Faulty thinking about technology has made customers’ lives worse


“We are stuck with technology when what we really want is just stuff that works”.

– Douglas Adams

In my last article, I discussed the fad lifecycle, giving several examples of the well-known tools of today, failing to deliver, and heading towards the place where fads go to die.

They will eventually join their brothers and sisters in the panacea graveyard; fads that were once popular, promised much, but over time failed to deliver, waned, and then died. Examples of fads that are now six feet under include: ‘Total Quality Management’, ‘Benchmarking’, ‘Process Re-Engineering’, ‘Balanced Scorecard’, ‘Customer Focus’, ‘Core Competencies’, ‘Self-Directed Teams’, ‘Straight Through Processing’, and ‘Learning Organisations’.

Inevitably, for each that now sit in the panacea graveyard, there will be some hardcore fans who will still say that they weren’t fads, that they were just misunderstood and abused, that each was not a tool, and were instead, about thinking and mindsets. Regardless, time has proven they were not the saviour they were claimed to be.

These panaceas are sold to managers with the promise that each will solve their problems. You have to have sympathy for managers.

Russell Ackoff, an American organisational theorist, said back in 1995:

“I sometimes have tremendous sympathy for management, primarily because they are subjected to more panaceas than they have problems.”

Technology-led change

Technology-led change is the norm today. In addition to bespoke technology change using ‘Agile’, ‘Lean’, ‘Lean-Startup’, ‘Design Thinking’ and their brethren, there are other kinds of technology that commercially-motivated toolkit salespeople sell into organisations.

Some of these tools directly interact with customers. I’ve listed examples below. When you read about each tool, as a customer yourself, it might be useful to reflect on how you feel about each one when you interact with them. Think about whether all customers want the same thing, in the same way, and whether they all want to be channelled through these tools.

Tools for direct customer interaction

Personalised Customer Experience: You see personalised digital content and receive personalised marketing based on data held about you. Sometimes you are asked to log into a portal to see your personalised content. Often you have trouble logging on and accessing your information, or your information on-screen is incorrect.

Assisted-service: Interact with frontline workers via phone, email, social media, or online chat. It is common to be either handed off to another specialised colleague or referred to the website for further instruction. Digital social media response team members often lurk in the background dealing with your issues, questions and complaints that might affect the brand – replying with canned responses.

Self-service: Interact digitally, without the need to interact with a human being, through text message, mobile apps, virtual assistance, and websites. It is common to be either handed off to another specialised colleague or referred to the website for further instruction if your demand cannot be met through self-service.

Interactive Voice Response (IVR) and Automatic call routing: Be asked to either ‘press 1 for this or 2 for that…’, or be called upon to ‘state in a few words the reason for your call…’. The options provided are generic and high level. It is common to be routed to an automated voice who refers you to the website or directs you to use self-service.

Interactive Voice Response (IVR) – Outbound: Receive automated voice calls, at a time not of your choosing – the time of the call is decided upon by the organisation. Often it is a sales call. Often the number is withheld, and you get numerous calls until you answer.

Call centre script software: When you contact an organisation, you are read scripts and prompts. You get told ‘First I need to take details from you,’ and you have to give the person many more details than you need before they answer your question. You get read disclosure statements – ‘First I need to tell you that I am a tied agent of this company.’ You are asked – ‘Is there anything else I can help you with?’ even when the person knows it is highly inappropriate and not the time to ask. You are often sold to – ‘I’m so sorry we messed up your account. But while I’ve got you, can I interest you in home insurance?’

Predictive dialling system: Your number is pulled from a list and automatically dialled. When you answer, you are automatically routed to a frontline worker who talks to you about an issue, or about a product for sale. Often the number is withheld, and you get numerous calls until you answer.

Branded online communities: Get your questions answered by a community of fellow customers in an online forum.Frequently advice given is incorrect or out of date. Social media response team members often lurk in the background dealing with your issues, questions and complaints that might affect the brand. You are encouraged to take complaints ‘offline’.

