and manure than actual benefit.

Beautiful presentation . . . but most of these “dog and pony” shows have so little knowledge contained within them.  The only ROI really gained is to the vendor and not the customer of such efforts.

ROI comes from doing things that customers value.  This requires experimentation with method to deliver service, some of this requires technology – no doubt.  However, there is opportunity just in the design of the work and too many times technology gets in the way.

Instead massive plans and PowerPoints are put together to PROVE that ROI can be achieved.  Proof without evidence is the result.  Rarely, is a knowledge present or an experiment done that actually shows the change of method leads to ROI.

Baffle them with BS, rather than dazzle them with brilliance.

Embracing work and those that do the work that customers value just isn’t cool . . . but it is profitable.  In fact, it is extremely profitable.  The problem is that this thinking represents a management paradox to our current mindset about business improvement.  In the end it is a much better to ROI.

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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The Problem with Budgets

Headline:  Iran Attacks USA, but No Budget to Fight Back

News at 11 . . .

Well.  That headline would get some attention.  Robert Gates claimed that he can’t fight two wars on the budget he was given.  Whether to fight two wars or not is the right thing to do is not the question I am addressing here.  The question is whether the budget should dictate what we should do.

Needless to say, I am against all this focus on budgets.  Because when we talk about budgets, we are talking about costs.  Politicians are notorious for trying to reduce costs, but they wind up increasing them.  Sometimes because of ideology and sometimes because they just hack away without knowledge of the systems they tamper with

. . . and this is the management paradox.

I am all for spending less, but in the words of W. Edwards Deming, “By what method?”  There is no way that by congress or law that we have any chance to reduce spending without knowledge of where the waste is in  any system.

Take a view that if we cut costs to eliminate our ability to fix potholes that their would be loss to the system.  Cars with flat tires and people would complain . . . a lot.

The question becomes where to cut and that can only come with knowledge of what we are doing today.  Not a line item on a budget.  This is true for both business and government.

“Reduce expenses by 9%” to meet the budget is as stupid as the removal of the wrong arm in surgery.  Managers have to be better and smarter than that to succeed.  Executives with such mandates should tarred and feathered in public for offering up such ridiculous solutions to their problems.

Management needs to understand the dysfunction that is caused by the setting of targets with budgets.  Does it get people’s attention . . . absolutely.  Cut travel, cut unnecessary expenses, but what is unnecessary?  Somebody is traveling for a reason.

It should be called “Corporate Stupidness.”  As I have often seen managers saddled with such expectations wait for the “stupid period” to end, so they can get back to doing their real jobs.

All this caused by an arbitrary number that someone committed to during that investment call.  This is just good business . . . except it is not.  It is short-term thinking at its worse.  Driving value out and expenses in over the long-term.

Budgets have long become obsolete, just when will managers discover their carnage?

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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Home Depot’s Service Lesson

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This isn’t new news, but provides an important lesson of the failure of six sigma during Bob Nardelli’s tenure as CEO of Home Depot.  Like so many fads trying to find their way to achieve business improvement, this manufacturing initiated one is so yesterday.  The problem is the mass-production, industrialized mindset that spills over into service.

Facts may be friendly, but not in a system that promotes manipulation to achieve the carrot or avoid the stick.  Facts become secondary in these systems.  Numbers just become white lies or damned lies . . . not facts.

As a reformed Lean Six Sigma Master Black Belt, I found the method too elitist or internally-focused to be effective in service.  Not to mention that manufacturing and service have altogether different problems.

Six sigma’s project focus is all about reducing costs.  The management paradox being that focusing on costs always increases them.  Too often they wind up sub-optimizing through these projects by reducing costs in one area, but increasing in another.  In a six sigma environment, reducing costs is the aim.

Although six sigma practitioners talk about the customer, most are too busy achieving savings.  “The heck with the customer, I have to show money saved.”  In service, the customer is the key.  Services engaging in organizational change management devoid of studying customer purpose and demand, do so at their own peril.

