The Crux of the Challenge
Step Change
There has been, throughout the twentieth century, extensive developments in our understanding and management of organisations. Some enterprises have adopted modern thinking with considerable success, other have remained traditional in their outlook. There is a marked difference in performance.
A research project conducted by Motorola observed that there were a range of companies with good quality (to use manufacturing parlance say 1-2 failures per thousand) and there were companies with truly excellent quality (say 1-2 failures per million). But there were none in between. The project concluded that moving from failures per thousand to failures per million is not a gradual process of continual improvement. It is a step change. The thinking of companies achieving 1-2 failures per million is very differently from those achieving 1-2 failures per thousand. Edwards Deming used to refer to this change as a " transformation". Richard Pascale talks in terms of a metamorphosis. "Many companies need to reinvent themselves. And re invention is not changing what is, but creating what isn't. A butterfly is not more of a caterpillar or a better or improved caterpillar; a butterfly is a different creature. Re invention entails a series of continuous metamorphoses of this magnitude over time"
But before we address how our organisations think let us define a management culture or paradigm as containing the following five elements. The crux of the challenge is that when we consider change we do have to address all five aspects. If we are tempted into a "quick fix" that addresses only one aspect then in reality nothing changes..
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VALUES |
Values such as integrity, honesty, respect for the individual. Our sense that love is progressive and that domination, conflict and violence is destructive. Our sense of community and the individual's responsibility within that community. The ideal of democracy, the vision of economic growth and that the benefits should be spread amongst the whole of society, etc. |
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AIM |
The aim sets the boundaries of our action. The UK government's aim is to modernise Britain; the aim of a company may be to improve profit, morale and customer service; a sporting team may aim to win a championship. What are the desired outcomes? |
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THEORIES |
The fundamental theories through which we structure our organizations. Our theories of - motivation and reward - our concepts of systems - the self organizing nature of The Market Economy - our understanding of variation - our appreciation of how we learn - the essence of competition, etc |
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METHODS |
Examples of our methods would include budgetary control, organisation charts, performance related pay, staff appraisals, ISO 9000, IiP, Quality Circles, use of qualifications to measure education, etc |
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RESULTS |
The actual outcomes from the above interdependences might be the profitability of the organization, the morale of its people and the service it provides its customers. |
The results or outcomes are a function of our values, aims, theories and methods. It is a function of their interdependence and compatibility.
It was Professor Douglas McGregor in his ground breaking book "The Human Side of Enterprise"(1960) who clearly explained how "The theoretical assumptions management holds about controlling its human resource determines the whole character of the enterprise." As an example he said that if we believe people to be lazy and require motivation then we establish appropriate control methods and supervisory structures. If on the other hand we consider that people are self-motivated and come to work wanting to do their best then very different enabling structures are designed.
The disaster of the past 50 years has been our susceptibility to "The Quick Fix." Rather than address the whole we tend to grab a short cut. 'Managing by Results' has been a typical short cut. Targets are set and individuals are made "accountable." The individual is expected to work hard, use his/her initiative and produce enhanced results. It totally ignores the fact that the individual within an organization can only marginally influence the theories and methods in use.
The other equally illogical short cut is the introduction of new methods, TQM, Quality Circles, ISO 9000, IiP being classic examples. Overlay a new method onto old theories and the old theories will dominate. For an example we need look no further than the application of ISO 9000. ISO 9000 is a systems method. However the majority of UK organizations are modeled round "Command and Control" concepts. The result is that the ISO 9000 system model degenerates into demands for compliance and the dominance of auditing. The underlying systems theory of the standard gets twisted to reflect the norms of our command and control culture.
Our argument is that if we are to "Modernise" - make it simpler - then we should modernise the whole - and that includes our values, aims, theories and methods - we must take a holistic perspective.
An Analogy
It contrasts the different approaches of Monty and his father to training a horse. The aim is similar - to have the horse safe to ride. But the values, methods, and results as one can imagine are very different. Monty's father "breaks" the horse into compliance - it takes six harrowing weeks. Monty, in contrast, gently persuades the horse to accept him as a leader - it takes three hours. (also consider the horse's mental state after these two experiences.)
The striking difference between these two methods is in the underlying values and theory. Monty's father reflected the traditional belief that we have to dominate the horse into compliance. But Monty Roberts, after studying horses in the wild, recognises that if there is trust, horses (just as humans) are quite willing to allow themselves to be lead; it is naturally to their social order.
The point we emphasis is that had Monty Roberts not been willing to challenge the basic values and theory - 'got to dominate the horse' - he would never have found a method for creating trust and leadership. He would not have achieved his transformation - he would not have found a simpler way.
Examples
To portray the relationship between theories, methods and results we have in the tables below taken two examples of traditional and modern theoretical assumptions.
In the first we use Douglas McGregor's comparison between X and Y theories of management. In ‘X theory’ the organization perceives the workforce as inherently lazy and in need of supervision. The ‘Y theory’ perspective acknowledges that work is a basic need. We come to work wanting to do a good job, wanting to take pride in our contribution.
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Theory |
Method |
Results/Solution |
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Traditional People are naturally lazy and require motivated (X Theory) |
Hierarchical management structures Emphasis on managing people Supervision Documented contracts and procedures, and auditing against these documents Bonuses and other forms of inducement Appraisal Targets and budgets |
Compliance to the dictates of the boss or the procedure Low morale Employees delegate decisions upwards A blame culture Little initiative High cost of inspection and auditing Low quality |
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Modern Work and Learning are basic needs. We enjoy being part of a successful team. We like to contribute and be valued (Y Theory) |
Flatter structures Emphasis on managing organisational systems Methods of defining motivational characteristics Emphasis on communication across the organization Creating a unified vision and aim TQM, BRP, JIT etc Quality Improvement teams |
Empowered people who can express their creativity. High morale Employees take responsibility Positive response to change Low costs of inspection and auditing High Quality |
In the second example we take the belief that it is possible to definitively write down instructions, procedures and contracts and once written they can be followed to the letter.Individuals can be made accountable.
In contrast we consider systems thinking where it is believed that we operate within systems. The predominate consideration is the design of the system. It acknowledges the fact that outcomes are to a very great extent dependant on the design of the system not the diligence of the individual. If we are working in a well designed system we will produce good work and if the system design is poor then the outcomes will be poor. Furthermore systems are complex and dynamic.
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Theory |
Method |
Results/Solution |
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Traditional Static Procedures We can specify a contract or job description and make people accountable |
ISO 9000 Procedures Accounting procedures Contracts Job Descriptions Staff Appraisal Auditing Non Conformance Reports |
Stagnant systems Blame Defensive strategies Gives quick fix solutions that hide underlying reasons Becomes more important to adhere to procedure than satisfy customer needs |
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Modern Systems Thinking Recognition of interdependences and the dynamic nature of systems |
Systems Leadership Design of systems (with the help of ISO 9000, IiP, BEM) Flow Maps Dynamic System Diagrams Identification of Leverage points |
Encourages search for underlying reason Change and continual improvement Recognises individual variances Fast Response to actual customer needs |
In conclusion the challenge - if we want to find a simpler way - is the identification and questioning of our theoretical assumptions or underlying principlesand then incorporating them into a holistic perspective. It is difficult because most of the concepts we hold are deeply ingrained.