Customer feedback solutions – customer satisfaction surveys, voice of the customer (VOC), and electronic surveys: Either at the end of every interaction you have, or soon after, you are told that: ‘Your experience with us is very important to us.’ Followed by: ‘Please tell us what you think and share your feedback.’ or ‘Please tell us how likely it is that you would recommend us to a friend or colleague.’ If you don’t complete the surveys then you are likely to receive numerous reminders. Sometimes while you browse a site, a survey will appear over the content you were reading.

Automated notification: Text messages, emails, calls: Receive automated voice calls, text messages, and emails, at a time not of your choosing – the timing is decided upon by the organisation. If you miss a call, you must wait until the next designated time.

Display advertising: As you browse a website, graphical advertising appears within the text, or pops up, often in the form of video. Frequently the sites do not offer the facility to turn this feature off.

It is not uncommon for the above technology to be in use even in the smallest of organisations. Even my local library has an IVR when you ring them (with only two options in the menu!).

The tool vendors tell us what benefits will be achieved through implementing these tools:

  • Give customers a choice on how they interact with you, in a seamless and cohesive way.
  • Give the customer what they want, with no delays, and with less effort.
  • Enable customers to be easily informed of progress.
  • Understand from customers how to improve.
  • Improved service.
  • Reduced costs.

Sound great doesn’t it.

Next, let’s look at the second group of tools, which this time indirectly affect customers, in other words, they are tools that drive the way in which the frontline people serve customers.

Tools that indirectly affect customers

  • Customer loyalty management
  • Customer experience management (CEM or CXM)
  • Social media management
  • Customer interaction management (CIM)
  • Customer complaints management
  • Issue tracking management
  • Omni-channel interaction and journey management
  • Customer relationship management (CRM)
  • Customer care management
  • Call centre management system
  • Outbound call management
  • Workflow management system (WMS)
  • Work management system
  • Case management system
  • Document management system
  • Back office workforce management
  • Workforce optimisation (WFO)
  • Interaction monitoring system
  • Customer journey optimisation
  • Data analytics and insights
  • Knowledge management system
  • Quality assurance system (QA)
  • Enterprise resource planning (ERP)

And that list isn’t even exhaustive!

The tool vendors tell us the benefits that will be achieved through implementing these tools:

  • Enable the frontline workers to focus on the customer.
  • Increase self-service which will reduce operational costs (because if more customers self-serve, then we need less staff).
  • Make the workforce more efficient, productive, and consequentially, their utilisation will be higher.
  • Improve morale through better skill assessment and employee coaching.
  • Improve forecasting and scheduling of resources; balancing work across functions.
  • Route customers to the right area of expertise.
  • Automate business rules and protocols.
  • Optimise the efficiency of the front and back office through better prioritisation, routing, and queuing of work.
  • Understand what works, and what doesn’t work for customers, resulting in improved and streamlined processes.
  • Enable work to be off-shored to be done by less expensive resource.
  • Obtain measures of performance through data, analytics, business intelligence and reports.
  • Meet business goals, targets, KPIs and SLAs.

It is very cogently argued and will be considered manna from heaven for most service organisation managers.

How well does technology achieve its purpose?

Managers have bought these tools in droves. Walk into any service organisation today, and you will find the majority of the above-listed tools either in place, being built, being configured, being installed, or being upgraded. Sometimes you even find a tool is being replaced by an identical tool, except this time from a different vendor. In all instances, fortunes are spent.

Not surprisingly, the most vocal champions of technology-led change are those with a vested interest in the technology being used as widely as possible. Whether development and support activities are provided by internal technology departments or, as is more common these days, external outsourcers, both need large budget allocations to stay in business.

The amounts involved are hardly trivial. As an example, according to research by Celent published in Computer Weekly:

European banks spent £41bn on technology in 2014, rising to £42.23bn in 2015 and £46bn in 2017.

As they purport to improve service, it is reasonable that these tools should be scrutinised to learn how and how well they achieve their purpose.

‘Computer says no’

It is common for technology to be delivered late, go over budget, be de-scoped and, perhaps worst of all, when finally installed, make the job of serving customers harder. As recent high street banking system failures demonstrate, technology changes can paralyse even the least complicated of customer transactions, paying money in and out. It’s fair to say that customers’ experience of services is dominated by how the technology works, whether through direct interaction online or via agents all too often telling us ‘Computer says no’.

