Systems Thinking: The Battle for the Management Mind

Monday, August 17, 2009 by Tripp Babbitt

Walk around any service business today and you will see some of the oldest practices of management in place. The problem is most don’t recognize the practice or the original thinking that went into it. They have become part of our culture and being. Scientific management has been the mainstay of U.S. business since 1911 (or before) when Frederick Winslow Taylor wrote "The Principles of Scientific Management." A breakthrough in its time, Taylor brought us the functional separation of work, standardized tasks and "the one best way" to do any task (best practice). These concepts were all breakthroughs in their time and still drive our management thinking today.

But is that a good thing? Well, for the most part one would have to say "no." The work of Dr. W. Edwards Deming helped to change this philosophy in post-WWII Japan. Dr. Deming’s quality message was rejected in the United States after WWII mostly because international countries had been decimated by the war, and all turned to the U.S. to buy their goods and services. General MacArthur’s invitation to Dr. Deming to help rebuild Japan was accepted and so were the seeds of the "Japanese Industrial Miracle." The productivity mindset created by scientific management worked well for many years until better thinking prevailed. The U.S. has never recaptured what has been lost in the manufacturing arena. The U.S. has blamed everything from low wages, unions, health care and an assortment of other issues for their problems in manufacturing.

Anyone have a tool? A label? Dr. Deming had a profound impact on the Japanese thinking and upon his return to the United States was heralded as a management guru. His every word was listened to and every business wanted to know how to get the "magic" that the Japanese had "found." But what everyone wanted was magic, something of "pixie dust from Disney World." The focus was on quality circles, JIT (Just-in-Time Manufacturing), Pareto charts, SPC (Statistical Process Control), etc., that were sold as TQM or Total Quality Management. Dr. Deming never called it TQM himself,  The labels were all born from consulting firms in the U.S. The same problem appeared later with "Lean" label and Taiichi Ohno’s teachings. Ohno never called it "Lean." The movements (TQM, Six Sigma and Lean) have fallen victim to the tools rather than the thinking. Additionally, it seems that we also became more enamored with what Deming said, rather than advancing the thinking on the trail he and Ohno blazed for us.

So what is wrong with the tools? Nothing, and many of the tools developed for manufacturing have worked well, but what has been missing is the thinking that went into the tools. Someone invented them because they had a need. It seems that our collective brains have shut down, and new breakthroughs and tools have failed to be invented. The thinking never took hold. People still running around with Lean, Six Sigma and TQM tools looking for anything closely resembling a nail for the hammers they wield.

New (systems) thinking in service. Many of the tools in manufacturing have been used in service industry at great cost. John Seddon has pointed out in his book Freedom from Command and Control that the manufacturing tools do not work very well for service. He cites the "variety of demand" in service as being one of the differentiators. But Mr. Seddon does not stop there. He points out that the problem is a fundamental thinking problem born from the forementioned scientific management theory of Frederick Winslow Taylor. In essence, what Mr. Seddon references as command and control thinking (Taylorism) he proposes almost the opposite to do in the design and management of work for service organizations.

The battleground.  The mind of those that run or influence how organizations are run will be the battleground to change thinking.  Today’s economy brings up a lot of questions around how we have managed or mismanaged organizations.  Will the timing be better for people to look at the paradigms that make up their thinking?  Will those that are curious be able to look at the management paradoxes that are presented by the concepts of Deming, Ohno and Seddon?  Economic prosperity or starvation will likely be the deciding factor.  Those believing we aren’t on a decline in service and manufacturing will want the status quo and those that believe we have been on a decline for some time will look for change.  What will prevail in the management mind?  Time will tell.

Leave me a comment. . . I can take it!  Click on comments below.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

 

New Thinking About Layoffs and RIFs

Thursday, August 6, 2009 by Tripp Babbitt
OK, I’ll come clean.  It really isn’t "new" thinking.  I got it from The New Economics written by W, Edwards Deming.  In the United States, the dividend is the last thing cut (typically).  We will lay off people before cutting the dividend.  In Japan, the worker is the last to take the hit and rarely do they cut positions.  Consider what Deming outlined in the steps Japanese companies take (from The New Economics):
  1. Cut the dividend.  Maybe cut it out.
  2. Reduce the salaries and bonuses of top management.
  3. Further reduction for top management.
  4. Last of all, the rank and file are asked to help out.  People that do not need to work may take a furlough.  People that can take an early retirement may do so, now.
  5. Finally, if necessary, a cut in pay for those that stay, but no one loses a job.

Wow, quite a difference than the thinking in the US.  First sign of trouble with most US companies and the heads start rolling.  Can this be good for our overall economy or the state of our nation.  All those folks that complain about the inefficiency of the government we keep forcing people to use the government for unemployment checks, food stamps, medicaid, etc.  And by the way, more houses get foreclosed on and lessen our property values.

Toyota continues to stave off layoffs.  Who will be better off when the economy comes back?  The company that laid off a bunch of people and have to rehire and train or the company that hung on to workers?  Seems like a simulation game I played while getting my MBA.

