Reflections on the management factory

In my book (an early plug I know, but put up with me) I talk about the ‘management factory’. It is a place where people have a different conception of the work, a conception based on the ‘management’ information they use. The problem is the management factory is a major cause of sub-optimisation.
By focusing on the information at hand people who work in management have little knowledge of the way the work really works, the information they use is a collection of irrelevant and misleading abstractions. So I want to devote this issue of the newsletter to reflections on this theme.

Skiing – bad service by design

The reason for the unusually late arrival of this newsletter is I’ve been skiing. This is how the service experience worked: On the transfer bus from airport to resort the representative gave a very long speech about the skiing, boot hire, après ski and so on. She had passed out order forms for
equipment hire and lessons. At the end of her long speech she said she would travel down the coach to collect completed forms and advised that people should not ask questions of her as this might mean she would not be able to collect everyone’s forms.

After getting settled in to the chalet the chalet staff delivered a ‘welcome ’ speech. It was anything but a welcome, it was a series of instructions, injunctions and rules. The party I was with was one group; it was clear many of the rules applied to mixed groups. One in our party lost his rag. In the middle of the ‘welcome’ he said: “Stop, you go do the food and we’ll discuss what matters right now to us”.

The management factory spends time specifying the behaviour of these people, incentivising or targeting the receipt of completed forms on the coach, I expect they represent revenue as commissions, and then specifying the way ‘guests’ are dealt with. Our ‘outburst’ led to the immediate arrival of the next two levels of management. And all we got was more of the same. They were products of their system. The ‘resort manager’ subjected us to a long presentation of no substance to our needs.

And that is the whole problem with the service design. In any service system the customer sets the nominal value, so the customer must be involved in design. So let’s go back to the transfer coach, what matters to the people on the coach? Loads of different things: some are experts, some beginners, some know what they want to do, others don’t, the nature of customer demand is at its most various because the nature of uncertainty for any individual is different and people want to resolve what matters for them. The speech is a nightmare for most. Many of the new words for mountain areas, ski lifts and the like, times for lessons and the various things to do are forgotten as soon as they are heard, questions arising are left unresolved.

Having handed over the forms as instructed (‘if you want service you do it our way’) the weary travellers get to a chalet where they get a lecture on how the chalet works. Up to this point in time no one has been concerned with what matters to any or all of the customers. So we sorted ourselves out
and, essentially, told the management company to get lost.

On the coach back to the airport reps strongly encouraged customers to complete feedback forms; there is little doubt they are measured on completed forms returned. So what do those in the management factory know about the service they provide? Little or nothing; if the managers in the management factory knew how to design against customer demand they would put themselves out of a job. They would learn that much of their current management activity actually worsens the service experience. Is that management’s job?

What is the cost/benefit?

I am always concerned about going in to help make a change at the wrong level in an organisation. You can get persuaded that the person hiring you has control of an area of operations and has a good working relationship with his or her peers and bosses. So you help them do ‘check’ and uncover the massive sub-optimisation caused by the current command and control design. It creates a buzz.

Because the management culture values sharing, what has been learned gets talked about in presentations. It is big mistake, the only people who will be influenced by the process are those who are curious; most managers are not. Many behave defensively; it is inevitable. Soon the management factory asks for reports. Preparing reports takes peoples’ energy away from the things they have become enthusiastic about. In no time there are two groups in the organisation, those who have knowledge about how the work works and those can only try to relate the things they hear about or read about to their current conception of the organisation. So the management factory asks for a cost/benefit analysis.

It is so nuts it is unbelievable. You have learned about the extent and causes of sub-optimisation, like buckets of predictable failure demand, lots of waste in flows, lousy customer experiences and so on and you ask what would be the cost/benefit? In the management factory they need a number. But how would you know? How much waste can you take out and how quickly? The only thing you can and should do is take it out by taking out its causes, and that in turn means big changes to the management factory.

But the management factory wants to know things like: if people work to turn off the causes of failure demand, how much resource would it take and would that investment warrant the return? In asking these sorts of questions they expose the inadequacy in their logic. Theirs is a world of resource against activity; they have no conception of how much unnecessary activity is created by their own behaviour.

We hit the problem of the fish rots from the head; we went in at the wrong fish.

You can’t change the factory with argument

Many management practitioners of the Vanguard methods don’t tell top managers what they are doing. It is easy to show improvements on the ‘bad’ measures required for reporting upwards and they simply cease managing down with these numbers, using system measures instead. They have learned to avoid the inevitable arguments with people who, in effect, speak a different language. The problem is observations made from the systems perspective can only be heard by command and control thinkers from their current world view. To change the world view requires first un-learning, finding out for yourself the sub-optimisation caused by the way work is currently designed and managed and then learning to take action on the work as a system. Very few managers go through this process via argument and discussion; in my experience only those who show immense curiosity get started this way. Most managers can only make the change by actually doing things. It is what I call a ‘normative’ change, you actually change your beliefs by seeing things for yourself. Sadly most top managers think they left ‘doing’ behind long ago.

Urgency should come from leaders, not events

To end the theme on a positive note, I get immense pleasure working with leaders who get out and lead – working on the work with the workers. Understanding the work as a system creates terrific urgency for change and involvement of the people to effect it. It is liberating as well as economic.

So how do you set a target?

I have made it my mission this year to help every manager learn that there is no reliable method for setting a target, that targets always sub-optimise systems – make the work worse – and that using system measures always gets you a level of improvement that you could never have conceived as a reachable target. So to help me I want you to ask any manager you meet: “How do you set a target?” Please feel free to send me their answers, I am interested to see if I learn anything new.

Then consider how you might prove the propositions I have made above. And by the way, don’t have a go at doing it unless they show immense curiosity. It could be career limiting.