October 18, 2013 (Powerhomebiz.com) Note: This is the second part of the news item on Waste-Based Productivity and Profitability Pitfalls.
Pitfall #3: Bureaucratic Styles
To most people, bureaucracy is a bad word, synonymous with “red tape” and wasted time. Yet, despite the negative connotations, most companies still operate bureaucratically—insisting employees work inside of increasingly complex structures with processes and procedures designed to standardize or control everything. While this might have been the most efficient way to train assembly line workers during the Industrial Era, human capital is now the greatest resource for most companies. In other words, we’re paying people to think, to innovate, and to collaborate with others to produce the best possible results. You can’t achieve this level of performance if you attempt to dictate their every move with rigid policies and procedures. The fall of many of our great companies—including GM, Chrysler, AT&T, DEC, and a host of others—is a testimony to bureaucratic blindness. Unfortunately, contemporary management theory offers no alternatives to this style of organizing work and designing organizational structures. Current hierarchically oriented systems—no matter how lean and “matrixed”—are relics of the bygone era of WWII industrialization and manufacturing. In the new business world, bureaucratic practices are becoming increasingly dangerous. They not only kill productivity and profitability, they also kill the generative moods of ambition, confidence, and trust that are essential to building consistent competitive advantage.
Shift Your Understanding
Rather than designing complex structures that dictate how employees must complete tasks, today’s leaders should be focused on providing platforms for people to come together, address their concerns, and invent futures together. This process is called commitment-based management, and it will be as powerful for the next generation of managers as quality was for the last. With commitment-based management, people learn to build structures and processes that enable the smooth flow and tracking of commitments, as opposed to activities—the current norm. While everyone knows organizations are more than just lines and boxes on a chart, the commonly expressed idea that “the people are the organization” is misleading. It is not the people that make up an organization; it is the network of commitments they make to and with each other on a daily basis. Companies generate value when these commitments are clear and crisp and are fulfilled on time, on budget, and as scoped. But when the commitments are unclear, late, over budget, or scaled up or down, companies generate waste (what we call “coordination waste”). The vast majority of companies are blind to this underlying phenomenon and have no means to intervene other than to cut costs, declare new rules and processes, or reorganize—none of which will make a difference. Commitment-based management is a radical departure from the current standard practices and will require some dramatic changes in the way that we think about and design work, structure organizations, reward and recognize performance, and shape cultures.
Pitfall #4: Worship of Information
In our rush to “modernize” everything and make our enterprises more efficient, we have mistakenly come to believe that information is our most valuable commodity. But data and information are useless without human beings to interpret them. These days, computers can do just about anything—except think for themselves. But we have come to tolerate the illusion that the essential matters of work can be invented, managed, and sustained through the creation, storage, retrieval, display, and publication of information. Contemporary information systems are blind to many of the key drivers of productivity and have consistently failed in their quest to integrate the diverse operations of a company. By making information the priority, we have lost sight of its fundamental purpose—to enable the people to effectively address the concerns of their customers. Rather than attempting to replace people, our IT systems, processes, and products should be aimed at enabling the human cooperation, collaboration, and innovation that are essential to growing a business. No matter how impressive or “efficient” an IT system claims to be, it will never replace the passion, joy, creativity, and spontaneity of people—all of which are essential to generating competitive advantage. As people deal with the inadequacies, breakdowns, and sterility of most modern information systems, they find themselves unavoidably generating waste and unproductive moods. In fact, workers report wasting an average 42 to 43 percent of their time on the computer due to frustrating experiences, according to a study by researchers from Towson University, the University of Maryland, and Carnegie Mellon University.
Shift Your Understanding
Rather than designing information systems to manage the movement and protect the security of information, we should be developing and continuously redesigning information systems that enable people to more effectively communicate with one another, coordinate their efforts, mobilize their resources, and take action. For example, consider e-mail. What was invented as a means to replace the post office has now become the most common management tool in organizations. Rather than walking down the hall or picking up the phone to actually talk to our colleagues or employees, we have replaced conversation with impersonal electronic communication. It was never designed for that purpose and is, in fact, ill-suited to managing the complex web of commitments that are the organization. Concerns for legacy systems and the defense of historical practices must not be allowed to limit the capacity for people to work together effectively. Currently this is the rule, rather than the exception. But a new generation of coordination tools is available, and the innovators of the world are using them.
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Chris Majer, Founder and Chief Executive Officer of The Human Potential Project, is the author of “The Power to Transform: Passion, Power, and Purpose in Daily Life” (Rodale), which teaches the strategies corporate, military, and sports leaders have used to positively transform themselves and their organizations in a way readers can adept to their own lives and professions.