I hear conversations from executives saying that we only laid-off the "dead wood" so this gave us a chance to clean house.  So, in the words of W. Edwards Deming, "Did you hire the wrong people or just kill’em?"  Meaning what part of your system hired the wrong people or is your system so poorly put together that no one could survive it.  Regardless, maybe executives should find a better leadership strategy.  With all the waste I see in organizations maybe a better idea for business cost reduction is finding better ways to manage and design the work.

Leave me a comment. . . I can take it!  Click on comments below.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

 

The Curious Case of John Seddon

Thursday, August 6, 2009 by Tripp Babbitt

In my life, I have had the pleasure of meeting some very famous people.  I went to Hanover College with Woody Harrelson.  I met many Indy 500 race car drivers like A.J. Foyt, Al Unser, Sr., Mark Donahue, Swede Savage, and Tom Sneva.  When I went to the ’93 Ryder Cup, I remember during a practice round striking up a conversation with the late Payne Stewart.

But the most memorable people I have had the pleasure of talking to are W. Edwards Deming and John Seddon.  I can safely say there are more differences than similarities between these two.  Dr. Deming had long forgotten probably more than I will ever know and he was not so dynamic in his delivery, but his message was undeniable.  More importantly, he pretty much said during his 4-day seminar that everything I had learned in my MBA program was well . . . wrong.  John Seddon on the other hand very spicy.  Likes to mix it up, calls them as he sees them and very dynamic . . . a stone that gathers no moss.

Long before I first met John Seddon, I read his book Freedom from Command and Control.  An excellent book, but John was not a statistician like Deming.  In a matter of fact, he is an occupational psychologist by education.  I was skeptical as any psychologist I had met in the US was usually associated with organizational development . . . and to quote Jerry Seinfeld "not that there is anything wrong with that."  Just my previous experience was that he probably would be having clients give group hugs and kick balloons to develop teamwork.  The book itself laid to rest quickly those thoughts.  So, like anyone curious enough to learn more, I flew to the UK and met him.

The first thing you learn is that John rarely beats around the bush.  He is hard-hitting and brutally honest.  More importantly, he is in unwavering in his message that to improve service thinking has to change for business improvement to be effective and sustainable.  This was the fourth leg of the System of Profound Knowledge that Deming didn’t have much of a background in.  John Seddon had spent time understanding Deming (and Taiichi Ohno), not from a book, but from practical research on why change management programs failed.  His application of Deming and Ohno had advanced the thinking.  Something that TQM, Six Sigma, Lean or Lean Six Sigma in the US has failed to do.  The problem was tools were preventing learning.  And management thinking has failed to advance as process improvement made things better for a while leading to unsustained business improvement.

The Deming User’s group I had been President of in Indianapolis ultimately shut the doors.  I am afraid that as great a man as Deming was he was never able to get the thinking to "stick."  The thinking was replaced by tools or arguments over what Deming said that really did little for us to advance the thinking.  Let’s give John Seddon of the UK some credit for doing what other great minds have failed to do . . . advance the thinking.

Leave me a comment. . . I can take it!  Click on comments below.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt

 


The Wall Street Journal’s Story on Starbucks and “Lean”

Tuesday, August 4, 2009 by Tripp Babbitt

Okay, I am glad that Starbucks is recovering and they have found efficiency in "lean."  But such articles (The Wall Street Journal’s article, "Latest Starbucks Buzzword: ‘Lean’ Japanese Techniques") should come with a warning label as people need to understand that copying Starbucks will be a huge mistake.  Lean manufacturing tools and the pursuit of the customer experience do not always go together.  Lean tools tackle the customer experience as an efficiency problem and some times it is and some times it isn’t.  Think about it . . . does every service organization want their customers flying in and out of their business as fast as possible?  I don’t think so.

Working with a bank in North Dakota I found that large groups of customers like to come in and stand around, eat cookies, have a cup of coffee, some conversation.  Could you imagine someone rushing them out the door in this setting?  The point is your service organization may need something different than Starbucks.  A Service company shouldn’t start to go nuts on "lean", "six sigma" or "lean six sigma" tools . . . like I know will happen anyway. 

"Lean" manufacturing tools really don’t transfer very well to service industry anyway (see: Lean Manufacturing is Not for Service Organizations).  The variety of demand gets in the way.  Although Starbucks is almost a "pseudo-manufacturing line" they will miss opportunities if they just have the "lean team" do the work for them.  They would be better off understanding the customer demand and purpose and allowing the front-line to figure out ways to absorb the variety of demand.  Business improvement need to be unique to each organization and their customers, demands, structure, management thinking, work design, technology, etc. it is what makes you different.  Copying will only lead to trouble.

So before every service organization runs around with stop watches and spaghetti maps, can we stop and think first before implementing "lean" manufacturing tools in service?

Leave me a comment. . . I can take it!  Click on comments below.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.
 


Can I Have Extra Celery Instead of Fries? No?!!

Wednesday, July 15, 2009 by Tripp Babbitt
Yesterday, I went to a Buffalo Wild Wings to meet a friend of mine.  I had decided on the wings, celery and fries combo.  Only I didn’t want the fries, so I requested extra celery ( keeps the weight down).  The response was shocking . . . my waiter responded, "Our computer doesn’t allow us to put in extra celery, would you like a salad instead?"

