Leadership – learning to see

In the last Newsletter I talked about leadership as ‘learning to see’. It struck a chord with many people and some asked where they could read more. The answer is: in my next book that I am endeavouring to finish. But for the moment here is another example of something you learn to see when you take a systems view.

In the last few months we have had a number of assignments in service organisations where managers are using what are called ‘work flow’ IT systems. These systems control the work flow and provide managers with information. From where they sit – detached from the work – managers can see lots of data about volumes of work, work in progress, finished work, backlogs and so on. Managers use these data to move work around available resources; they believe they are in control.

When you look at these organisations as systems, beginning outside-in with understanding demand from the customers’ point of view, you learn that the system, as designed, creates work. We always identify the value work for particular high-frequency demands and then find out how much other work activity occurs. This is all waste. Sometimes the work expands by a factor of four! Managers believe themselves to be managing productivity when in truth the system they manage is damaging productivity. In short, it has poor flow. The people who sold these IT systems said they’d help managers manage flow. Nothing could be further from the truth; ‘work flow’ is a misnomer, they should be called work creation systems.

2-D and 3-D: it is quite logical

A leading systems thinking practitioner writes:

‘Staff who understand systems thinking say they used to see the world in 2-D, now they see in 3-D. Problems arise however when they meet people who can only see 2-D, they have to bite their lips and try their best to translate for them.’

What they are saying is that systems thinking has a different logic. I want to reinforce this point because I see some current systems thinking writers, who incidentally have Government’s ear, saying that systems thinking is not ‘linear’ and cannot be understood in ‘reductionist’ terms. That’s like selling hope.

Vanguard’s application of systems thinking to service organisations is unequivocally and unashamedly linear and reductionist. If you are persuaded that systems thinking is, by its nature, too complex to be susceptible to logic, think again. If you can’t work out what to do on Monday, managers will never buy it. Neither should we.

Call centres: the true purpose

A reader wrote (and I edit it to avoid identifying the service provider):

‘I ‘did battle’ with my service provider yesterday after they cancelled my service, without notifying me. After 70 minutes and a mass of call management systems, I finally got the service on again. I immediately e-mailed my complaint (no answer after 24 hours).

It would seem impossible to call a manager to complain about the lack of linkages of their staff. If you try you are sent back to another call management system.

I asked the operator for a route to management, was given a number, on calling this they said it was impossible to speak to a manager. On the second attempt they put me into another call management system, telling me to take option 2 for ‘Complaints’. It was actually the ‘Technical Helpdesk’ and the agent was mad to be given an irate customer who wanted ‘Complaints’.

These people call themselves the communications experts! I wonder who thought of that?’

So the true purpose of call centres appears to be to avoid dealing with customers. They transact with customers rather than deal with them. It reminds me of something I see a lot. When things go ‘as they should’, which means ‘as management have directed them to go’ some kind of – usually poor – customer service is achieved. When things go wrong the train falls off the tracks, service can get exceptionally bad and, hence, costly. But managers cannot ‘see’ the real costs.

The problem is the top-down design. When you learn to design against demand both of these problems go away. Service and recovery improve. Managers are wedded to the top-down design because they are pre-occupied with managing costs in the way they currently see them. When they learn to work outside-in and learn to see the real costs it comes as a shock.

It won’t surprise you to learn that the boss of this organisation regularly presents at conferences on how brilliant their call centres are. You have to be careful who you listen to and how much you believe.


Seddon upsets the British Quality Foundation

A correspondent tells me I upset the boss of the BQF when I spoke at the IQA conference in Harrogate last month. I guess it goes with the territory. All I said was the EFQM Excellence model is no good for understanding the ‘what and why’ of current performance, it leads to the wrong actions because it asks the wrong questions and there was no evidence that it works.

Insiders tell me the use of the Excellence Model is on the decline. No wonder, it doesn’t bake bread.

The boss of the BQF should get focused on how to change the way the model is used to help people improve performance, not on how to find someone to have dinner with Princess Royal, which is, in effect, the de-facto purpose of his system. No winners, no dinner.

Somehow I don’t think he’ll call.

The balanced score card

A few newsletter readers have asked for my view of the balanced score card. Here is an excerpt from my next book:

The whole idea of the balanced scorecard began in 1990. A multi-organisation study group was concerned with measuring performance in the organisation of the future. The study group began with a recognition that existing (financial) performance measures were becoming obsolete; the group believed that reliance on summary financial performance measures was hindering organisations’ abilities to create future economic value.

One member of the study group was using what he had termed a ‘corporate scorecard’. This was a collection of measures – financial, customer delivery times, quality and cycle times in manufacturing and the effectiveness of new product development. Attracted by the approach, the study group re-labelled this as a ‘balanced scorecard’. In doing so, an idea achieved the status of knowledge. This good idea became the basis for generalising about the characteristics of a balanced scorecard. It was proposed that a balanced scorecard should be organised around four perspectives: financial, customer, internal and innovation and learning. The argument went on that ‘balance’ should be sought between: short and long term, financial and non-financial, lagging and leading and external and internal.

Managers and consultants, it seems, have a habit of following such ideas blindly. Following the first article on the balanced scorecard, published in 1992 in the Harvard Business Review, the leaders of the movement reported that while organisations were using these ideas to improve existing processes – lowering costs, improving quality, speeding up responses – many were not identifying processes that were ‘truly strategic’ – those that had to be performed well for the organisation’s strategy to succeed.

What was missing was a discussion of the framework for determining measures – a questioning of whether the original idea really had the status of knowledge. But, as it seems is the case with management ideas, the promoters got on with the next version. In 1996 the balanced scorecard became a ‘strategic management system’. This system, it was reported, should include individual and team goals, compensation, resource allocation, budgeting and planning and strategic feedback and learning. Now we are in trouble. Deming would have described this as ‘rule 4’, getting right away from the point. The ideas are plausible but flawed. Individual goals are dangerous when the individual’s performance is governed by the system. Goals themselves are dangerous and are better replaced by capability measures.

Then I go on to give three recent examples of the balanced scorecard in use. In each case the measures employed were not helping in understanding and improving the work – they had simply organised the measures they know and love into a meaningless but costly framework. For more you’ll have to wait for the book!

But go back to the call centre article above and think for yourself; what measures do you suppose these people would put into a balanced score card? Would they help them see or go blind?

ISO 9000: 2000, will organisations convert?

A reliable source tells me only 20% of UK organisations have converted to the new ISO 9000: 2000 standard. They have until 2003 to do so. My advice is: don’t! Maybe this is the beginning of the end?

Seddon goes to Government

This month we have seen press reports of disputes between ministers and doctors on the truth of performance against targets and further claims of cheating amongst teachers. The problem is no one can think of anything better to do than do the wrong thing righter, so they get stuck into arguments about detail in the health service and how to control the culprits in education. And next month it will be the same but the other way around.

I have been invited to present evidence to the Public Affairs Select Committee on the value of targets. If this matters to you, please let me know what impression you would like me to leave them with. Moreover I would be pleased to receive further evidence of the consequences of the current regime – beyond the problems of targets I am now collecting evidence to show that the Government’s prescriptions are making the work worse. Yes I intend to tell it like it is. This is, or was, after all, a democracy.