People would be correct in assessing that the failure of six sigma is  a management problem.  But they have to realize that their is nothing to address these management problems in six sigma.  Not addressing the fundamental thinking problems about the design and management of work leave us with more waste, costs and a demoralized culture.

When management continues its command and control ways, nothing will change for the better.  Management has to play and change too.

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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The Executive Glass Floor

It’s a little early for football, but I always can remember a game or two where the team leading goes into a prevent defense.  The commentators predictably comment that a prevent defense will prevent you from winning.

Business is different than football in many different ways.  An important one being that aim of business is not to win, but to make money.  This is often lost in the conversation with executives especially ex-athletes carrying over their glory years and yearn for the competition of business.  Aggressiveness without knowledge is a dangerous thing.

Yet, when it comes to making profit most management types look to protect their position within the company.  You hear words like, “Don’t make waves” or “That is too risky” or “Protect the bottom line.”  These are all ways of playing prevent defense in business.  Accountants and risk types can point behind trouble at every corner.  Sensational headlines each day lead to adding expense to protect profit.

Instead profit is diminished as more and more infrastructure is added for protection of more an executive’s position than their profit.  The things they do to protect by watching financials daily and setting targets do nothing but add expense.  The real work is buried amongst a meaningless pile of management reports.

The end game is always surprise when executives realize that the management reports have betrayed them.  “This isn’t what the reports were saying” . . .  exactly the problem.  Meeting internal and external SLAs (service level agreements) is never a good way to manage.

Rarely, do I find that service systems report what is happening accurately.  Instead, they report “what matters.”  And in too many cases this leads to manipulation because “what matters” is what the boss says is important or is rewarded through incentives.  Hit those targets and you get a prize.

C’est la vie.

The management paradox is that this form of “prevent defense” prevents you from profits.  It is a huge thinking problem for executives.  The answer is seeing for yourself the damage, don’t believe me.  Hierarchy and not seeing installs a glass floor.  “Me, in the work? Don’t you know who I am? I do NOT go there.”

Huge profits await those that are willing to shake the hierarchy they have embraced in favor of a more knowledgeable approach.  Seeing is believing and it will save a fortune on your technology spend for data mining and analytics.

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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Designing Your Service Organization for Profit

Maximizing shareholder wealth has long been stated as the objective for business learned in MBA programs.  To achieve this there must be profit.  The question is always, “By what method?”

Target and financially driven organizations seem to want to achieve profit, but their method of doing it is in question.  The method deployed by investment bankers is to buy and sell whole organizations to achieve profit.  A short-term focus misses whether there is any real value gained in these transactions . . . most of the time not.

Inside organizations we have armies of accountants and management to oversee profit.  These positions create no value in the eyes of the customer.  However, they dictate the design of the system.  Both groups make costly assumptions about how to achieve profit.

The fixation is always on costs.  This had led to a weakening of the operational areas that can actually produce value in the eyes of the customer.  Outsourcing, technology, shared services, cutting budgets and other mindless strategies do nothing but provide immediate relief at best.  Longer term effects are that they kill what customers like in organizations.

The result of bad method based in assumptions around cost cutting activities have a profound effect on customer loyalty.  When service declines customers search for better options or call to complain (and there are real costs associated with complaints and dealing with failure demand).  These costs are hard to see for bean counters as they are not visible.  They focus on headcount and not flow missing the biggest opportunity to both increase revenue and decrease costs.

Management has become more budget focused.  They are given a budget, a target and an incentive.  “No go out there and win one for the Gipper.”  All the focus becomes these three things.  Ask them how to produce value for a customer and they have no idea . . . they have not been programed that way.  Thousands of management reports, but few managers have knowledge or context of the work.  It is pathetic.

I recently was told of a manager who was passed over for a position because they had too much knowledge of the work and not visionary enough.  How can you provide vision without knowledge?  The two are inextricably tied.

The greatest opportunity you have to improve service is the design and management of the work.  But not using the methods management use today.  The management paradox is that to get business improvement you need to design systems that enable the customer to get what they want.  Designing the system outside-in as a system, not inside-out based on assumptions, target, budgets and incentives.  The result is dramatic improvement to profit.

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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