Wow!  This person now becomes my example of how entrapping technology can become at service companies.  Yet, I see this everywhere with standardization done to make software coding easier, "standard work" and "5S" accomplished with "Lean tools", scripts, standard product offerings, SOP, etc.  Systems designed to make life easier for management, the vendor, etc. but incapable of absorbing the variety of demand that service offers.  Customers left shaking their head as to why they can’t get what they want, even when it is just extra celery.

Be it bank management consulting or customer service consulting the theme runs through most service organizations that I have worked with.  A strong belief that these standardizing activities actually save money when in reality they drive customers away or at least left scratching their heads.

Some people will say we have a people problem here.  Really?  The system was built to entrap and this person didn’t know how to deal with the variety.  I don’t know why the system entrapped the waiter, could be they have had shrinkage in the celery inventory or other areas or some management dictate that all orders have to be in the computer would probably be my first guesses.  But I am sure there was something in the system that didn’t allow me to get my "extra" celery (what we refer to as system conditions) and the individual was following orders that conflicted with my demand.

Standardization in service as a place to start is misplaced.  Organizations "saving money" may be losing customers or may be promoting other dysfunctional activities that add costs.  We believe a better "systems thinking" way is to understand customer demand by going to the work and finding out "what matters" to the customer and designing a system against demand.  Don’t you?

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

Systems Thinking: A Personal Affront?

Friday, June 26, 2009 by Tripp Babbitt
Some of my posts have caught the eye of several folks who have decided that my blogs are a personal affront.  Most of these people, I don’t even know . . . but they write like they do.  They are offended or even irked  by my posts.  I don’t believe I have attacked any one person ( I have mentioned a few) or any one company (ditto), but most of my writing has been about the thinking of those people or companies.  I don’t blame them for thinking in a command and control manner, what I aim to do is point out that there are better ways of thinking . . . for me that is systems thinking as defined by the likes of W. Edwards Deming, Taiichi Ohno and John Seddon.  An American, a Japanese and a Brit, I’m sure there is a joke in there somewhere.

There is a history here that tells me that we are not evolving and learning in the US.  Sub-optimization and waste is rampant.  This waste is as disgusting as any of the nastiest scum at the bottom of the barrel, sewage treatment plant or the the flatulence of Uncle Bill at Thanksgiving.  We all seem to react the same way by ignoring the unsightly scum, smell or Uncle Bill.  Organizations come up with new change management  programs that amount to no more than rearranging the deck chairs on the Titanic . . . might feel like you are doing something important, but in the end the ship sinks.

As a self-declared "reformed" Lean Six Sigma Master Black Belt I have witnessed many "real" improvements, "show" improvements, "no" improvements and way too many "we thought we were improving, but we were really only making things worse" improvements.  The problem I witnessed was that the "real" improvements were compromised by later executive thinking that undid what was just improved (no sustainability) because of command and control thinking.  "Show" and "no" improvements were made to be sure that a project showed savings even if they weren’t real.  But my favorite was always the category of "we thought we were improving, but we were really only making things worse" improvements where we would sub-optimize one part of the system for "savings" only to make things worse somewhere else in the system, making one/function/team/company hit their target and one (or more) others miss theirs.  This can not be helpful.

So, the options were to stand idly by and continue to know the truth and not act or do something about it.  I chose to act, communicate, blog post, tweet, and speak to find other voices that have found the same thing.  Along the way, someone will be offended as belief systems are being challenged.  Writing and speaking against the assumptions around outsourcing, shared services, IVRs, technology, targets, incentives, scientific management theory and other damaging beliefs are bound to grab the ire of many (if not most) people.  Some because their livelihoods depend on it, some because they can’t imagine a better way or that they have been doing something wrong for all these years.  The reality is to me it is not so much that they were doing it wrong, just that is the way they knew, now there is better thinking and there will be something beyond this thinking.

The great part about systems thinking is that I can show you in your system why command and control thinking doesn’t work as well.  As this requires an unlearning and re-education where the work happens not just in a classroom.  The risk of being caustic far outweighs the benefit an organization can capture from new thinking.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

How Do We Become a Systems Thinking Organization?

Monday, June 22, 2009 by Tripp Babbitt
A natural question for the curious is "how to do something."  What are the steps to becoming a systems thinking organization?  The answer I will leave you in this blog will be somewhat of a paradox consistent with the discipline itself.  First of all, you can’t copy another organization, each organization is unique and part of systems thinking is understanding that copying  can lead to more problems.  And it was Dr. W. Edwards Deming that said that it is difficult for an  organization to see itself.  So combining theory and knowledge the Vanguard Method takes organizations through a learning model that requires an unlearning and relearning method to change thinking.  We believe that this is best done with the work so one can see the waste and inefficiency in your organization.

