Policy Governance & Governance Philosophy
(Excellent article on the existing paradigm and the need for this to change)
Qualityworld
Freedom from command
Command and control management methods are no longer working. There is a better way to design and manage work - a better way to make the work work - but it remains unknown to the vast majority of managers. Management thinker John Seddon discusses the merits of system management and explains why he thinks it is the only way forward for modern management
There is a story of a Japanese guru working with a management board to improve their organisation's performance. He drew up a flip-chart list of recommendations and his top recommendation was that the board should resign. This got their attention. The point he wanted to make was that unless you change the way you think, your system will not change and its performance will not change.
What thinking needs to change?
We think of our organisations as top-down hierarchies. We separate decision-making from work, we expect managers to make decisions with measures like budgets, standards, targets, activity and so on. Managers are taught that their job is to manage people and budgets. In short, our organisational norms are based on command and control thinking. And we are in trouble.
The separation of decision-making from work, the cornerstone of command and control thinking, has its roots in Taylorism (scientific management). It was developed through the work of Ford (mass production) and Sloan (management by the numbers). Command and control methods solved problems for each of these management pioneers at the time, but we have not continued to learn. The basic precepts of command and control are not questioned, which is a problem of culture and management thinking (see figure 1).
Thinking -> System -> Performance
Figure 1: Thinking governs performance
The better way - a different logic
The better way is to manage an organisation as a system. It is a way of thinking about the design and management of work that is diametrically opposed to command and control thinking (see figure 2).
Figure 2: Command and control versus systems thinking
It was Taiichi Ohno of Toyota who first challenged the command and control conventions. He inspired others with his results. In research reported in The Machine That Changed The World he said: 'The number of man hours it takes to make a Lexus is less than the man hours used in re-working a top-of-the-line German luxury car at the end of the production line, after it has been made.' (Womack Roos and Jones: 1990)
It is incredible that this advance in management theory took place in one of the most complex organisational forms - motor manufacturing. Ohno discovered the need to solve the problem for service organisations. Command and control thinking has forged service organisations that offer poor service and carry high costs.
The thing about service…
Service organisations have one crucial difference from manufacturers - the inherent variety of demand. Customers make customer- shaped demands; if the system cannot absorb this variety, costs will rise. Taguchi demonstrated that any departure from the nominal value adds to costs. In service organisations the customer sets the nominal value. When this is understood and put into practice, comparable benefits can be achieved in much less time. While the Toyota system has achieved an outstanding level of performance in 50 years, service organisations can achieve significant improvements in 50 days.
With a systems view, it is easy to see the waste caused by the current organisational design, the opportunities for improvement and the means to realise them. In service centres in both the private and public sectors there are high levels of 'failure demand' (which I define as demand caused by a failure to do something or do something right for the customer). Managers are unaware as they are preoccupied with production. They know about the volumes of demand for service but they treat all demand as units of production.
Facing up to failure
When failure demand can run as high as 80 per cent of the total volume of customer demands, it is obvious that the best way to improve both service and costs is to eradicate it - for it is all under the organisation's control. To give a simple illustration: if you send out information that confuses customers and causes them to call you, it costs you more to provide the service. More importantly, the customers might not be too impressed.
But managers of service centres are preoccupied with a different problem: how many calls they will receive and how many people they need to field them. Ignorance of demand is just their first mistake. Their second is to assume they should hold their workers accountable for the calls they take. This is to be in complete ignorance of the fact that the major causes of variation in performance are in the system - the way the work works. These two mistakes have resulted in the demoralisation of many workforces. Holding the worker accountable when the system is to blame is the reason why call centres are sweatshops and why so many service operations are inadequate. Costs are high and service is poor.
Bespoke management
Taking a systems view always provides a compelling case for change. It leads managers to see the value of designing and managing work in a different way.
The systems approach is to design, in line with customer demand (the things customers want from you), instead of in functional hierarchies. Working according to demand removes any excess waste caused by the system. As waste is removed, capacity increases, costs decrease and there is more scope for growth. Measures and roles have to be changed. Managers 'act on the system' rather than managing people and budgets. In doing this, managers in different parts of the same organisation use completely different measures - telling them about achievement of purpose, capability, variation and the nature of demand and flow in the system.
The systems approach creates an adaptive organisation. As demand changes, people change what they do - something that is impossible to accomplish in a command and control design. It puts people where they belong: at the heart of enterprise.
Because it is such a fundamental shift in thinking, learning to take a systems view can only be achieved when managers see for themselves the dysfunctional consequences of their current philosophy. Such a change in norms is hard if not impossible to achieve in a meeting or the classroom. Managers have to change the way they behave, but they first have to be prepared to question their philosophy.
A change in philosophy
Taylorism is the management philosophy that underpins command and control thinking. Taylor believed that any worker must be trained by someone better educated than himself and that this trainer or expert should base his work on what he called the laws of science. This led to the belief that knowledge is associated with hierarchy and the creation of what I call the 'management factory' - the place where managers work to set specifications and controls (targets, procedures, standards, inspection and so on).
