Good Management or Good Fortune?

Monday, September 21, 2009 by Tripp Babbitt

I just finished an ezine management article about American arrogance and our collective inability to change thinking, especially management thinking.   My belief is that we are still basking in the sun of our tremendous wealth that was produced between 1950-1968.  All until the Japanese came along and ate our collective lunches.  Bye! Bye! Manufacturing! But that’s OK we have service right?

Service industry with a huge competitive advantage in technology.  Oops! We outsource software development and hardware manufacturing.  After all, good management means a good IT outsourcing strategy to other countries.

Good call center management means that we lower transaction costs to add to that bottom line.  What fool wouldn’t want bigger short-term profits to hit that quarterly dividend target or bonus? 

Unfortunately, just like the Mesabi Iron Range . . . the cream is gone.  Our management style no longer achieves innovation leadership.  Instead we follow in the wake of our short-term thinking.  All the while thinking how great US management is.  Except for the awakening that we have fallen behind because we mistook good fortune for good management.

Leave me a comment. . . what do you think?!  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.

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.



Looking for ROI . . . in All the Wrong Places

Thursday, June 4, 2009 by Tripp Babbitt
I recently have come across an number of management articles on different internet sites Rot the boy next doorwhere people are advocating ROI.  I like ROI . . . it’s like a phonetic spelling of "Roy", the measurement next door and the boy next door.  Sometimes that can be a good thing or a bad thing.  The measure (or neighbor) that is misunderstood and sometimes annoying.  I digress.

I have seen ROI used to measure projects, departments, units, sales, people, contracts, etc.  The worse use is looking at a part of the company and asking for an ROI.  A call center is easy to talk about here because most everyone believes this is a part that can be easily outsourced or shared (bad assumption), so let’s pluck this piece off and show an ROI.  This is command and control thinking at work . . . separate the pieces and optimize them. 

With call centers, a lot of their demand (calls) is not created by them.  I have submitted in other blogs and posts that between 25% and 75% of their demands are failure demands (chase calls, problems, etc.).  Sometimes they are created by the call center, but more often then not they are created by other parts of the system.  Meaning they don’t create their own demand, so why is that even important?  Because scientific management theory is all about optimizing parts.  But optimization of each part does NOT make the system better, it suboptimizes at the expense of the whole system.  You can’t have a 120-piece orchestra with 120 prima donnas (well you can, but no one would want to hear it).  Systems thinking understand this is all foolishness and what matters is the system.

OK, reality check time.  The call center is part of the system, you know the organization.  So are the sales department, operations, finance, HR, etc.  I love the one about HR being a profit center needing to show ROI.  But I have seen such stupidity and that’s why it gets outsourced a lot, it’s seen as an expense and not a valuable part of the system.

The problem is not just the stupidity, but the waste that goes along with it.  We have department chargebacks, competitions, finger-pointing, turf battles, revenue allocations . . . it’s all just waste.  There is no value in all this activity except to hire more bean counters.  The only ROI that really matters is the company ROI, meaning at the end of the day did the organization provide a product or service that had value from a customer perspective.  If they did provide a value product/service that customers wanted with little waste . . . ROI will find himself right next door where he lives and maybe just not be quite as annoying.

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.

Misconceptions: W. Edwards Deming and Systems Thinking

Monday, June 1, 2009 by Tripp Babbitt
I find it interesting that the most quoted Deming phrase on Twitter is "It is not necessary to change, survival is not mandatory."  This is probably because Tony Robbins used it.  I have added another series of Deming phrases and one this past week drew many questions, it reads:

"For Quality:
Stamp out fires, automate, computerize, MBO, install merit pay, rank people,
best efforts, zero defects.
Wrong!!!
Missing ingredient:
Profound Knowledge."
 
 

Too often I have seen folks try to fit Deming into their own paradigm rather than realizing he was on a whole different plane of thinking.  We are guilty of making Deming what we wanted him to be, instead of who he was.  Hopefully, this will encourage people to read Out of the Crisis and The New Economics

I first went to one of Dr. Deming’s four-day seminars back in 1987 and saw him him many times there after.  The problem with this is I (like many Deming supporters) got more enthralled by the man, rather than the thinking.  This made it easy to make him be what fit our existing paradigm where he really wanted to change our mindset.

