Deming’s Challenge to Us, Part 2

In my last column, “Deming’s Challenge to Us, Part 1,” I sounded the alert that just being improvement people is not enough, and waiting for management to do something is a poor strategy. In this column, I’m focusing on our choices and options to move forward as change agents.

For a couple of decades I have spoken to executives, change agents, and workers about how entropy can destroy organizations. Entropy is the natural deterioration that occurs when energy is not exerted for company growth and sustainability. Like a plant that will ultimately die if water and sunlight are taken away, organizations wilt if not nourished.

In his book, Deep Change (Jossey-Bass, 1996), Robert Quinn described an even better metaphor for the choice that organizations and individuals must make: Either you are living a slow death or you are recognizing the need for deep change. The ever-increasing rate of world change makes embracing the status quo more risky than deep change.

Peter Scholtes, author and recipient of the Deming Medal and the Ishikawa Award, believed that 95 percent of changes made by management create no improvement; there is only the appearance of deep change. Scholtes specifically referenced reorganizations and new computers as examples.

Abraham Maslow, an American psychologist best known for the Maslow heirarchy of needs, may have put organizations into two buckets to describe where an organization sits on deep change: unconscious incompetence or conscious incompetence. Unconscious incompetence would mean that the organization isn’t aware of the need for change (deep or otherwise). Conscious incompetence means that the organization may know that change is needed but doesn’t engage in it.

Impetus for change

Regardless of whether incompetence is conscious or unconscious, something must provide the impetus to move from slow death to deep change. Why? Because any change is a disruption to your emotional and cognitive state of being. Your drive to change is often overcome by your resistance to change.

The impetus to change may be associated with “pain.” Pain may come in the form of a threat to you economically, morally, legally, or technologically. Or pain may come in the form of wanting more (e.g., being the best at work, increasing revenue).

Disasters, disgrace, and public embarrassment certainly drive the need to change. For example, the incentive for the banking industry to change is apparent from the part it played in our current recession by providing loans to unqualified home buyers. You can also see where insufficient technology has created a disaster for the Affordable Care Act.

Change is forced on leaders and employees during company acquisitions. No two cultures are exactly alike. Adjustment periods are required to harmonize employee dissonance and to integrate technologies.

I see two things that can help move unconsciously or consciously incompetent organizations forward: assessments of culture and customer. Cultural and customer assessments are keys to understanding what drives a company’s perspective and how customers view a company’s performance.

Start with the customer

Scholtes suggested we look at our organizations by starting “customer-in” to assess current performance. A “customer-in” view helps in realizing all types of customer demands. What are customers calling about? Have they called multiple times to get what they want? What happens to the demands? How long does it take to fulfill demand requirements? What is important to the customer about the demand(s)? How well does the organization deliver demand requirements? Any organization could begin with these questions.

Most organizations are functionally split (e.g., supplies, operations, sales). Looking at the organization from the customer’s perspective allows different departments to focus on one relevant view, which helps them to overcome the competitive (i.e., us vs. them) mindset institutionalized by functional design. The customer view helps create an atmosphere of cooperation where the organization has one irrefutable point of reference.

Studying the variety of demands the organization receives provides important insights and uncovers the context of situations that can’t be gleaned from reports, and can’t be seen or heard due to management hierarchy. Each individual demand has a different characteristic of what is important to the customer (e.g., I want a blue phone vs. I want a blue phone by Thursday that I can pick up at the store).

Another significant insight includes what customers have to go through to get what they want. Here, case studies of end-to-end demands can give us a full view of performance. I have visited organizations that received more than 30 calls from customers over a period of one year to satisfy a single demand. This is a common cause of increased costs.

Culture

This leads us to the question, “Why is an organization designed the way it is?” In the United States there are common perceptions that are deeply rooted in our heritage. Americans are “individualistic, competitive, optimistic, and pragmatic” by culture, according to Edgar H. Schein, author of Humble Inquiry (Berrett-Koehler Publishers, 2013). Our American culture influences our organizational culture and thinking.

Schein gives us a way to evaluate our organizational culture, subcultures, and micro-cultures. Collecting “artifacts, espoused values, and basic underlying assumptions” help us understand organizational thinking and what drives it.

Collecting artifacts is the act of understanding an organization’s physical environment, language, technology, communications, rituals, vision and values, rituals, and much more. To me, you achieve this by doing a cultural archaeological “dig” on your own company.

Espoused values are described by Schein as the beliefs and values of what ought to be, but not necessarily what is. For example, in some organizations, I hear, “When revenues are down, we spend more on sales and marketing.” Conversely, in other organizations I hear, “When revenues are down, we cut costs by downsizing and cutting back on expenses.” When our thinking shows value and is reinforced over time, these espoused values become shared assumptions in an organization.

When a solution works over and over, it can eventually be taken for granted and become a “basic underlying assumption,” according to Schein. These are “nonconfrontable and nondebatable,” making change a difficult proposition in an organization as cognitive dissonance creates real conflict and stress within a person. This causes the individual to go into denial or to distort the facts to maintain equilibrium.

Filling the gaps

As a systems thinker, I have gained a deeper understanding that solutions to organizational problems do not come from a particular discipline. Organizational theorist Russell Ackoff’s story of the elevator problem and the subsequent solution comes to mind. The tenants of a building complained about how slow the elevators were in a building. The elevator company sent engineers to speed up the elevators. However, everything they tried did not lessen the complaints. Finally, a psychologist was sent in and mirrors were installed—problem solved.

Lean, Six Sigma, total quality management (TQM), and other improvement efforts have gaps in their respective disciplines. Bridging the gaps means becoming more than a one-trick pony because problems typically have multiple potential solutions—some better than others. Systems thinking helps you utilize all sources and disciplines to shed light on problems.

Efficiency has become the label to describe the results of process improvement professionals using lean and Six Sigma. This is a dead end when you improve things that shouldn’t be done in the first place, or in Ackoff’s words, “wrong thing, righter.” You need to be more than efficient; you must become effective, too. By embracing a broader mindset, you have a better shot at doing the right thing and not just doing things right.

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