Revisitng the Business Classic:
In this issue we take a look at some of the nuggets of knowledge from Deming's legacy. Tried & tested on the broken post-war Japanese state, the results brought a new meaning to the term productivity improvement
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Coming up in our next issue:
- Using different Influencing styles to improve your leadership impact
- New Book Review: Authentic Conversations
Moving from Manipulation to Truth and Commitment
by Jamie Showkeir and Maren Showkeir
Code
- PLUS - more topical articles on business issues.
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This issue explores the benefits that can be achieved through performance management. The terms Performance Improvement, Continuous Improvement, Process Improvement, are often used interchangeably and are all concerned with delivering better value year on year to your customers and to your share-holders.
W Edwards Deming, redefined the boundaries for performance improvement through his life's work and the publication of 'Out of the Crisis' which although a classic, continues to hold relevance for todays organizations. As we see more and more global entities developing common operating models in order to control costs and improve quality we explore how his legacy can help with this challenge. We also look at a model of Leadership that helps to explain why a leader can be successful in one situation and less so in another.
This week saw the 20th anniversary of the fall of the Berlin Wall and we reflect on how such events can help us to think about overcoming barriers to change.
We hope you enjoy our articles. For more information visit our website or blog and as usual we welcome your feedback, so don't hesitate to get in touch.
Mary McGuire
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What did Deming ever do for Performance Improvement?
W Edwards Deming left quite a legacy in the field of performance improvement, changing the face of process driven industries for ever. His style was reflective, bringing careful observations and delivering sage advice.
Drawn from the experience of Japan's phenomenal post-war his book, 'Out of the Crisis' redefined the performance improvement arena.
Although his career started in the US, his theories proved of little interest in his own country. It was whilst working in Japan for the 1951 census that interest  grew for his ideas on process and quality control. The booming sixties saw huge growth in the larger economies; Europe, UK & US, but with it came reductions in quality. During the same era, Japan was able to dramatically improve quality and scale by rigorously applying Deming's concept.
Whilst measuring quality was very important, Deming talked as much about the job of Management. When advising the Ford Motor Company in 1981 during one of its troubled eras he reported back that 85% of all their quality issues were related to management actions. He would often say "The worker is not the problem. The problem is at the top! Management!"
Quality control and performance improvement he argued, requires that everyone in the organization understands the aim of the system, and how to direct his or her efforts toward it. Achieving sustainable improvements required a concerted effort which he outlined in a 14 point plan. Some highlights include:
- Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
- Drive out fear, so that everyone may work effectively for the company
- Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
 The Deming Cycle (right) has four simple steps. Simplicity was the key to improvement in Deming's view. It might seem the most obvious of models, yet in almost all failures of the system, we find that there is plenty planning & doing evident, but very little checking & acting (meaning intervening and addressing issues). If you are introducing any form of continuous improvement drive in your organization, Deming can really help you along the way. So what did Deming ever do for Performance Improvement? Quite a lot actually! |
Developing Common Operating Models - A Global Trend
More and more globalized companies are seeing the need to develop one common framework that delivers the same look and feel throughout its entire organization. Often global companies have grown through a mixture of organic and acquisitive growth which can lead to a range of operating systems and processes, originally serving widely varying strategic goals.
There is a fine balance to be struck in creating a common operating model. The purpose is to provide a coherent and workable framework, yet at the same time not over prescribe to the extent that it inhibits local content.
It requires a good degree of agreement on what we would call the big ticket items. We would define these as:
Performance; Process; Systems (including Asset Control); & People (see below).
The benefits in terms of efficiencies, cost savings and enhanced implementation skills are well documented and provide a strong business case.
The question for organizations developing a common operating model is: Do we know enough about what we don't know and care enough about what we do know to create a common operating model? Your competitors may already be making those efficiency gains, so can you afford not to?
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Walls come tumbling down - 20 years after the Berlin Wall
This week Germany celebrated the 20th anniversary of the fall of the Berlin Wall and with it the end of a communist regime and the East / West divide.
 It is an inspiring example of how any regime, no matter how embedded and intractable it may appear is open to change.
There were many events that led up to that extraordinary day in 1989, but like all change it required enough momentum to make it happen.
Through the reunification, Germany has bridged the considerable divisions between East & West and remains the strongest economy in Europe.
In Business, we can take many lessons from these events, in terms of how we can overcome barriers to change. All change requires a number of key elements to come together to bring about sufficient push in a new direction which we have described in previous articles ( read more).
The anniversary of the Fall of the Berlin wall reminds us how incredibly uplifting change can be if we all work together to one common purpose. Getting agreement as to what that purpose is, is not always easy (as the modern day German coalition model tells us), but striving for something better than the status quo can lead to all sorts of upsides. |
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It's all about Context! - How Leadership needs to be adapted to the situation
The adage that a successful leader in one company may fail in another is not just about culture and values (although these are important as well) but it is often about leadership styles.
Almost 40 years ago, Ken Blanchard and Paul Hersey developed a model to explain this phenomenon, called Situational Leadership. Their insights told us that before a leaders selects a style to use, they must first understand the situation, the capability of their team and the importance of the possible outcomes. The model places importance on four key factors:
- How much Direction (Task behaviour) is required?
- How much relationship development (Relationship behaviour) is required?
- How capable is the team member at fulfiling a specific task?
- What is the level of motivation (Importance) exhibited by the team member in completing the task?
The model, which was further simplified by Marshall Goldsmith (et al) is often represented in a 2 x 2 matrix known as the skill / will model. Read More
The principle behind it is that once a leader learns to diagnose and implement the corresponding style, they will be more effective, able to execute each of the four techniques. Alternating the style, even to the same team member based on the assessment of their skill, will and the task requirements.
How conscious are you of the style you apply in the workplace? How could you use this model to influence and motivate your teams differently? |
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We hope that you have enjoyed reading 'Smart Business Thinking'.
One of the purposes of our communication is to provoke conversation. So if you have a comment or a reaction, share it with us at:
We look forward to hearing from you. |
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Sincerely,
The Agents2change Team |
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