Most service organisations have invested heavily in workflow management systems to log, scan, sort, batch, queue, allocate and measure work and worker activity. These tasks tend to be highly valued by management but, paradoxically, are often a major cause of failure demand and waste.

When ‘the work’ is studied using the Vanguard Method, the impact of tools and how they make things worse for customers and workers becomes immediately obvious. Listening to or reading what customers ask for at major points of contact, for example in the Contact centre, Helpdesk, Sales support and so on, reveals how technology also disrupts flow, and in so doing, causes the customer problems – resulting in even more failure demand that is then logged, sorted, batched, queued and allocated. It is not uncommon for this Kafkaesque cycle to go through many iterations before a simple request is resolved.

It’s easy to see how technology budgets in individual institutions can run into the hundreds of millions and why service organisations have a highly paid Chief Information Officer or Chief Digital Officer on the board to be accountable for the spend.

Are these huge capital spends justified? Or is there a way of ‘doing technology’ that achieves better results at lower cost?

A technology managers dilemma

If you are a leader in technology, this is a critical question to answer. The odds are stacked against you. In evidence of this, Couchbase surveyed 450 enterprise technology leaders across the US, UK, France, and Germany.

73% believed they could be fired as the result of a poorly implemented or failing technology project.

You can understand the technology managers dilemma; ‘how to invest in the right technology?’

To illustrate the risk: In an article titled ‘Heads roll over $60 million Brisbane City Council IT blow-out’ the Brisbane Times reported:

Heads have rolled in the wake of Brisbane City Council’s $60 million IT systems blow-out, with two senior officers leaving the organisation last month…

The Chief Information Officer and the Organisational Services Divisional manager both departed. As reported in the Brisbane Times:

…council chief executive Colin Jensen said the two IT staff members departed after they met with him the previous week. ‘After careful consideration, they both decided to separate from the organisation immediately,’ he said.

This is not an isolated incident. Two academics; Robin Gauld and Shaun Goldfinch have studied failed technology projects, and published their results in a brilliantly titled book called ‘Dangerous Enthusiasms’. They found that 20 to 30 percent of technology projects are abandoned completely, 30 to 60 percent are delivered, but don’t work properly, cost much more and, thus, are partial failures. Doesn’t leave a lot does it!

The findings from the Harvey Nash/KPMG Creative CIO survey 2016, which represents the views of 3,352 CIOs and technology leaders across 82 countries, were also sobering.

In the survey respondents were asked: ‘For projects completed during the last TWO YEARS, indicate how successful you feel the project was’.

The resulting chart from the survey shows some technology projects were rated overall as being successful. For example, infrastructure roll-out, moving systems to the cloud, or a new website, however, for the majority of the list, less than 50% of people deemed them as successful.

These findings (there are many others) give further evidence to the fact that current fads in use for ‘doing technology’ aren’t solving problems for today’s technology leaders and the businesses that they support.

Why technology is predictably problematic

We need to go beyond the consequences of technology failures to provide insight into why technology is predictably problematic.

Our starting point is to understand the problems managers are trying to solve through technology, in other words, what is their dilemma?

It is equally critical to understand why technology-led change makes sense to managers; to examine the logic that underpins the vast sums of money that managers invest in technology.

There are fundamental beliefs about the world of work that managers bring to bear in an organisation. The prevailing underpinning logic behind those beliefs is command-and-control.

In recent times the ability to command and control all aspects of organisational life has been increased with all-encompassing technology; and over time the size of the management factory – whose only purpose is to either command or control – has grown.

A lot of people know there is a problem with command-and-control. However, of the two words, most people tend to concentrate on ‘command’; bosses that are being too bossy. Experts suggest the antidote is to implement empowerment programs and engagement programs. They espouse that we should be nicer to our people, and have leaders be coaches. This approach is fundamentally wrong. In evidence of this, ‘empowerment’, ‘engagement’ and ‘coaching’ programs have been in use for many years now (and a lot of people have read Dan Pink), and yet our organisations are still wedded to command-and-control.