Someone might say that this is awfully convenient to have to hire a consultant to do it right.  So, we offer much in the way of self-guided learning, as we also believe that an organization must change willingly.  We do not use coercive or rational methods to learn.  This is long-term counterproductive.  Here are some recommendations to becoming a systems thinking organization. 
  1. You must be curious.  If you are trying to rationalize systems thinking against other disciplines like lean six sigma you are off on the wrong foot.  As a "reformed" lean six sigma master black belt, I can tell you this journey will be like nothing you have gone through before.
  2. Read the books.  Systems Thinking in the Public Sector for government and Freedom from Command and Control for the public sector.  These will help in understanding what is involved with practical examples.
  3. Read the Fit for the Future series.  This is a series of six management articles to help an individual understand systems thinking and takes you through (step-by-step) some of the general elements.
  4. Download and read Understanding Your Organization as a System.  This is for the diehard lots of information on how to look at an organization and more importantly it is a free resource.
  5. Other downloads.  There are other downloads currently available from Rain University.  Using Measures for Performance Improvement, Transforming Call Center Operations, Process Mapping and Analysis, and Managing by Walking Around are all available for purchase.
So no matter what, there are plenty of resources to help you improve your change management methods.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.





Peter Pan’s Shadow

Friday, June 19, 2009 by Tripp Babbitt
People who know me understand how much I love everything Disney.  Disney World andMe and Minnie! Disney movies always take me back to a simpler fantasy world away from the realities of business and life.  I couldn’t wait until my kids were old enough to watch Disney movies mostly so I could watch them with them and relive the fantasy world I so enjoyed as a child.  And to see my children wide-eyed at their first sight of the Magic Kingdom and Mickey.  It is a great experience as an adult even though the highlight for my children now-a-days is who gets to push the elevator button first.

One of my favorite movies is Peter Pan.  The symbolism of Peter and his shadow is the movement from a fantasy world to the world of reality.  Since the great victory the US had in WWII, we have been fortunate as a nation . . . living a fantasy if you will.  With Europe decimated, the world turned to our country for most of its goods and services.  A productivity mindset set the stage for the next 25 years to meet the world’s demand.

W. Edwards Deming rejected in the US went to Japan to start the next generation of thinking moving a country from one of command and control thinking (productivity mindset) to systems thinking (quality and improvement mindset).  The start of the Japanese Industrial Miracle had begun.  By the 70s the US was in a crisis, the auto manufacturers were under attack.  Deming returned from Japan with a new message and new thinking that was watered down into tools . . . if we could just copy what the Japanese did we would be back on top.  The Japanese understanding the change was systemic invited the Americans to their plants to see what they had done and the Americans left with tools.  Later, another group of Americans went to Japan to see what Taiichi Ohno had done in the development of the Toyota Production System (TPS) and called it "lean."  The lean toolkit would follow and again the need for a change of thinking was missed.  Three opportunities to change thinking and three opportunities missed, if this were baseball we would be "out."

Business improvement has turned into classes of certifications and tools for lean, six sigma and lean six sigma that does little to change thinking.  The command and control, productivity mindset still prevails today.  I am afraid that even the current crisis will not awaken the US and the deterioration of our ability to compete continues to diminish.  I see it in my networking meetings where people once in manufacturing are now selling homes or work in service industry now.  If we don’t change our thinking, what is left after service?

For the curious, my blogs, management articles and website outline different thinking that must occur to compete internationally.  We are left with a choice we can continue to live in the fantasy world of the command and control, productivity mindset or begin the process of reattaching our shadow (like Peter Pan) and live in a world of reality.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.



Semmelweiss Syndrome: A Barrier to Business Improvement

Tuesday, June 2, 2009 by Tripp Babbitt
Assuming most readers of this blog have some familiarity with systems thinking from my previous 100+ blogs may be a stretch, but the question came up a few times last week as to what is preventing companies from achieving business improvement by adoption of new thinking? 

Let’s start with one Ignaz Philipp Semmelweis a mid-1800s physician that worked in a Vienna hospital where almost 1 in 3 women would die after childbirth of "childbed fever."  The reasons for the deaths were things such as "wounded modesty", "guilt and fear complexes", "cosmic influences" and "sudden changes in weather and temperature."  Dr. Semmelweiss wouldn’t buy any of it and set out for a cure.  Through a freak occurrence a physician friend died after accidentally cutting himself dissecting a corpse.  the symptoms were strangely similar to that of childbed fever.  With no knowledge of infection at the time, Dr. Semmelweiss was able to conclude that physicians were commingling infection one patient to another through the physicians themselves.  His discovery was nothing short of brilliant, he found that by having physicians and other care givers wash their hands the death rate spiraled down to almost zero.  But Semmelweiss ran into a problem (even with data) he was labeled a "nut case" because of his insistence on hand-washing.  The physicians of the day just couldn’t accept that they had been killing their patients because of their lack of hand washing.  Political pressure dumped the hand washing, the death rate went back up and Semmelweiss went crazy.  Having a better way and knowing that changing thinking is hard for people to believe . . . if it was that easy they would have discovered it by now. Thus, the "Semmelweiss Syndrome" that I am coining right here in this blog.

Individuals and organizations have invested heavily into training for Six Sigma, Lean, TQM, ISO and other organization change management programs.  I can’t say they haven’t improved things, but as a "reformed" Lean Six Sigma Master Black Belt I can only say that we are doing the wrong thing righter.  Until we begin to address the fundamental thinking problem of command and control thinking, we stand little chance of sustainability or large leaps in improvement.

