How Good is Your Management System?

 

What’s the purpose of a ‘management system’? What are its key elements? What are common failure modes?  How do you know if you have a good one?

My job the past few decades has been to help our partners meet their business goals by developing strong people & management systems. My personal mission is to teach leaders Ambidexterity – the ability to both

a) Protect the core with OpEx/Lean, and

2) Ignite new Growth using the methods of Silicon Valley & Singapore.

Your management system enables both and is analogous to the wire harnesses that enable high performance airplanes & automobiles. I’ve written at length about the questions above. In this piece I’d like to describe the tell-tale attribute of a great management system.

Key Attributes of World Class Management Systems

World class management systems make problems visible.

By ‘problem’ I mean the difference between

·       What Should Be Happening, and

·       What is Actually Happening

Each of these must at least define purpose, process & key metrics. By ‘visible’ I mean obvious to all team members.  ‘Everybody knows’, to paraphrase Leonard Cohen.

In practice this means that problems are painfully clear at team boards at every level - from the Senior Leader Obeya to front line team boards & huddle sessions. When I’m asked by a Board or Senior Team to ‘assess our management system’, a key step is to walk the value stream backwards, starting with the customer, and moving upstream one step at a time. A parallel step entails walking the customer journey backstream, starting with the top of the proverbial funnel.

In my value stream walks, I ask questions like:

·       Are problems visible (even to an outsider like me)?

·       What do people talk about in their huddles? Are problems understood & addressed in a clear & decisive way?

·       What’s the organization’s attitude to problems? Are problems hidden, a sign of failure? Or are they, to quote W. Edwards Deming, ‘the process speaking to us’?

·       Do teams have a standard approach to problem solving?

·       How good is the data? Is it complete, end to end, and of high quality?

·       Does the team develop ‘Your Own Data’ (YODA) as required? Or do they passively wait for corporate data?

Here are your key checkpoints:

·       The visibility of problems, and

·       Quality of problem solving (the focus of upcoming articles)

I vividly remember an engagement with a large multinational consumer goods company.  They were good, capable people and their company had enjoyed strong growth for several years. They’d invested in teaching their team members root cause problem solving. I spent a few weeks walking the most important value streams from the customer all the way upstream. I attended team huddles and walked the shop floor.

I presented my findings to the COO & senior management team:

·       Everything looks good on the surface – purpose strategies seem cogent, data seems to be flow, workplace fundamentals look okay on the surface (e.g., 5S, standardized work, visual management), and morale is fairly good.

·       But there's flashing RED light – team boards at all levels are always Green; the critical third wall of the Obeya (Blockers) is usually empty.

‘But we’ve given everybody problem solving training,’ the team responded. ‘

There's flashing RED light,’ I repeated, and added the my old sensei' motto, ‘No problem, is a big problem.’

My report fell on deaf ears.

Six months later there were major outbreaks of food poisoning related to their products. Several customers became ill, and the company’s brand suffered serious damage. A number of senior leaders resigned.

The visibility of problems and quality of problem solving are your early warning system, and a key to de-risking your enterprise.  You want to assess your management system?  Start there.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Goldilocks & New Ways of Working

 

‘Goldilocks and the Three Bears’ has delighted children & their parents for generations. And no wonder – it’s deeply satisfying story and its core metaphors continue to inform us. Recently, an old friend & I were reflecting on our adventures in the 'New Ways of Working' (NWoW) business, and Goldilocks came up again.

NWoW (Transformation) is a Fun Business

Good people, beautiful places & interesting problems to solve: ‘What’s the best way to help these people lock in this learning? Who are the champions? How do we deal with the blockers?’  Along with the jet lag & long days, you get to experience exotic cultures & the world’s great industries from the inside. It's something like playing chess on multiple chessboards. You start to see common shapes & recurring patterns. And so, teaching executive amounts to telling stories about the different chess boards I’ve experienced and the lessons learned thereby.

Business Transformation Has a 'Goldilocks' zone  

NWoW transformations have a ‘Just Right’ zone or ‘sweet spot’. The company should be neither too successful, nor too desperate.

Too Successful: We helped a fine financial services partner build a kick-ass ‘Protect the Core’ management system over several years. Continuous improvements in Customer Experience, Cost & Morale resulted in solid year-over-year growth.  ‘Bravo,” I said, “now let’s build on your foundation. Let’s innovation our way to new offerings and ignite new Growth.”