Today, the people who occupy the management factories in both the private and public sectors have moved away from Taylor's idea that their specifications should be based on a scientific approach. Instead many management specifications are based on no more than opinion. The management factory is a place where managers work with abstractions from the work, not knowledge of the work. The consequences are catastrophic. Call centre 'best practice' standards, balanced scorecard, the excellence model, best value and continuous performance assessment are some examples of a growing raft of specifications that contain either no theory or bad theory.
Target practice
In the public sector particularly there has been an unprecedented growth of the specifications and inspection industry. When he took over as chair of the Audit Commission, James Strachan noted that Britain has the most regulated public sector in Europe, but not the best performing. He openly admits targets are not working but his remedy is to simply have less.
Targets have brought dysfunctional behaviour that is both ubiquitous and systemic because the requirement to serve the hierarchy competes with the requirements to serve customers. Peoples' ingenuity is engaged in survival not improvement. It is now common knowledge that people 'cheat'. To blame the few, as government ministers do, is to be blind to what is really going on. Government ministers have adopted the tenets of command and control management in their pursuit of public sector improvement with disastrous unintended consequences. The cost of the associated bureaucracy is massive but even more important are the costs associated with the consequent poor service and demoralisation of public servants.
Decision-making or leaving your brain at the door?
Another problem is the lack of emphasis on knowledge. Taylor gave the world a systematic way of tackling method - how the work works. But he could not foresee that the way he did it would become a systemic weakness. He made the separation of decision-making from work the defining relationship between manager and worker. Today the consequence of separating decision- making from work is often described as 'leaving your brain at the door'.
Systems thinking represents a better logic for the design and management of work. At the heart of this logic is the integration of decision-making with work. Roles and measures change. With people at the heart of the enterprise, the consequence is a system's increased ability to absorb variety, which is essential to good service design. Management and worker roles alike are designed to improve understanding and control of the system.
The ethos changes from status to contribution. People have a sense of freedom: freedom to act, learn, experiment, challenge and build relationships with customers. Becoming a customer-driven learning system requires freedom, not command and control.
Biography
John Seddon is an occupational psychologist, consultant and management thinker. He is managing director of Vanguard Consulting. His work is a combination of systems thinking - how work works - and intervention theory - how to change it. He credits W Edwards Deming for explaining what is wrong with conventional (command and control) management thinking and Taiichi Ohno (who built the Toyota Production System) with introducing him to the practices and principles of systems thinking as applied to operational performance.
Qualityworld
Freedom from command
Command and control management methods are no longer working. There is a better way to design and manage work - a better way to make the work work - but it remains unknown to the vast majority of managers. Management thinker John Seddon discusses the merits of system management and explains why he thinks it is the only way forward for modern management
There is a story of a Japanese guru working with a management board to improve their organisation's performance. He drew up a flip-chart list of recommendations and his top recommendation was that the board should resign. This got their attention. The point he wanted to make was that unless you change the way you think, your system will not change and its performance will not change.
What thinking needs to change?
We think of our organisations as top-down hierarchies. We separate decision-making from work, we expect managers to make decisions with measures like budgets, standards, targets, activity and so on. Managers are taught that their job is to manage people and budgets. In short, our organisational norms are based on command and control thinking. And we are in trouble.
The separation of decision-making from work, the cornerstone of command and control thinking, has its roots in Taylorism (scientific management). It was developed through the work of Ford (mass production) and Sloan (management by the numbers). Command and control methods solved problems for each of these management pioneers at the time, but we have not continued to learn. The basic precepts of command and control are not questioned, which is a problem of culture and management thinking (see figure 1).
Thinking -> System -> Performance
Figure 1: Thinking governs performance
The better way - a different logic
The better way is to manage an organisation as a system. It is a way of thinking about the design and management of work that is diametrically opposed to command and control thinking (see figure 2).
Figure 2: Command and control versus systems thinking
It was Taiichi Ohno of Toyota who first challenged the command and control conventions. He inspired others with his results. In research reported in The Machine That Changed The World he said: 'The number of man hours it takes to make a Lexus is less than the man hours used in re-working a top-of-the-line German luxury car at the end of the production line, after it has been made.' (Womack Roos and Jones: 1990)
It is incredible that this advance in management theory took place in one of the most complex organisational forms - motor manufacturing. Ohno discovered the need to solve the problem for service organisations. Command and control thinking has forged service organisations that offer poor service and carry high costs.
The thing about service…
Service organisations have one crucial difference from manufacturers - the inherent variety of demand. Customers make customer- shaped demands; if the system cannot absorb this variety, costs will rise. Taguchi demonstrated that any departure from the nominal value adds to costs. In service organisations the customer sets the nominal value. When this is understood and put into practice, comparable benefits can be achieved in much less time. While the Toyota system has achieved an outstanding level of performance in 50 years, service organisations can achieve significant improvements in 50 days.
