The grizzled older man sitting next to me on the plane regaled me with stories of growing up along the Chesapeake Bay. The most memorable:
“My daddy taught us kids to swim the hard way. He rowed me out about a quarter-mile into the bay, then tossed me overboard and told me to swim to shore. The swimmin’ part wasn’t so bad, but getting out of that gunny sack with the big rock was a trick, I tell ya.”
Poorly designed work systems — all the processes and procedures and division of labor that overwhelm even talented people. They know how to swim, but the systems act like the gunny sack and big rock.
One of the great business breakthroughs of the 20th century was learning how to optimize an overall system for a desired result. People learned through process design, supply chain logistics, and high-throughput manufacturing that you must avoid optimizing every sub-part of a process if you want the maximum process throughput. The global maximum point is different than local maxima:
We’ve also learned to eliminate wasted effort and materials, and reduce defects. The LEAN practices include moving tasks/equipment/people closer together to minimize wasted steps and time.
There are two key action steps for leaders charged with improving workplace system performance:
1. Focus on the correct system output to maximize.
Systems are perfectly designed to produce the results they produce. If you want different results, change the system. Beware of optimizing your system for an overly-narrow result; think larger. The most helpful approach is to think from the customer backwards. Who is receiving the output, what do they value, and how can you deliver that? I see far too many cases where organizations optimize within silos of activity, forgetting that every organization exists to serve someone.
2. Strengthen the who-does-what-how-and-when component of systems with incentives to continue to optimize in the desired direction.
You can and should use tools and automation to improve processes, increase throughput, reduce time and labor, etc. There is no resting content because continuous improvements will be required over time.
Most process improvement efforts I’ve seen fail on people issues rather than technology issues. Workplace systems always involve people, and people are messy. Leadership would easier without people, but then leadership would be unnecessary! People are the who-does-what-how-and-when component of workplace systems.
To gain scale and efficiencies organizations tend to divide up work among a set of specialists who each can operate efficiently on a narrower range of work. Large corporations often outsource tasks or project work, or rely on services provided by others. The challenge is to develop a coordinated operating model for each contributor for every part of the process, and then continue to look for improvements.
The new problem created by dividing up the work, compounded if you are paying people for specific work tasks rather than the overall deliverable, is that you created a perverse incentive for individuals to maximize their efficiency at the expense of others. You’re focused on local maxima, rather than the global maxima that best helps your final customer. If you’re paying someone X dollars/hour for their work they have an incentive to maximize their hours, rather than optimize your overall system.
One way that commercial building construction has improved over the past few decades is the practice of a contractual incentive to complete projects on-time with the right building quality. The message to the general contractor is simple: Finish the project early? I’ll pay you a little more. Finish late? I will pay you less?
My observation from working with multiple organizations: most HR, Finance, IT, and Legal departments don’t create these kinds of incentives with contractors, services, and providers.
Your leadership opportunity is to grasp #1 – know the correct system output to optimize – and then work out the people issues to execute to that vision. How can you help people to work together rather than separately? Get rid of the unnecessary gunny sack and rock problems in your systems, and let your people swim!
(Note: this was originally published by the author on LinkedIn in 2014)