The organizations that deliver the training are also a barrier, they are doing quite well thank you.  The last thing they want to hear is that their training is outdated and there are better ways to achieve improvement.

I don’t know what the future holds, I am hopeful that I don’t wind up like Semmelweiss.  Despondent (and (somewhat mad) he wound up cutting his hand and thrusting it into a corpse, within three weeks he had died of the same disease he had tried so hard to defeat.

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.  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/TriBabbitt.

Changing Culture in Hard Times . . . the Easy Way

Monday, June 1, 2009 by Tripp Babbitt
I have heard over and over agin HR professionals fretting over the culture of their organizations.  To me it is puzzling, why is there low morale?  You mean the secret formula hasn’t made it to your ears or eyes?

OK, I’ll let you in on the secret.  The problem is that our thinking is old, not Civil War old mind you, but I consider anything pre-Titanic old.  We have based our thinking on that of Frederick Winslow Taylor and AP Sloan.  So what does that mean?  It means that we have functional separation of work and separated the decision-making from the work and the worker.  It means we have introduced entrapping technology to dumb down the worker so that they check their brains at the door.  It means we have built systems with scripts, policies and procedures that that allow little opportunity to innovate or serve the customer.  It means hitting financial and performance targets that we know degrade service to the customer, but allow the worker to achieve an award for poor service and increased costs.  All of this is command and control thinking at work.

So what if we thought differently about the work? You know, made it more interesting.  Put the decision-making back with the work instead of some management report that can’t tell you what is really going on.  Gave the worker new measures that weren’t top-down, but outside-in allowing the worker to figure out the best way to serve the customer and liberating method.  Allow the worker to pull technology that enables their work vs. the push method that entraps them. Now that would be cool for any organizational change management program to do all that!  There is a method for doing all this called systems thinking.

However moving from command and control thinking to systems thinking requires us to take a different approach then what ISO, Lean, Six Sigma, TQM or other change management programs have to offer.  Culture really isn’t that hard to change, are you ready to think differently?

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.  Download free from www.newsystemsthinking.com "Understanding Your Organization as a System."   Reach him on Twitter at www.twitter.com/TriBabbitt.

Lesson: Technology Couldn’t Save GM and Won’t Save Service

Monday, June 1, 2009 by Tripp Babbitt

With all the advancements in US technology shouldn’t GM, Ford and Chrysler just been kicking the daylights out of all the competition? What lessons can we glean from GM, that at one point owned EDS.  GM had all the latest in software and hardware.  I am not here to dispute there were or weren’t other factors at work that caused GM to fail.  But let’s own the fact that the US technology advantage didn’t make a difference here and won’t for service either.

With regards to GM, I have read on more than one occasion how Toyota (the nemesis of the Big 3) actually saw more failures in technology and pulled them out in favor of manual processes (from The Toyota Way by Jeffrery K. Liker).  WOW . . . that’s an eye-opener try selling technology around that philosophy.  Toyota was always behind the Big 3 in technology, because they understood that it wasn’t an advantage and in most cases a waste in resources.

It’s been a long-time since I have worked in manufacturing, which seems to be dying in the US like a dinosaur.  I have learned over the years that in working with service organizations they are in a frenzy to find the latest technology to give them (gulp) . . . a competitive advantage.  It’s like the "fountain of youth" do you really want to spend millions on something that can’t deliver?

Let’s face it . . . IBM, HP and a host of other companies are making tons of money showing lots to their bottom line.  The promise of technology just doesn’t live up to the hype.  They certainly have lots of money for advertising and boondoggles (conventions, advisory board meetings, etc.). They make you feel good, but fall short of making your service organization better.

A better technology change management program is at hand, a systems thinking approach.  Let’s take a page from Toyota and first improve processes without technology or consider technology as a constraint.  Then pull technology if it will enable the work to be performed better.  Service organizations will achieve corporate cost reductions on from not trying to automate work that is better off being done manually.  Something you will not hear from your technology vendor.

Service organizations have an opportunity to learn from both GM and Toyota.  Which would you rather be right now, GM or Toyota?

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.  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/TriBabbitt.


 


Wake Up, America!

Monday, May 18, 2009 by Tripp Babbitt
One of my favorite movies is Tora! Tora! Tora! when after the attack on Pearl Harbor Japanese Admiral Isoroku Yamamoto declares "I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."  We are experiencing an economic Pearl Harbor that up to this point had been a slow drip of wealth and economic power from the United States. 
 
Now we have a full blown crisis, the second major one in my lifetime.  The first was the decline of manufacturing in the US that started after the "Japanese Industrial Miracle" created in large part by an American W. Edwards Deming.  A traitor . . . no, he saw that the US after WWII was engaged with filling the world’s need from product and not interested in new (and better) thinking that had already been proved during the war effort.  Scientific management theory (Frederick Winslow Taylor) won out, productivity over continual improvement.
 