Instead of focusing on ‘command’, the word we have to look at is ‘control’. Our theories of control are the problem in our organisations. In reality, our methods of control send organisations more out of control than in control. This is part of what leaders learn when they go through the Vanguard Method, without changing your theory of control, you won’t change the performance of your organisation.

It may seem counter-intuitive; however, the problems afflicting today’s organisation are axiomatic. The theory of control is a universal problem. All around the world, when managers study their organisations, they learn it is all of their current controls that are the cause of their problems.

Technologists have become the unwitting instrument and enabler of command-and-control management

What has this got to do with technology? Technologists have become the unwitting instrument and enabler of command-and-control management.

Technology has become the backbone of organisational life, and command-and-control thinking is implicit in the design of technology.

Paradoxically, conventional controls lead to an organisation being out of control, and technology compounds this. The conventional theory of control is ‘baked into’ off the shelf tools that technology managers buy, and is specified by command-and-control managers to be built into technology through bespoke development. Once locked in and rolled out, the unintended consequence is that the technology entraps rather than enables the way people work and how customers interact.

To illustrate: let’s look at some examples of command-and-control thinking and how technology managers are asked to reinforce and solidify it.

In a conventional service organisation design, if you’ve got a front office and a back office, you’ll get two views of the customer; one based on a conversation with the customer, and the other based on a series of rules or protocols. It is common for the front office to break down a service request into a number of separate tasks to be completed by the relevant back-office function. Each of these designs increases the potential for things to be sub-optimised. Technology managers will be asked to implement tools for front and back office work management, and to code the rules and protocols into the systems.

If managers are standardising work, for example, asking customers to fill in forms, technology managers will be requested to create online forms or implement document management systems that scan paper forms into digital records to be checked and processed. It results in an adversarial relationship forming with customers, as, inevitably, they will misunderstand what to fill in, miss something, or have to ask for help filling the form in, breeding failure demand, rework and frustration.

If you are managing people’s activity, in other words, how many tasks they should be doing per day, then that will stop the organisation from absorbing variety, which results in a lot of customers not getting what they want, and creating failure demand. Activity management is hardwired into off the shelf tools or will be specified by command-and-control managers to be incorporated into bespoke technology development.

The same is true if people within the organisation work to standard times, in other words, limiting their time to complete a task. A veritable factory of activity will sit around standard-setting, monitoring, reporting and resource-planning. Technology managers will be asked to configure or code time recording and adherence to service levels into corporate systems, to ensure, for example, call centre agents meet standard times for handling calls, back-office workers meet standard times for completing tasks, home-repair tradespeople and car-repair shop technicians meet standard times for repairs. It will negatively affect capacity and lower capability.

If managers specialise the work, which is quite common, they increase the number of handovers, which in turn, means more fragmentation of work, increasing the number of errors, duplication and rework. Technology managers will also be asked to be hardwire specialisation into corporate systems.

If you think you should control what is said (or sold) to the customer – by mandating the use of pre-determined scripts and prompts – then both will stop the organisation from absorbing variety of customer demand, making it frustrating for customers to get what they want, and infuriating them as you try to sell them something they don’t need. Technology managers will be asked to program scripts and prompts into corporate systems to take pre-determined information from customers.

If you inspect people, then people worry about meeting the requirements for the inspection, which is not the same as serving the customer. The more inspection you add, the more waste increases. Inspection is either built into off the shelf tools or specified to be built into corporate systems.

The limited abilities of what technology can do also drives command-and-control managers to specify what should be built or configured. For example, if we question why managers believe that standards are so important, the answer is because technology does not cope well with variation. Similarly, if we question why rule-based processes and decision taking are so important, it is because rules can be coded, whereas principles can’t.

Customer Relationship Management (CRM) interferes with the relationship not builds it

To illustrate further: Let’s look at an example of a popular tool in use today, and how the above faulty thinking is manifest.

We are told that Customer Relationship Management (CRM) systems enable an organisation to store customers’ details, and keep a record of previous interactions with each customer, regardless of how the customer has interacted with the organisation, for example, through phone, email, text or online. Notes for each interaction are recorded by the frontline (or automatically) and stored in the CRM system. Outbound correspondence is also recorded. The CRM system is often linked to other corporate systems, to enable the workers to see a holistic view of a customer.

