The Productivity Spotlight: Planks and Splinters

November 29th, 2016

Working with numerous organisations in public, private and third sectors and across manufacturing, utilities and services I am increasingly struck by the extent to which the contemporary challenge of improving productivity needs to focus more on “the management” than it does “the workers”. Productivity improvement thinking, from Adam Smith (pin makers), through Frederick Taylor (pig iron handlers), Frank and Lillian Gilbreth (therbligs), Henry Ford (moving production line) to Taiichi Ohno (Toyota Production System) has focused on the technology of processes of production and the motivation of “the workers”. While the benefits have been enormous, the productivity issue now lies not so much in those value generating1 processes (although there continue to be opportunities) but in the value enabling processes – those that exist to support and enable value generation, to manage the existing processes, to create the future and sustain the identity of the organisation – activities we usually call management.

Examples of this abound. In one company a presentation on potential performance gains and savings (of the order of 20% of total costs) was going splendidly until it dawned on the (very) senior managers present that it was their work, their processes, their decision making that needed to change. Another company experiences continuing pressure from its major clients to reduce costs, to do more for less, something it has achieved year on year by refining and improving operational processes. Pressure unrelieved, doing more for less is no longer an option, to reduce costs further it must do less for less, or, it can change the way in which it manages things. Remember costs are a function of process and process is a function of management, so if you want to reduce your costs you need to change your management decisions!

Management faces two challenges. The first rests in ensuring that the value generating system is fit for purpose. Deming recognised that the value generating system is the responsibility of management and accountable for common causes of failure (94% of all errors). He2 saw these errors as arising from system design – the processes, information, systems, behaviours and skills applied to the work. Notably only 6% of errors then can be ascribed to “the workers”. In projects seeking to improve productivity the biggest and easiest gains are usually associated with the biggest numbers!

Meanwhile Juran3 is cited as saying

‘management controllable defects account for over 80%’.

Whether the ‘right’ answer is 94% or 80% is not really important – the argument is that most of the scope (80% plus) for increased productivity is addressable only by management because only management can change ‘the system’. Management must deliver better systems of work to (and in conjunction with) the operators, those better systems will generate improved operational productivity. This is the first organisational learning loop – doing things right.

org-loop

Organisational Learning Loop (from Beckford, 2016)

The second management challenge rests in the responsibility of management to improve itself. Any competently designed process includes a reflective cycle, a stage in which the ‘manager’ of the cycle (who may also be its operator and therefore responsible for self-improvement) reviews its performance and takes steps to improve the next iteration. So far, where that loop has not become denatured by continuous reassertion of the status quo:

“the beatings will continue until morale improves”

“how odd, it didn’t work when I tried it either”

“the operation was a complete success but sadly the patient died”

we have typically applied such thinking to value generating processes but not, so much, to value enabling processes. Where is the learning loop that manages management? How does management know when it is doing things right?

management-of-management

The Management of Management (from Beckford, 2016)

Examining the management process means that managers must either critically examine their own decisions, their own performance and make improvements, or be guided by higher order managers or external experts (perhaps from other disciplines). Often management is realised as layers of apparent bureaucracy, checking, auditing and verifying the work rather than enabling it, or articulated as intervention by the manager in the work of the operator

“step aside, let me show you how it is done”

perhaps we don’t all or always perform these value enabling processes as well as we might?

Management must shift its attention to improving the process of management rather than intervening directly in the operating process – this will point the action at the problem, engage the staff and improve productivity. This is the second organisational learning loop – doing right things!

This is of course hugely challenging. First because it requires us to recognise that the job of the boss is to improve the performance of the subordinate NOT the process and, while “all feedback is a gift” most of us have received a Christmas jumper from a batty aunt! Second, it requires us to work at a distance, we must teach what to do rather than do it. That requires that we are able to recognise what is inhibiting performance, explain (in the language of the recipient) why it is a problem, what might be done about it and how it might be done and do all of that in a manner and style which the recipient is able to accept.

That requires, and this applies to all managers at all levels of organisation, a recognition that the way we see ourselves in our world is necessarily incomplete and in that incompleteness rests the scope for learning. We must paradoxically be arrogant enough to ‘know better’ and teach others and simultaneously humble enough to recognise our need to learn. Self-denial, smugness, an inadequate understanding of self in which we are unable to see our own contribution (or lack of it?), will not suffice.

Those organisations which understand how management can be value enabling as opposed to simply controlling, that embed learning and adaptation will be able to step up to the productivity challenge – especially in the information age.4 The business benefits of a change in approach which focuses productivity improvement on the performance of management has the greatest chance of addressing the 80% of challenges that are embedded in the system.

Don’t assume you have to know the answers, don’t assume the expertise is in the room, don’t rely on past experience without understanding the result of doing it that way last time (i.e if somebody has done it before what was the outcome). I am not much given to biblical quotations but in this instance managers need to focus first on the planks in their own eyes which obstruct productivity and not worry so much about the splinters in the eyes of the operators.

It is time the productivity spotlight was used to illuminate the managers!

1: Beckford J, 2016, The Intelligent Organisation

2: Deming, W.E, 1986, Out of the Crisis

3: Juran, J.M. 1988, Planning for Quality

4: Brynjofsson & McAfee, 2014, The Second Machine Age