The second crisis is now.  Manufacturing is just about finished in this country.  People wrongly believe that this is because of labor costs, so we outsource and share services to reduce costs.  The "Big 3" automakers (I use that term loosely now-a-days) did. They outsourced and cut costs and still could not compete.  So, the focus of reducing costs has been a non-starter . . . a loser.  What sells cars or service or anything else is the ability to provide value to customers, slashing costs is the beginning of the end.  How fast the end comes is dependent on the size of the organization and the management dolts that can cut costs as their primary focus.  Never knowing how to create value, after all any moron can cut staff . . . but to build value?  That takes talent.  That is leadership.
 
Dr. Deming, Taiichi Ohno, John Seddon and others have offered us a better way.  It requires different thinking than the command and control mindset that still prevails since the manufacturing crisis.  Lean Six Sigma, A3, FMEA and all the tools will not lead us out of this crisis.  New thinking is required about management, work design, measures, technology, outsourcing, benchmarking, shared services and command and control thinking in general.
 
In 1988 Konosuke Matsushita (Founder of Matsushita Electronics) is quoted as saying this to the US:
 
"We will win, and you will lose.
You cannot do anything about it because your failure is an internal disease.
Your companies are based on Taylor’s principles.
Worse your heads are Taylorized, too."
 
So when will the sleeping giant awaken?

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.  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/TriBabbitt.

Service Metrics: What You Need to Understand

Monday, May 4, 2009 by Tripp Babbitt

I overheard a fellow say "I’ve got Deming’s principles down pat, now all I have to do is understand this variation thing."  Hmmm, Dr. Deming was a statistician and his philosophy did come from his understanding of variation as taught to him at the Western Electric plant (Chicago, IL) in the late 1920s from Dr. Walter Shewhart.  What W. Edwards Deming learned was how to evaluate data using a statistical process control (SPC) chart.  To me, the difference between knowledge and tampering or guessing.

Early in my career I was a corporate director of operations where I learned to evaluate income statements and compare last months revenue, expenses, etc. to this months and all types of dictates and commands came from this naive view of data.

After attending Dr. Deming’s 4-day seminar and learning from the likes of Dr. Don Wheeler and Dr. "Frony" Ward, I learned a better way to manage with data.  In statistical terms understanding the differences between common and special causes of variation.  Let’s pretend we have sales of 15, 19, 14, 16, 12, 17, 15, 17 and 11 (in thousands).  A manager might conclude that the month with 19,000 in sales is a celebratory moment best month on record and the last month with 11,000 is reason to "bark" at the salespeople for poor sales. 

By plotting data using the SPC chart (below), we can tell that we can expect anywhere from 5.1 (LCL-Lower Control Limit) to 25.1 (UPL-Upper Control Limit) with an average of 15.1.  A manager celebrating 19,000 or getting upset over 11,000 is foolishness.  In a matter of fact, we can expect between 5,100 and 25,100 (the control limits) in sales and it wouldn’t be unusual.  This is called common cause variation.


Common Cause Variation



Conversely, if the next month showed 28,000 in sales (see chart below) this would be outside the UCL (Upper Control Limit).  The $28,000 month is unusual (outside the limits) meaning we have a special cause.  Something unusual has happened.  Now is the time to investigate the reason there is overwhelming evidence that we should investigate the "special cause."  There are other indicators of special causes (run of 8 and others) that need to be accounted for, but this is a blog.




Not understanding the differences between common and special causes leads a manager to tamper with the system.  Dr. Deming outlined two types of mistakes:

  1. Reacting to an outcome as if it came from a special cause, when it came from common causes of variation.
  2. To treat an outcome as if it came from common causes of variation, when it was from a special cause.

A systems thinking organization (or any other organization) must understand the differences between special and common causes of variation in order to manage effectively.  Leadership development, organization change management programs and even technology implemented devoid of these basics are keeping service organizations from making better decisions.  This isn’t just for Lean Six Sigma Black Belts and Master Black Belts, we all use data.  We must know how to use this data to make better decisions and avoiding the mistakes Dr. Deming warned us about.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free "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/TriBabbitt.


Beware of Common Sense

Thursday, April 30, 2009 by Tripp Babbitt

I have often been accused of my lack of "common sense."  Which makes me proud of my "uncommon sense."  So let’s take a look at what types of things are "common sense" in the world of the command and control thinking service organization:

  • Ranking workers, units, teams and departments
  • "Carrots and Sticks" for workers
  • Quotas, targets and arbitrary numerical goals
  • Performance appraisal of the worker,manager and executive
  • When service fails . . . take action
  • Rewards, incentives and bonuses for salespeople, workers and managers
  • Using lean manufacturing tools to improve service
  • Standardization is the place to begin service improvement efforts
  • Outsourcing, technology and/or shared services reduce costs
  • Economies of Scale
  • Separation of the decision making from the work
  • Divide the work into functions
  • Use an IVR for customers to save costs
  • Use reports to make decisions about the work
  • Do lots of inspection to improve quality of service
  • Hire the cheapest workers for the front-line
  • Keep the skilled workers away from service customers
  • Make decisions based on last month’s financials
  • Create competition between workers, teams and departments to increase production
  • Use scripts, policies, procedures, mandates to manage the workers
  • Motivation of employees
  • There is a trade-off between good service and costs (zero-sum game)
All of these make "common sense" to every service organization.  The problem is they all lead to higher costs and worse service.  The management articles/blogs that I have written to date have talked about the problems of each one these.  As a whole they create a management paradox to achieve "uncommon sense" (counter-intuitive ideas).  Innovation leadership means applying new "systems thinking" in our leadership strategy to accomplish new heights.  A service organization can not learn by reading alone, it requires understanding by doing.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free 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/TriBabbitt. Let us show you what you cannot see.

