The No Tool Zone

Alright, I don’t subscribe to HBR.  I will now.  I plucked down the $16.95 from the stand at the airport to read one article “The Age of Customer Capitalism.”  A must read . . . absolutely.  Pay the lady!

Like you (or not) . . . I learned in my MBA program to maximize shareholder value (or wealth).  Well Dean Martin (kind of funny name actually he is the Dean of the Rotman School of Management; his real name Roger Martin)  dispels the myth of  shareholder value in favor of “customer-driven capitalism.”  Dean Martin smartly points out that you can not optimize customer satisfaction and shareholder value . . . they conflict.

This has been a guiding principle John Seddon’s brand of systems thinking for years.  Simply put, designing systems against customer demand and deriving customer measures from purpose will allow the financials to take care of themselves.  So quite worrying about costs and get the focus on the causes of costs . . . and not serving the customer in accordance to demands increase costs A LOT!

Dean Martin calls out Jack Welch and his style of management as short-term.  In essence, he left the cupboard empty, but he walked away with millions and if shareholders timed the market appropriately they won too.  If investors bet long term, they lost.  GE Capital was met with massive write-offs in recent history(and accounted for half of GE earnings during the Jack Welch era).

Some smart organizations are beginning to learn like Research in Motion and P&G, but the rest of the companies need method to make this transformation.  So, I will continue to harp on the greatest opportunity for improvement is the design and management of work.  Changing our command and control mindset can be very rewarding, but it requires an intervention of our normal thinking patterns about how we manage our organizations.

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.