It is quite common that when a customer contacts the organisation, the CRM system automatically knows who they are, as, before arrival, they would have been verified through other automated means. All data the organisation has about the customer is onscreen and at the frontline workers’ fingertips.

The underlying dilemma command-and-control managers are trying to solve, that drives them to purchase CRM systems, is ‘How do we retain customers?’. The thinking is that if we ‘know our customers and their history’ they will feel ‘loved and cared about’, and consequentially, they are more likely to stay with us. With that underpinning logic, it makes sense to record every transaction and have those records instantly available when a customer makes contact. The CRM system makes us appear like we treat each customer as an individual – after we have asked them for their account number, client id, and security questions that is!

In his article ‘How to deliver a perfect personalised service experience: The experts’ advice’, Neil Davey cites two sources who give examples of conventional wisdom:

Carolyn Blunt, founder of Real Results Training says:

“A bad customer experience could be very damaging. A good customer experience can build customer loyalty and retention. It can help your business save thousands on marketing efforts if you are retaining customers and getting positive reviews from them.”

Simon Towner, divisional director of retail at Omnico Group, adds:

“Shoppers are people and as such have a number of emotional needs. These include acknowledgement, appreciation, being cared about, being important, listened to, getting noticed and being valued. Personalisation recognises these emotional needs and differentiates your company from competitors that don’t provide such a great level of service.”

On the one hand, we have managers wanting to retain customers, on the other we have the prevailing wisdom on how to do so. It’s inevitable then that an amalgamation of the two results in technology that is either bought or built based upon the prevailing logic.

However, what is invisible to command-and-control managers, and so-called experts, is that their CRM system of record is stuffed full of failure demand interactions – progress-chasing, querying letters and forms, and so on. It might surprise you to learn that in utilities, for example, failure demand can run as high as 80 – 90 percent of all the demand into the system, in insurance companies it’s 40 – 60 percent. This all gets catalogued and recorded in the CRM system. Customer Relationship Management might be more properly called Customer Record Management.

There will be some customers who expect their service organisation to remember who they are, what they’ve bought, and give a personalised touch, others couldn’t care less; they just want what matters to them understood and delivered – quickly in and out. There will also be a mixture of customers somewhere in between the two extremes.

Command-and-control thinking leads managers having to ‘make budgets’, and workers having to ‘work to procedures’; the consequences for customers is evidenced in the bad fit between what matters to them and the way the organisation responds. What matters to customers is rarely sought, and even if customers volunteer what matters to them, it becomes lost amongst the thousands of records of failure demand held within the CRM system.

The reason customers leave is simple: different things matter to different people; if the organisation fails to deliver against those things, customers go elsewhere.

To solve the problem: ‘How do we retain customers?’ the object is to understand the nature of customer demand, its predictability, and variation and design optimal responses. Not only is this cheaper for the organisation, it also improves customer satisfaction through building the customer relationship rather than destroying it.

‘Push’ sales

The second underlying dilemma command-and-control managers believe a CRM system will solve is ‘How do we increase sales?’.

CRM stands for customer relationship management, but in truth, it has little to do with relationships and everything to do with selling.

The CRM system is used to capture information about what customers have bought. People in marketing think this will give clues as to what to promote to those customers by email, online, or when they next call.

But how often does this interfere with the relationship rather than build it?

What is invisible to command-and-control managers is the unintended consequences of customers being ‘sold to’. Paradoxically, prompting frontline workers to sell to customers, actually results in increased costs and lost revenue. When popups appear driving the frontline to sell, they pass-on customers for whom they would be unlikely to make a cross-sale or up-sale, and even avoid selling customers something they wanted if it didn’t help them make their cross-sales and up-sales targets. Worse, it increases the probability that customers will NOT be sold the things they want.

An example will illustrate: In a telecommunications organisation, when a customer contacted them, the frontline worker would enter their mobile number into the CRM system. A prompt appeared detailing the top three things that the customer would be interested in. Frontline workers were informed that the system would analyse the customers’ bill and check what would be right for the customer. Through study, what they learned was it didn’t matter what you put into the computer, or what was on their previous bills, it just told the frontline the top three things that the product managers and marketing wanted to sell.