History has shown that the "sticky" issues have long been ignored.  We still automate or overuse technology whether we need to or not.  Many organizations are still using MBO.  Merit pay and ranking people are still in place to "motivate" people.  We still try to overcome systemic business problems by best efforts and zero defects.  The thinking never changed.

I have written many management articles and blogs regarding systems thinking where hopefully I am addressing more of the thinking than the man without ignoring Dr. Deming’s tremendous contributions. Like his System of Profound Knowledge (from The New Economics): appreciation for a system, theory of variation, theory of knowledge and psychology.  They all teach us a different way to think and in a management paradox to the way management currently thinks.

This is my 100th blog. I am hopeful that we can begin to address the fundamental thinking problem that stands in the way of a majority of organizations.  The conventional wisdom of command and control thinking has all the momentum. But to quote Socrates: "You can’t find the truth by counting heads" and so our search for profound knowledge continues.

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.
 

 

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.

Donald Trump Against Rewards and Incentives?

Wednesday, April 29, 2009 by Tripp Babbitt

Are you kidding me?  Donald Trump one of the icons of American Capitalism was speaking against bonuses and incentives (listen – for the impatient folks go to about the 3:00 minute mark).  Bankers making $40 million plus while not even being very good bankers.  These are sales people manipulating the system for the rewards and incentives and who put these systems in place?  Command and control thinking is responsible for this.  Bad loans to achieve the reward or incentive.  Makes you kind of miss the old "boring" bank.

While doing bank management consulting I worked with a regional bank that was moving from the old "boring" bank to become a "bigger" bank and needed to act like a big bank.  They got rid of the old bankers because they weren’t being aggressive enough in their selling.  They needed rewards, incentives and salespeople not bankers.  Oops! they were caught up in the mortgage crisis with this knew aggressive approach.  They are still trying to dig themselves out, the problem is the management doesn’t see what is wrong with their "new" thinking (which is really old).

Most banks stayed clear of the bad loans that started this crisis and have stayed the course.  I would like to see these banks reap the benefits of "boring" banking.  Give them the TARP funds and let the knuckleheads fail.

Rewards and incentives had no small role in the current crisis.  They always get you less.  The sub-optimize the system and get people focused on defacto purposes not related to the real purpose . . . to serve their customers.  This sub-optimization is costing them in higher costs and worse service. 

The leadership development of banks need to include systems thinking as part of their organizational change management programs.  Only then, can they begin to eliminate waste and improve service.  I have several management articles associated with this and banking worth a gander, see this link.

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
 

 


Systems Thinking Management Articles

Tuesday, March 3, 2009 by Tripp Babbitt

I have gotten the feedback that my FREE download (Understanding Your Organization as a System) is too long (160 pages) and has way more material than be possibly consumed by one human.  I apologize for my partners (Vanguard Consulting Ltd.) that wrote the work with all the exercises and information.  They have a tendency to write on and on with disregard for command and control thinking and pointing out the problems that businesses encounter such as outdated thinking like using scientific management theory.  After all they come from the land of queuing and fly tipping.  They even go way to far talking about what to do to get started to improve your business . . . bastards!

For those of you that do better with smaller bites, I am offering links to management articles that provide the same general information on systems thinking as the download.  The Fit for the Future series is partitioned into smaller, more palatable bites (six in all).  This way you can still watch Family Guy and the Simpsons without missing a beat.  These are 15 minute reads each and for slow readers like me maybe 20 minutes.

Here are the links:

Fit for the Future – Part 1

Fit for the Future – Part 2

Fit for the Future – Part 3

Fit for the Future – Part 4

Fit for the Future – Part 5

Fit for the Future – Part 6

These management articles are pretty plain (in title) . . . after all this is the land of no ice in soft drinks and Yorkshire pudding (don’t tell them it doesn’t have any taste).
 


Death by Call Center

Monday, February 23, 2009 by Tripp Babbitt

I am always fascinated by the actions of call center management efforts to attain cost reductions.  Bank management efforts are no exception. 