With a systems view, it is easy to see the waste caused by the current organisational design, the opportunities for improvement and the means to realise them. In service centres in both the private and public sectors there are high levels of 'failure demand' (which I define as demand caused by a failure to do something or do something right for the customer). Managers are unaware as they are preoccupied with production. They know about the volumes of demand for service but they treat all demand as units of production.
Facing up to failure
When failure demand can run as high as 80 per cent of the total volume of customer demands, it is obvious that the best way to improve both service and costs is to eradicate it - for it is all under the organisation's control. To give a simple illustration: if you send out information that confuses customers and causes them to call you, it costs you more to provide the service. More importantly, the customers might not be too impressed.
But managers of service centres are preoccupied with a different problem: how many calls they will receive and how many people they need to field them. Ignorance of demand is just their first mistake. Their second is to assume they should hold their workers accountable for the calls they take. This is to be in complete ignorance of the fact that the major causes of variation in performance are in the system - the way the work works. These two mistakes have resulted in the demoralisation of many workforces. Holding the worker accountable when the system is to blame is the reason why call centres are sweatshops and why so many service operations are inadequate. Costs are high and service is poor.
Bespoke management
Taking a systems view always provides a compelling case for change. It leads managers to see the value of designing and managing work in a different way.
The systems approach is to design, in line with customer demand (the things customers want from you), instead of in functional hierarchies. Working according to demand removes any excess waste caused by the system. As waste is removed, capacity increases, costs decrease and there is more scope for growth. Measures and roles have to be changed. Managers 'act on the system' rather than managing people and budgets. In doing this, managers in different parts of the same organisation use completely different measures - telling them about achievement of purpose, capability, variation and the nature of demand and flow in the system.
The systems approach creates an adaptive organisation. As demand changes, people change what they do - something that is impossible to accomplish in a command and control design. It puts people where they belong: at the heart of enterprise.
Because it is such a fundamental shift in thinking, learning to take a systems view can only be achieved when managers see for themselves the dysfunctional consequences of their current philosophy. Such a change in norms is hard if not impossible to achieve in a meeting or the classroom. Managers have to change the way they behave, but they first have to be prepared to question their philosophy.
A change in philosophy
Taylorism is the management philosophy that underpins command and control thinking. Taylor believed that any worker must be trained by someone better educated than himself and that this trainer or expert should base his work on what he called the laws of science. This led to the belief that knowledge is associated with hierarchy and the creation of what I call the 'management factory' - the place where managers work to set specifications and controls (targets, procedures, standards, inspection and so on).
Today, the people who occupy the management factories in both the private and public sectors have moved away from Taylor's idea that their specifications should be based on a scientific approach. Instead many management specifications are based on no more than opinion. The management factory is a place where managers work with abstractions from the work, not knowledge of the work. The consequences are catastrophic. Call centre 'best practice' standards, balanced scorecard, the excellence model, best value and continuous performance assessment are some examples of a growing raft of specifications that contain either no theory or bad theory.
Target practice
In the public sector particularly there has been an unprecedented growth of the specifications and inspection industry. When he took over as chair of the Audit Commission, James Strachan noted that Britain has the most regulated public sector in Europe, but not the best performing. He openly admits targets are not working but his remedy is to simply have less.
Targets have brought dysfunctional behaviour that is both ubiquitous and systemic because the requirement to serve the hierarchy competes with the requirements to serve customers. Peoples' ingenuity is engaged in survival not improvement. It is now common knowledge that people 'cheat'. To blame the few, as government ministers do, is to be blind to what is really going on. Government ministers have adopted the tenets of command and control management in their pursuit of public sector improvement with disastrous unintended consequences. The cost of the associated bureaucracy is massive but even more important are the costs associated with the consequent poor service and demoralisation of public servants.
Decision-making or leaving your brain at the door?
Another problem is the lack of emphasis on knowledge. Taylor gave the world a systematic way of tackling method - how the work works. But he could not foresee that the way he did it would become a systemic weakness. He made the separation of decision-making from work the defining relationship between manager and worker. Today the consequence of separating decision- making from work is often described as 'leaving your brain at the door'.
Systems thinking represents a better logic for the design and management of work. At the heart of this logic is the integration of decision-making with work. Roles and measures change. With people at the heart of the enterprise, the consequence is a system's increased ability to absorb variety, which is essential to good service design. Management and worker roles alike are designed to improve understanding and control of the system.
The ethos changes from status to contribution. People have a sense of freedom: freedom to act, learn, experiment, challenge and build relationships with customers. Becoming a customer-driven learning system requires freedom, not command and control.
Biography
John Seddon is an occupational psychologist, consultant and management thinker. He is managing director of Vanguard Consulting. His work is a combination of systems thinking - how work works - and intervention theory - how to change it. He credits W Edwards Deming for explaining what is wrong with conventional (command and control) management thinking and Taiichi Ohno (who built the Toyota Production System) with introducing him to the practices and principles of systems thinking as applied to operational performance.
posted by T at 4:39 pm