Mis-selling led to unintended consequences, for example, repeat calls, and the reverse logistics of the customer having to return the product – each of which had a direct impact on costs and customer satisfaction. Such consequences were invisible to the command-and-control managers that specified the sales prompts for technologists to implement.

To solve the problem: ‘How do we increase sales?’ How the system is designed and managed will determine the volume of sales. The sales paradox is that by doing less ‘selling’ you allow customers to buy more from you, and you free up your people to have the capacity to deliver what people want to buy.

The fastest way to generate more sales is, often, to improve your sales flow. When you study sales flows, managers are usually astonished at how difficult it is for people to become customers – with technology institutionalising those difficulties. Conventional managers think the fastest way to improve sales is to spend money on marketing. If your customer acquisition processes make it hard for people to become customers, this just ensures more people talk about how difficult you are to deal with. Conventional managers also think the fastest way to get more customers is to incentivise the front line to sell. That always leads to fewer sales.

All we want is stuff that works

As I led with this article, It was Douglas Adams who said:

“We are stuck with technology when what we really want is just stuff that works”.

When you put all the technology together, predictably, for customers, it often just doesn’t work. To illustrate: in the article ‘IT Just works’ you can read an example of how technology hinders customers from getting what they want and puts customers off from buying. It is a common example of poor service, and increased costs, which are the inevitable outcomes when the tools based on a conventional service design are in operation.

To get the service they expect, customers have learned to work around the technology. For example, in one company, as many as 50% of the customers ringing in with an invoice enquiry abandoned their call. Customers learned to trick the IVR and speak to the customer services (sales enquiry) line instead. As many as 40% of the calls coming into the sales line were billing queries. These were all logged in the CRM system and passed onto the invoice enquiries specialists through the workflow system, taking days to get actioned.

Often the customers called again, to chase the progress of their enquiry, triggering more records to be recorded in the CRM system, and more work objects to enter the workflow system. Work objects were not identified as being related to the same enquiry (the corporate systems just saw them as more work to do), which had a doubling effect, as different specialists would pick up work objects from their queue and work on them, causing duplication of effort.

This is an example of measures of control that were getting in the way. Executives working on functional measures, bad debt, sales volume, call volumes, and time to answer calls were oblivious to the problems. Technology managers were to ask to hard code all of these measures into the corporate systems, unwittingly institutionalising the very thing that caused increased costs and poor service.

Customers work around the technology because they can ‘see’ the waste: they know how many times they need to call to get service, they are irritated by IVR systems (‘press 1 for this…’) that fail to get them to someone who can help them and hence mean they have to repeat themselves, they are infuriated by service workers who follow scripts and procedures in their corporate systems – and who say ‘my system is running slow…’ (while they lookup the next line of their script) – and the failure to be listened to or have their problem solved.

This infuriation leads to another example of working around the technology; savvy customers who tweet, or Facebook post their issues. They have learned that their service provider will address issues faster than if they were to go via the contact centre. They are right, as the service organisation will be worried about brand damage; they continually monitor Facebook and Twitter for mentions of their brand.

In his article ‘5 Social Media Hacks for Better Customer Service’ Daniel Bortz writes:

Anyone who has ever tried to navigate a voicemail menu or been stranded on hold by a customer service rep knows how maddening it can be to get help over the phone. According to an American Express survey, more than half of callers say they’ve lost their temper while on the line with a representative. That may explain why more and more people are turning to social media to vent their frustrations. In a J.D. Power survey of more than 23,000 online shoppers, 67% reported having used social media to lodge a complaint.

One of the biggest growth areas in frontline support is the ‘Social media monitoring team’. Increased social media demand should be a signal to managers, however, for a command-and-control manager, the signal is ignored. Instead, they increase resources in the team and install technology that can be used to post back (either manually or automatically) pre-written messages to ‘buy time’, ‘turn positives into negatives’, and give the appearance of listening to customers. The implication is more cost for the organisation and unhappy customers who are encouraged to take complaints ‘offline’ and end up back in the same system with their issues unresolved.