At a large customer service (call) center for a tier one (large) bank I spent time listening to some phone calls and understanding what customers hear when they reach the bank’s IVR (Interactive Voice Response) system.  I started with the IVR system and listened to all 8 options and none of the options allowed the customer to talk to a service representative. The exception was the customer who wanted to open a new account or loan.  The amount of button pushing required to get to a person by listening to their "tree of options" was mind boggling.  A person calling in with a problem had to follow a path that had no end.  I was assured by the call center manager that this was saving them money . . . huh?
 
Next, I started to listen to value calls (open account and loans), but those lines were being clogged by the customers who had problems as the customer had figured out from the IVR that the only way to talk to a person was to hit the option for opening a loan or an account.  Customers have a way of figuring things out to get what they need.  The really interesting part is that the executives were tracking the new account and loan calls and wondered why they were getting so many calls to open accounts and loans but not very many accounts or loans were being made in proportion to the calls.  The data from their reports didn’t tell them what was really happening (calls were problems not sales).
 
The executives could only look in the mirror as the source of the problem.  They put in the IVR system to "save money."  I suspect it cost them money not only for the IT but for the customers they lost.

The IVR systems have created a whole sub-culture culminating in a website to tell you how to speak to a person at major service organizations.  Check out the website www.gethuman.com.  Customers can be very creative, but why make it so hard to get value?
 
Some management articles to delve deeper into Systems Thinking and better methods for call centers.  They include: Transforming Call Center Operations, Design Against Demand, A Better Way of Motivating People, A Better Way of Thinking about Technology, Better Thinking about Demand, and Better Thinking about Managing People.

Out with the Old and In with the “New” Systems Thinking

Monday, February 23, 2009 by Tripp Babbitt
 
I will be the first to tell you to remain skeptical of any "new" thinking.  However, what we have here is not "new" per se.  Our prevailing management style in the US is born from Frederick Winslow Taylor called "Scientific Management" that gives us the structure of functional specialization of work (assembly line).  This original thought has been the staple of our management philosophy from the late 1800s to present.  A time period that spans the invention of the Zepplin, teabags and the first flight of the Wright Brothers to walking on the moon and the iPod. 
 
Nothing changed much until the American W. Edwards Deming was successful in post WWII Japan in the 1950s in what would become known as the Japanese Industrial Miracle.  All of a sudden the US had a staunch competitor in manufacturing.  Add to this "new" thinking Taiichi Ohno and the Toyota Production System, and we have a whole new management system. 
 
When you look at service organizations (private and public sector) you will find precious few that have ever tried such "innovative" thinking.  The list is long as to why . . . competition (no one else pressuring service organizations), "we’ve always done it this way" thinking, lack of understanding, unwillingness to give up control, technology, etc., etc.  For what ever the reason, not much has changed in management since Frederick Winslow Taylor.  Business Improvement programs (Lean Six Sigma, TQM and many others) have become more of the same.  However, "new" thinking challenges this stale sameness.
 
The economy has changed now.  Maybe we need to be looking for better ways.  My continual search for better methods has led me back to Deming and Ohno. Instead of tools in our continual (continuous) improvement, we need new methods and to change thinking.  
 
I have found advancements in this "new" thinking from Vanguard Consulting Ltd. from the UK.  They have taken the "new" thinking of Deming and Ohno added intervention theory and have had success throughout Europe.  John Seddon (Managing Director) is an occupational psychologist which was a red flag for me because I thought he would be getting people in a room kicking balloons (or something like that).  I was pleasantly surprised that John had spent his time studying "change programmes" and what worked and didn’t work.  From Deming, we (John and myself) both learned that to improve performance in an organization we had to improve the system. What John further discovered was that you have to change the thinking, and that intervention theory can aid in this process.  His method – the Vanguard Method- has been tested and refined over the years to help service organizations benefit from the "new" thinking or more appropriately move from Command and Control thinking to Systems Thinking.
 
To read more on systems thinking with practical exercises, I would urge you to read the Fit for the Future management articles (six in all).  These articles are good reads for your organizational change management and leadership programs.