Dear Reader,Dysfunctional times always lead to dysfunctional actions. The act of management in attempts to save money almost always result in the opposite. Sometimes actions lead to immediate cost increases and other times the cost is delayed. Almost always organizations do these things in the name of "hitting the numbers" in the short-term.
Management seeks out IT solutions before understanding the system and the current condition of that system. Without an understanding of the "what and why of current performance," IT can do little to help. The design has to be good first before IT can enable. Otherwise, organizations wind up with entrapping IT that increases costs and worsens service.
Oursourcing faces similar issues. Cutting activity costs misses the fact that failure demand (a failure to do something or do something right for a customer) is already present in the design of the work. We like to call it outsourcing waste - the waste costs less when outsourced, but it is still in the design.
Organizations are running 40, 50, 75% failure demand and sometimes more. This makes outsourcing and IT dumb solutions, why would you want to "lock-in" the waste?
Some organizations miss the point by setting a target to reduce failure demand. Setting targets for costs or failure demand - or any other measure for that matter - is management focusing on the wrong things. Targets limit the ability of organizations to know what was possible to achieve without a target, and perpetuate the thinking that focusing on measures rather than the customer is good.
As I wrote in my
last newsletter, good customer service always costs less and bad service costs more - a lot more.
The functional separation of work is in the design of most organizations and management believes that separating and optimizing the pieces that are split out will control costs and allow optimization. Indeed, what it does is sub-optimize the system . . . increasing costs. Breaking the work apart ruins flow and is to live a lie!
Believing that support groups, vendors and management understand the work better than those that do the work leads to projects kicked off without knowledge. More waste and (again) management is just lying to itself about how work should be done.
If you are in management, than quit lying to yourself. The truth will set you free. And make you more profitable!