Electronic Taylorism

Managers probably exhibit more dysfunctional behaviour in their attempts to manage people than in any other activity. Command-and-control managers assume their people to be ‘the problem’. It is natural, therefore, for them to seek technology-based ‘people solutions’.

In their article titled ‘Robots have already taken over our work, but they’re made of flesh and bone’, published in the Guardian,  Brett Frischmann and Evan Selinger state:

“The modern, digital version of Taylorism is more powerful than he could have ever imagined, and more dehumanising than his early critics could have predicted.

…Technological innovations have made it increasingly easy for managers to quickly and cheaply collect, process, evaluate and act upon massive amounts of information.”

To illustrate their point: Monitoring employees is on the rise. Technology sits in the background recording what people are doing. For office-based workers technology tracks, for example, if are they doing their work within the specified times, how much time are they spending surfing the web or on social media, how many emails or instant messaging chats are they sending, and how much work they did that day. For field service workers, the technology tracks, for example, how long they took to get to a job, how long they spent on a job, how long they spent on their breaks, and how many jobs they do per day.

Paradoxically, several of the largest institutions in Australia who are ‘going agile’ as means of moving from command-and-control are deploying such monitoring technology at the same time.

Brett Frischmann and Evan Selinger warn:

“When the guiding assumption of management is that employees won’t be productive unless forced to be by constant observation, it engineers low morale and pushes people to act like resources that need to be micromanaged. Too often, we become what we’re expected to be.”

Technology makes it systematically hard for employees to improve the work, because how they work has been specified and inputted into a computer. For employees of an organisation, this technology drives the dysfunctional behaviour that infuriates customers and lowers their morale.

Rewarded for adherence to command-and-control logic

What’s disturbing is that despite their customer’s infuriation, and declining staff morale, organisations continue to win awards for excellence in service. Award-winning plaques adorn the walls and trophies sit in the boardroom. Why the disconnect?

You only have to dig a bit deeper to reveal the answer. The criteria for the awards are based on adherence to command-and-control logic.

To illustrate: Let’s look at a sample of attributes listed in the ‘International Customer Service Standard (ICSS) 2014 – 2017’ that are commonly used as judging criteria:

  • The enterprise has strategies and processes for managing customer loyalty and retention.
  • The enterprise maintains contact with customers through a regular communication process.
  • The enterprise ensures accurate and timely information is maintained about each customer transaction and relationship through the use of knowledge and technology assets.
  • The enterprise has a practice of monitoring and responding to social media environments.
  • The enterprise utilizes technology to enhance customer transactions for existing and potential customers.

Each of the above act as reinforcing loops for command-and-control thinking.

Nowhere in the criteria is it specified that award judges sit on the phones to see if the organisation understands what matters to its customers, or its ability to meet what matters to customers there and then. They don’t look to see how much failure demand is entering the organisation, or what is contributing to the failure demand. They don’t judge how well the work flows through the organisation and what activity directly delivers purpose from the customers’ point of view. They don’t see if managers take decisions based on measures that are derived from the work that demonstrates capability and variation. They don’t ask for evidence that managers have designed a system that allows customers to pull value from it, or if managers are working within the work, enabling the system by removing ‘system conditions’ and building capability in the frontline.

The same is true for regulators, who exhibit the same, dysfunctional, command-and-control thinking; they too need to re-think their theories of control. Their assessments are another reinforcing loop.

The central error is that both make the same mistake of specifying measures and methods; this can only result in inhibiting innovation and breeding a culture of compliance to command-and-control.

How to do the work is the superordinate paradigm to change

Problems such as losing customers, decreasing sales, poor morale, increased costs, and brand damage have their roots in traditional managerial assumptions. Spending vast sums of money on technology will not solve these problems; it is more likely to institutionalise and, hence, exacerbate them.

Today’s faulty thinking about technology in service organisations is rooted in a dim view of human nature and an over-optimistic view of automation. Command-and-control managers typically think of staff as ‘resources’ and automation as a means of reducing costs by replacing people with machines and getting customers to do more of the work. Their expression of command-and-control thinking is provided by technology.