But there was little appetite for igniting new Growth.  The Innovator's Dilemma was in full bloom. “If we stay the course we’ll continue to have solid growth & prosperity and we’ll live nice lives. Why should we kill ourselves?”

Could I blame my friends & colleagues for resting on their oars? They had earned their success and were grateful & gracious. The Innovator’s Dilemma was in bloom, but my job is to keep pushing.  So, I talked about black swans, the dangers of complacency, and ‘how the mighty fall’. But I sensed we’d gone a far as we could go. People were happy & wanted to enjoy life. Nothing wrong with that.

Falling Apart:  Companies that are in imminent danger of collapse, and losing major customers through ineptness, malfeasance or bad luck, can scarcely breathe, let alone commit to new initiatives. Absorbing & applying New Ways of Working requires a cool head, steady leadership, and a long-term perspective. Business transformation requires experimentation and the strategic, financial, cultural, and physical space to play. Some call this a 'sandbox', which evokes the happy atmosphere & attitudes conducive to innovation. The best sandboxes are light-hearted, relaxed, somewhat goofy, and evoke a comedy club or children's playground.

I’ve learned to say No to ‘Death’s Door’ engagements.  It’s trench warfare & kills your quality of life.

What Does This Mean for Leaders?  

1) Do not wait until the building is burning. Business system innovation is hard enough in calm water, and almost impossible in a hurricane.

2) Keep trying stuff: Have a few innovation irons in the fire at all times. In this way, the team gets used to tinkering, experimentation and goofing around. 

3) The Light Touch: Aim for a droll and even somewhat goofy environment. "We're always trying stuff, some of it way out there" can be a helpful attitude.  Of course, be diligent & mindful of Cost and rigorous in your experiments.  Clearly define Purpose & Hypothesis and keep your experiments fast & inexpensive. Think carboard & duct tape in the analogue space, and quick & easy social media experiments in Digital space.

4) Your Transformation Team: Seek droll, off center, energetic, optimistic. results-oriented people.  Seek T-shaped individuals (profound knowledge in one area, and a range of interests & capabilities.)

Companies who are pretty good but know they can be better are ‘just right’ for business transformation.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

What is a Self-Improving System?

 

What is a people network? Connectedness, shared information and reciprocity.  What does it look like? Short, focused, connected huddles around visual boards. Why does it matter?  A strong network is like a nervous system. Think quick response, adjustment and learning. If you pull it off, it’s a gold mine. So how do you build one?

Building a Self-Improving System.

Here are some key elements.

·       Clarity & alignment around Aspiration & Winning Logic. Each level and team translate the these into a tactics & metrics they track on their huddle boards.

·       A Big Room called an ‘Obeya’ (aka Control Tower, Cockpit) that serves as ‘mission control’. The Obeya answers the big strategy questions at a glance. What should be happening? What’s actually happening? What are the biggest blockers & what are we doing about them?

·       Information flows up, and support flows down. “Here's how we're doing, and here are the blockers. Can you please help with this one & that one, boss?”

·       World class problem solving – more to come on this topic in future posts

·       Clear roles: It’s understood that the team owns the problem. Senior leaders help remove the blockers that are beyond the team’s control

What are the enablers?

·       Simple visual standards for all important work

·       Repeatable operating rhythms at each level.

·       Visual management - at a glance understanding of what’s happening

·       Strong connections between teams in the form of Ok/Not Ok tests.

·       Clear rules of engagement such as:

o   Make problems visible – they’re gold

o   Warm heart principle. Hard on the problem but easy on the people. Remember the problem is usually in the process.

o   Respectful inquiry. Leave your rank at the door. Listen more than you speak.

o   Evidence-based management – no Zebras or Hippos![i]

 

Common Blockers

Common failures modes include poor (i.e. invisible, low quality, incomplete) information flow, lack of shared Purpose, and an overly rigid strategy deployment system.

Team Hassles: The ideal team size is typically between 5 & 9 people (e.g. Amazon’s famous ‘two pizza teams’). This sweet spot balances the need for diverse skills & perspectives against the communication & coordination challenges that plague larger groups. There are many other team-related hassles well described by Patrick Lencioni and others.

Information Hassles: E.g. Information that is incomplete, low quality or invisible. Team boards can be both analogue & Digital, but a messy analogue board is more compelling.