Time for a Different Approach for Service Improvement

Tuesday, April 28, 2009 by Tripp Babbitt
I have talking to several service organizations that want to know more about systems thinking.  Some have Lean Six Sigma, Lean, Six Sigma, TQM, technology, customer service training, etc. or some combination of these.  Most of the Lean Six Sigma folks I have spoken with are already coming to the conclusion that  LSS does not work the same for service organizations as it does for manufacturing.  I command for recognizing this.  Others are disappointed in their inability to sustain the improvements.  One executive described their efforts as "we fix one problem only to create 2 – 3 more and the ones we fix are broken within a few months."

As a "reformed" Master Black Belt in Lean Six Sigma I can tell you that LSS has many shortcomings and have blogged about many of them. Other efforts in customer service training fail in other aspects as they assume the problem is with the worker only.  The reality is the problem lies in the system . . . the people, the technology, the work design, motivation, decision-making process, etc.  I have seen people attempt to make things better, but not change their thinking about the causes of waste.  Their organizational change management programs focus on the symptoms and not the causes of these wastes.



To have sustainable improvement organizations must choose a path. One leads to more tools and treating of symptoms . . . or for those that believe they are improving . . . "doing the wrong thing, righter."  The other path is a systems thinking approach that leads to better thinking and treating the organization as a system.  You have a choice.  You may want to know your options.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free 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/TriBabbitt.

Lean Manufacturing is Not for Service Organizations

Friday, April 24, 2009 by Tripp Babbitt
One thing I have learned from John Seddon (and Vanguard Consulting Ltd. my partners in the UK) is that that tools of manufacturing do not transfer very well to service organizations.  Personally, I have always started with concepts and principles before tools, but command and control thinkers want the quick fix . . . so to the tool kit we go to for immediate results.  The problem is that there are differences between service and manufacturing.  With more and more lean manufacturing people moving to service they don’t distinguish the difference.

So let’s establish the one big difference and it is in variety of demand.  The lean manufacturing folks love to start with 5S.  A tool that is used to provide a standard workplace environment, establishing standard work and the removal of waste.  The philosophy is comprised of order, organization, discipline, elimination of bad habits and wasted effort.  This leads to the standardization of work, wholly the wrong place to begin in service because of the variety of demand that customers bring to service organizations.  This creates failure demand when the standard process is unable to absorb the variety of demand that customers bring.  Command and control thinking managers love standardization because this allows them (typically) to blame the worker for the non-standard events, plus this allows them to do planning and resource management unaware of the need to separate the planning and operation management.

Requirements for workers to meet standard times and work measures known as targets give us plenty of examples for this misconception.  Dr. W. Edwards Deming showed us how to deal with variation and stood against the targets promoted by lean activities.  An understanding of variation is in order to avoid tampering with the systems they work in.  Unfortunately, this leads to increased costs and a drop in customer satisfaction that is a spiral adding more costs and decreased service to customers as the system becomes more burdened with command and control decisions.

Business process improvement and corporate cost reduction in service industry is best done without the influence of Lean or Lean Six Sigma manufacturing tools.  They miss the point of variety in demand in service industry and lock in costs with their standardization activities.  There is a better way.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free 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/TriBabbitt.





50th Blog: My Personal Manifesto

Thursday, March 26, 2009 by Tripp Babbitt

One of my favorite movies is Biloxi Blues not so much for the film, but it gave me a tag line for my life purpose.  "Don’t ever compromise your principles or you become a candidate for mediocrity" as spoken by Arnold B. Epstein.  There have been many opportunities to "pack it in" and not follow the path less traveled, but someone has to stand up and say there is a better way, when there is.  Frustration in getting to change people’s paradigms goes with the territory.

I without doubt believe that Dr. W. Edwards Deming felt that same frustration after WWII when he had been so successful during the war effort improving manufacturing.  The decimation of Europe during WWII  left the world only one place to go for their goods . . . the US.  So the mantra became give the world what they want as fast as we can, not as well as we can.  The principles of Frederick Winslow Taylor (scientific management theory) were followed here in the US and things went well.  Until Dr. Deming was invited to Japan to help rebuild.  This culminated in the Japanese Industrial Miracle and Japan’s rise in the automotive world and the decline of Ford, Chrysler and GM in the 70s.  Now Dr. Deming was invited back to the US to help save the manufacturers in the US.  In Out of the Crisis he would write about 14 Points and 7 Deadly diseases for the transformation of industry.  Later in The New Economics he boiled these points down to his System of Profound Knowledge (Appreciation for a System, Theory of Variation, Theory of Knowledge and Psychology).  Except for the "tools" the fundamental philosophy has been rejected as Dr. Deming called for such things as abolishing performance ratings, inspection, incentives and bonuses.  All ideas rejected by US industry today.

