Monthly Archives: July 2011

Systems Thinking and Management

Compliance is a Poor Substitute for Responsibility

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My recent Quality Digest article (A Three-Word Phrase that Destroys Service Systems) alluded to the problems of inspection, audit and other activities that seek compliance.  They destroy service while pushing out responsibility.  For the audit and inspection mindset there is trouble lurking behind every corner.

Too often people doing the real work are forced into doing things that must be done for compliance even when they make little sense for what they do.  You hear the workers say “we have to do this to comply with audit” and grudgingly move on.  The auditor smiles and puts a check on the list and off to commit more evil.  Some workers go back to doing what makes sense to them as they know the work and issues better than the infrequent auditor or they may continue to do what they have been badgered to do to survive.

Management wants control and inspection/compliance seem to fit this mindset.  This kills responsibility and costs alot to deliver.  Instead, managers should just say we don’t trust people and we are willing to put employees we don’t trust in front of customers . . . they are cheap ya’ know.  Do not worry, these people management doesn’t trust are being heavily watched by the inspection police so we have you covered.  Don’t worry about the cost, we have your back.

The management mindset is filled with control that increases costs.  Seek compliance, not responsibility is the mantra.  Customers do mind paying more for all this compliance.  Don’t put a shmuck in front of a customer that you don’t trust and for heaven’s sake don’t make them pay for the poor system design that delivers pathetic service.

95% of your organization’s problems are down to the system, not the individual.  This presents a management paradox and a different approach to business and government improvement.  The system you put workers in dictating performance.  You can trust workers if you give them a good system to work in, if the system is poorly designed waste begets waste and compliance and inspection have to sort out the “cheaters.”

Responsibility needs to be designed in and much of the inspection and audit (especially that dictate system design) needs to be designed out.  Indeed compliance is a poor substitute for responsibility.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking Concepts

What Does Your Service Organization Value?

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Look inside any organization and you can find what is of value to them.  If the front-line is manned by low wage earners without the ability to make decisions important to customers.  And further have their every move controlled by management using technology, policies, procedures, rules, audit, scripts, reports and an assortment of other management control mechanisms.   The customer is of little value to you.  Your organization loves itself more than the customer.

When 20% of all employees can create or add value and the other 80% add little or no value you have a problem.  If this 80% spends its hours devising ways to entrap or disable what customers value from the 20% that create value costs will skyrocket and customers will flee.  And BTW, that 20% are almost exclusively front-line workers and management.

So few can create or add value because of system design . . . the 80% outnumber them.  For every one step a value creator takes forward, the people paid the most in positions that customers value least find ways to entrap or disable taking two steps back.

The challenge is to design a system where 100% can create or add value.  The problem is overcoming those that have grown accustomed to status or position and not value for customers.  This matters little whether your organization is 80/20, 63/37, 40/60 or whatever the number you might find in your service organization.

Designing better systems requires service organizations to stop doing certain things and begin doing better things.  Ultimately, some activities just need to be stopped.  If you believe that stopping smoking is the right thing to do, you don’t need to put something else in your mouth that is bad for you.  The 80% left without better things to do, almost always find activities to replace those they just got rid of that are just as bad.

So what is a good way to assess what your organization values?

Go to the work and see who interacts with customers and those are your percentage that can create value.  Or better do what one manager did, pull the fire alarm and send everyone to the parking lot.  Get on the bull horn, and tell all those that interact with customers to go back inside.  What you have left are an assortment of space eaters and management.  Suddenly, you will make the realization that you don’t have a capacity problem you have a design problem.  The organization has designed in roles that can only produce waste.  And your customers already know.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Healthcare

A New Blog for Healthcare

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I will send out a more formal announcement later this week, but the new 95 healthcare blog has arrived.

A little about the blog:

Andy Brogan and Mark Cannon have both been senior managers in the NHS, each having considerable experience of Acute and Community health care, Social Care and commissioning. Despite their years of experience working inside the NHS they are only now, together with other 95 colleagues, starting to explore the application of the 95 Method within the UK health and care sector. What they are learning reveals a system which, in taking care of business, may be at risk of forgetting that it is in the business of care. The very performance management infrastructure which has been designed to improve quality and efficiency is revealing itself to be a primary cause of dysfunction. So too with commissioning, competition and the thrust towards a market approach to health care provision the 95 Method is revealing these to be driving forces behind a system which is fragmented, adversarial and, critically, incapable of enabling continuity of care across providers. The human and economic consequences are distressing but point the way towards an immense opportunity to improve the health of the population and the health of the bottom line. The ‘95 In Health’ blog is tracking the journey of the 95 Method in health as Mark, Andy and their colleagues learn. You can find it here if you want the latest and if you want to contribute.

Personally, I can’t wait to learn what applying the 95 Method does for healthcare in the UK.  As we get knowledge using the 95 Method in healthcare, the US can benefit too.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Measures, Systems Thinking Concepts

Control Charts – Why 3-Sigma Limits?