Lack of Shared Purpose: Have we articulated our purpose in clear simple language?  Can team members explain in their own words? Leadership is oratory, leadership is storytelling.

Dysfunctional Cultural Norms: Reciprocity means ‘you scratch my back, and I’ll scratch yours’.  Incentive structures obviously help but are not enough. Cultural norms around Safety, Respect for People, Teamwork and other core principles drive reciprocity.  Great companies provide continual nudges in this direction. Leaders at every level have a shared set of values that they reinforce through shared ‘ceremonies’.  Culture is what you do when nobody is watching.  Over time these shared routines and norms permeate you way of thinking and behaving.

Here’s an example from early in my career. The scene: my first day at Toyota, in the manager onboarding program.  Our instructor began by drawing three ovals, one at a time, and labelling each:

·       Oval 1: something for the customer & community

·       Oval 2: something for the team member

·       Oval 3: something for the company

My fellow trainees and I stared at the Toyota logo.  It’s a nudge I’ve never forgotten.

That said, please do not copy Toyota or any other company. Make a system that fits your company, culture and industry.  Weave in the fundamentals, run experiments and keep getting better.

Best regards,

Pascal Dennis

E: pascal.dennis@leansystems.org

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[i] Highest paid person’s opinion; Zero expertise but really arrogant.

How to Manage Watchers? Fukuda’s Parable in the Age of AI (part 3)

 

Watchers comprise the bulk of your team & are the key to sustaining your transformation.  If we can turn them into Rowers, we’re in business.  If they morph into ‘Quiet Quitters’, we’re sunk. Here’s part 3 of my series on Fukuda’s Parable, based on the book Andy & Me.

“How Will You Motivate Your Team, Pascal-san?”

I quote a revered mentor who once posed this question to a fledgling manager & engineer. I’ve been thinking about it ever since. Watchers neither take the oars, nor run away. They sit back & watch, waiting to see how the Rowers make out. Your job as leader is to demonstrate that the new ways of working are fun & rewarding, and to thereby engage the Watchers.

The argument goes something like this: Change is hard, but we have no choice. If we do nothing we’ll soon be obsolete. I’m proposing a Win-Win situation. We want to help you become smarter, more capable, and forever employable. And we want you to do the work that needs doing, and to help us improve.

If the Watchers see the Rowers having fun, getting results, and kicking ass, more & more of them will take an oar. If, by contrast, they see the Rowers having a tough time through lack of visible senior level support, they’ll stay on the sidelines thinking, ‘This too shall pass.’

Do not give the Grumblers a platform – that just distracts the Watchers. It’s best to either ignore Grumblers or to apply the methods of Steve Jobs or Jack Welch, which I described last time.

Quiet Quitters

Gallup polls since the pandemic suggest that quiet quitting is a growing phenomenon, especially among Gen Z. ‘I’ll do exactly what the job requires & no more.’ They won’t stay late, show up early or show up to non-mandatory meetings. Are all Watchers, quiet quitters? Not in my experience. That said, I know senior leaders are keen on Agentic AI at least in part because of frustration with quiet quitters. Other leaders respond to ‘quiet quitting’ with a tit-for-tat approach called ‘quiet firing’.  In other words, we’ll give you less & less responsibility and attention till you go away.

Engaging the Watchers

I am of the ‘everyone-deserves-a-chance’ school of leadership. The leader must lay out a Win-Win scenario and invite people to take an oar. Leaders must be storytellers & orators and must embody the organization’s core Values. Develop a management system that makes visible ‘What Should Be Happening’ versus ‘What is Actually Happening.’ Embed cultural ‘nudges’ in your operating rhythms including Strategy deployment & execution cycles, leader Obeya (Control Tower) meetings, management walks, and daily team huddles. Your Root Cause Problem Solving & Innovation processes are also an excellent source of such tacit knowledge.

Get Results Fast

Prove that ‘this stuff actually works’ with quick wins on thorny problems. I advise my mentees to create stages, forums, and ‘shows’ wherein your stars can shine. These can be Shark Tanks, Innovation Councils, Pitch Competitions, Problem Solving Fairs, and the like. The point is to create momentum by showcasing quick wins and thereby to turn Watchers into Rowers.

Be tough, be fair. Set up a Win-Win and give everybody a chance. If there are Watchers or quiet quitters still refuse to engage, that’s on them.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org