It wasn’t until John Seddon that I found hope for this better way.  Not where I thought enlightenment would come from . . . an occupational psychologist that studied why organizational change management programs failed.  They failed because the fundamental thinking never changed.  We (the US) never changed its thinking about scientific management theory and we still have the notion that organizational change management has something to do with "tools" found in Lean, Six Sigma or Lean Six Sigma (I have been down these paths they will bring some improvement, but not to the level in which systems thinking will).  I commend him for this simple yet profound find and his ability to work with service organizations to make a huge transformation for companies that are curious for a better way.

For me, I will continue to correct wrong thinking (command and control) that continues to paralyze service industry and stifle private and public sector innovation.  Instead, there is a better method a "systems thinking" one.  Proven over and over again to be better and more profitable than command and control thinking.  Won’t you join me?

You get started by downloading "Understanding Your Organization as a System" (it’s free), read articles from my website or twitter me (tribabbitt).


Time to Dump the Toolheads in Service Industry

Wednesday, March 25, 2009 by Tripp Babbitt
The toolheads are the ones pushing Lean, Six Sigma or Lean Six Sigma with massive training on tools that only a command and control manager could love. The ones with more tools than an electrician, auto mechanic and lathe maintenance operator put together.  I know . . . my name is Tripp and yes I was a toolhead.  BB and then MBB in Six Sigma.  Somewhere between W. Edwards Deming and John Seddon I lost my way.  Dr. Deming and Taiichi Ohno never talked about tools so where did we stray away from the Yellow Brick Road of business improvement? . . . in a word "tools."

First the labels came with "continuous improvement", "six sigma" and "lean."  Deming and Ohno never called them these things the people who did were more marketing than thinking.  We rejected Demings call for the elimination of things like short-term thinking, ceasing dependence on inspection, elimination of work standards, slogans and MBO, breaking down barriers between departments and getting rid of performance appraisals, rewards and incentives.  All barriers to making his system of profound knowledge relevant and US companies competitive.

The new age has begun, this age will require a change in thinking that Ohno and Deming understood.  We can’t continue down the path of toolheads finding a place to apply value stream mapping or hypothesis testing without first understanding the thinking that must accompany it.

Learn more by downloading "Understanding Your Organization as a System" for a new beginning to a change of thinking . . . need a label? "systems thinking"

Only Humans can Provide Good Customer Service

Tuesday, March 17, 2009 by Tripp Babbitt

I have seen it over and over again in service organizations.  The over-prescribed use of information technology in service.  I have already blogged about The Evil of Information Technology.  Where two command and control systems (buyer and seller of technology) create a scenario that almost ensures creating waste.

The issue at hand is that good customer service is pulled from service organizations at the points of transaction (or I like to call them "touchpoints").  These often ignored front-line workers ARE the company to most customers.  How well the customer management process performs at the touchpoint is crucial to the performance of the organization.

"Lean" manufacturing likes to standardize as the first step and those using "lean" service like to start here also.  This is wrong first step in service industry.  Service customers bring a variety of issues to the table and standardization makes the customer fit into the company’s process, where what the customer wants is the service company to absorb their different varieties of demand.  With technology change management leading the way with scripts and coding to "standard work" service organizations can not absorb this variety of demand.  Worse, the software has locked in the waste.  Why?  Because when customers don’t get what they want they either go somewhere else or they complain and/or call back to get the service they seek (failure demand).

Organizational change management in service begins with understanding the work (beginning at the touchpoints) and the ability to absorb the variety of demand posed by customers.  This variety can only be absorbed by a human, not technology or scripts or standard work.  Command and control managers believe they should be the ones making decisions about the work . . . the work that they don’t understand.  A systems thinking manager understands that the best person to make decisions about the work is the worker and the job of the manager is to work on the system.  Only a human can absorb the variety of demand from customers and the human worker should determine what technology, scripts, standard work, etc. will be valuable to enhance the service.

It’s the System Stupid

Tuesday, March 10, 2009 by Tripp Babbitt
I actually prefer ignorant to stupid, because the only thing that can end stupidity is death.  However the title "It’s the System Ignorant" doesn’t have the same ring to it.  So I will stick with stupid and let you sort yourselves out.

I have talked a lot about command and control thinkers in my blogs.  This will be no exception these are folks that use their financial resources for technology (CRM, BPM, IVR systems, etc.), outsourcing, shared services, lean six sigma training and tools, strategic plans, PowerPoints, contract analysis, developing financial targets, organizational change management programs (new one year after year), balanced scorecards and performance appraisals.  Like sheep they follow the "leader" or best practice making assumptions that these directions make sense and copying the leader has to be good for their business.  The focus is on results and corporate cost reductions almost always leading them to higher total costs.

The systems thinker focuses on customer demands looking at the organization from the outside-in (not top-down or bottom-up).  They realize that giving the customer what they want (value) will reduce costs, not increase them.  Systems thinkers understand that studying this demand in terms of type and frequency and value/failure will lead to a better system.  They understand the concept of variation and the difference between common and special causes of variation in the analysis of data. Systems thinkers understand that the worker is responsible for 5% of the performance of the organization and 95% of performance is the system . . . stupid.