The rhyme we all learned as children rings in my ears: Humpty Dumpty sat on a wall / Humpty Dumpty had a great fall / All the king’s horses and all the king’s men couldn’t put Humpty together again. I like to use Humpty Dumpty to describe companies that have functionally separated their work. These companies group similar tasks together, which shatters any cohesive workflow. For service industries especially, this can be extremely counterproductive.

My British colleagues describe this as “functional specialisms.” I call it the Humpty Dumpty Syndrome. Regardless, the functional separation of work has long penetrated the design of most organizations. Functional separation is in our DNA. Frederick Winslow Taylor and proponents of scientific management introduced this design of breaking work into functions and optimizing the pieces. Scientific management theory was a breakthrough—100 years ago. A century later our work structures are still designed in the same way except that modern organizations grapple with information technology (IT) more often than physical layout.

American management has a long-established industrialized mindset in service industries. The trend started in post-WWII when the problem being solved in manufacturing was how to quickly provide products to a world that could only turn to the United States. This was because the competition (i.e., the rest of the world) had been devastated by the war. It didn’t matter how good the products were, so long as they satisfied demand.

Three questions made things quite simple for the industrialized mindset:
• How much demand?
• How long does it take to make things?
• How many people do I need?

As manufacturing competition recovered, Europe made the same mistake the United States is making today. It copied the “success” of American companies. One country stood alone: Japan, which looked at the problem of manufacturing differently with the help of several people, including W. Edwards Deming. Many Japanese manufacturers today enjoy success due to these folks.

Too many service organizations use measures that disconnect them from customers. The result is predictable: higher costs and worse service.

In service organizations, the systemic relationship between purpose, measures, and method is often clouded. These measures have nothing to do with what matters to customers, but they drive all the ingenuity of the manager and worker. They typically have to do with activity and financial targets but do little to serve the customer.

When organizations understand their real purpose (serving customers), they will be handed a whole new set of measures that can be used to understand and improve performance. Any service organization can achieve cost reductions and business improvement by studying demand in customer terms.

When customer expectations are at the heart of management’s actions, improving the work becomes the focus and replaces the system-deflating act of paying attention to workers through individual measures. When management and workers have a shared aim, useful measures and new methods can be uncovered that create value for customers. Working in unison changes the company’s culture to something positive. Instead of manipulating reports and measures, an organization reduces waste and improves customer service.

Bounties in the National Football League (NFL)? Most fans were appalled when former professional basketball player, Charles Barkley, disclosed on The Dan Patrick Show that players will pool money, called a bounty, which goes to the player who hits an opponent hard enough to intimidate him. With a group competing for the bounty, the opposing player is in for rough time.

“You have to be a punk to snitch that out,” said Barkley, now a sports analyst since retiring from the National Basketball Association (NBA). Athletes are upset not at the prospect of losing their pool but at the “snitches” and “punks” who gave the information to the NFL. I bet if their money was invested with Bernie Madoff, the admitted operator of the largest financial fraud in U.S. history, they would have appreciated a few punks around.

Unfortunately, Madoff wasn’t the only rotten CEO of an American organization. L. Dennis Kozlowski, John Rigas, Joseph Nacchio, Bernard Ebbers, Kenneth Lay, and Jeffrey Skilling come to mind, too. In some cases, one brave soul came forward and said, “Something is wrong here.” A snitch or a hero? It takes some nerve to challenge the hierarchy in American organizations.