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First of all, I am not a statistician, but have learned from what I consider to be the best people in the statistical realm.  Dr. Don Wheeler, Dr. “Frony” Ward and a gentleman named Tim Baer.  These folks understand in statistical terms how control charts work and also understand the message of W. Edwards Deming and Walter Shewhart.  If you want to understand Dr. Deming’s System of Profound Knowledge. you have to understand variation.  David S. Chambers and Dr. Wheeler’s book Understanding Statistical Process Control is a must read.

The question came to me recently about why three standard deviations (3-sigma) and not two to discern data.  I reacted rather badly as it had been awhile since 3-sigma limits had been challenged.

Wheeler and Chambers (in the fore-mentioned book) point out that 3-sigma limits are “not solely based upon probability theory.  Further . . . “this point has been repeatedly misunderstood by those who would use  probability theory to “adjust” control chart  limits.

Shewhart identified his reasoning in the Economic Control of Quality of Manufactured Product:

” . . . we must use limits such that through their use we will not waste too much time looking unnecessarily for trouble.”

“The method of attack is to establish limits of variability . . . such that, when an observation is found outside these limits, looking for an assignable (special) cause is worthwhile.”

” . . . we usually choose a symmetrical range characterized by limits

Ø ± t σӨ

Experience indicates t=3 seems to be an acceptable economic value”

“Three-sigma limits are not probability limits.  The strongest justification of three-sigma limits is the empirical evidence that three-sigma limits work well in practice – that they provide effective action limits when applied to real world data.  Thus, the  . . . arguments cannot further justify the use of three-sigma limits, but they can reveal one of the reasons why they work so well.” –  Wheeler and Chambers

So, there you have it.  Empirical evidence by their use is the reason that we have 3-sigma limits.  This fits with overwhelming evidence for when to look at special causes.  Occasionally, I find that I get a false signal in practice wither a special cause within the limits or a false signal outside the limits.  However, I have found that they serve me well in practice.

Further, I have found that in service that limits are much more robust in as systems display great variation.  Many times this has played itself out as I understand customer demand – meaning that homogeneity of the data is the issue, not the limits.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Technology, Systems Thinking Concepts

New Management Role – Enabler of Work

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Management barking orders to front-line staff is the visual I get when visiting organizations of all shapes and sizes.  Management is supposed to manage and workers . . . well, they work.  Unfortunately, management has not changed much in the role they do over the past 100 years or so. Management is not quite as blatant as past years (e.g., no beatings or yelling).  But the premise of management thinking has not changed.

Gone are the days when workers became managers or at least not as prevalent.  MBA graduates skip the work piece and go right to management . . . without knowledge of the work.  A travesty with inglorious repercussions to improving things.  Sadly, this is today’s management.

However, there is a new way to manage that offers hope.  Instead of the pathetic management style that entraps or disables work, there are those few that can embrace enabling work.  This begins with understanding doesn’t come from a book, but with knowledge of customer demands and purpose.  This leads to a realization that decision-making is best left to those with knowledge.  As knowledge comes from the work and not spreadsheets.

Ultimately, this means that workers have the best knowledge, but management has the ability to change the system in which they work.  Improvement of any system requires unprecedented cooperation between workers and management.  Workers identify what disrupts flow and management removes these barriers.  Simple as that, except that managers are too involved with wasteful activities to recognize or listen to what barriers exist.

Management as an enabler requires different thinking about the role of management.  It is not big IT projects that perpetually create more failure demand and add costs or changing the system based on assumptions, ideologies or history.  It means a role that understands what gets in the way of customers trying to purchase your product or service.

There is no lack of those things that create hurdles for customers and they cost companies extraordinary amounts of money.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Education

Atlanta, Dallas, D.C. – A Predictable Result When Using Incentives in Education

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The cheating continues for those with incentive programs to get higher scores when testing students.  I hate to say I told you so . . . but I told you so.  Tying test scores to performance opens the door to cheating, people will do what they need to survive in  a bad system.  Administrators and teachers alike are doing the best they can in these poorly conceived systems of education.

My home state, Indiana, just pushed through education (without knowledge) to tie teachers pay and performance to test scores.  Governor Daniels and State Superintendent Tony Bennett, here is the predictable result that you have set up by the system you just put in place.  Political ideology over knowledge creates bad systems.  With great irony . . . ignorance reigns over education.

The response of government will be more oversight to find the criminals, and therefore, more cost to implement these programs.  Here is why we have overspending in government.  A cycle of damaging legislation without knowledge and then costly oversight to find cheaters.  While the “high ethic” Governors can wash their hands of responsibility believing that just a few bad apples are the problem.  NO!  The problem is the ridiculous system you just put in place.

Performance doesn’t come down to the individual, it comes down to the system they work in.  This is true for teachers, workers, management, administrators and yes . . . even a Governor.  If we are going to stamp out costs and balance the budget at the state, federal or local level there needs to be less ignorance and more knowledge about what drives performance.

We have started this country down a worse path in education because of wrong theories.  Education will be the only way out, but we need theories that work.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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