Technology leaders, and in turn, their teams of technologists, have therefore become the unwitting instrument and enabler of command-and-control management. Wrapping ‘Agile’, ‘Lean’, ‘Lean-Startup’, ‘Design Thinking’ and their kin around faulty command-and-control logic can only result in technologists doing the wrong technology faster.

Through not addressing the fundamental issues, problems will go unsolved, and so many technology failures, write-downs and lack of success will continue.

How to do the work is the superordinate paradigm to change. If an organisation wants to untether improvement in service and reduction in costs, managers need to know what to do about the work.

Part of the problem is that the tool vendors don’t talk about work, how to do work, how to understand work, how to learn from it and how to improve it. Instead, they focus on ‘features’ as ‘benefits’. The technology industry is continually re-inventing itself, the major players move from promoting features of one tool to the next. Are these ‘solutions’ designed to improve your organisation or is their purpose just selling more products?

Managers operate on a misguided assumption on how much work is being done. For example, managers can tell you where all the work objects are, how much is being done by everybody, how much work is coming in, going out, and in backlog. A command-and-control manager’s dream which tool vendors sell into.

While technology appears to improve performance (because of the conventional measures in use giving the illusion of better performance), the underlying norms and practices relative to doing work are not articulated or challenged, and it is these that maintain sub-optimal business performance. Managers have been sold a dream that is, in fact, a nightmare.

Problems occur because, on the one hand, the tools are not actually dealing with what’s wrong with the system – they just reinforce it, and on the other hand, technology leaders are inhibited from contributing precisely because of the system (the way their work is defined, the way measures are used, the way functions, processes and roles are designed). These ‘system conditions’ are the way they are because of command-and-control managerial thinking.

This leads to the question; how do we change it? People don’t give up their traditional ways of working unless two conditions are satisfied: They see how current methods produce sub-optimal results (customer dissatisfaction, inefficiency, lost opportunity, increased cost), and they feel confident about doing things differently – they can see how a different approach will benefit the organisation and its customers. The first condition relies on understanding the organisation as a system which, in turn, leads to good decisions about what to do differently.

Technology that adds value to the work and to customers

The extent that technology is a benefit depends on how it helps or hinders the way work flows and helps deliver what matters to customers.

Customers are fed up. They see how technology is disabling their service organisations in delivering what matters to them. Equally, people who work within a service organisation are less motivated when they work in systems where they feel ‘controlled’ by technology.

To create better lives for customers, and for the people who work in organisations, technologists, and their managers, need to be liberated from faulty command-and-control thinking. Doing so will enable them to create technology that adds value for customers and those that serve them.

People who work within organisations will become more motivated through working in systems over which they have more control. Technologists and their managers will deliver technology that helps, not hinders – and will be lauded for it. Customers will flock to the organisation as the variation of what matters to them is simply understood and delivered.


In my next article, I address one more remaining unintended consequence of command-and-control technology-led change; the ‘Digital Cost Trap’.

If you would prefer not to wait for answers, senior leaders who have crossed a Rubicon, completely re-thinking their ideas about management, who have liberated technology, and built a generative service organisation that produces extraordinary results will each be talking at our upcoming Progressive Leaders Summit at the Melbourne Arts Centre on the 2nd November.

Further articles in this series:


The Fad Lifecycle (‘Agile’, ‘Lean’, ‘Lean-Startup’ and ‘Design Thinking’ are dead)

Over the course of time, various frameworks, methodologies, and approaches (I would call them tools with labels) have come and gone. Panaceas that promise much and purport to solve our problems, turn into fads and die, bowing out to the next wave of ‘new thinking’ and labels.

While in vogue, the people that promulgate them (usually consulting firms and ‘thought-leaders’) extoll their merits and attempt to convince the unwitting of the need to buy their tools, attend their training classes, obtain certification, and buy their books. To not do so, they warn, is to be left behind; the fear marketing hyperbole: that your competitors are already doing it – and if you don’t join them – you will be left behind, or worse, you could become the next Kodak or Nokia. Fear sells.

If you are involved in the creation of technology today, then you will no doubt be aware of tools such as ‘Agile’, ‘Lean’, ‘Lean Startup’ & ‘Design Thinking’. The various consulting firms have done an outstanding job at marketing each, with the message reaching right up to the boardroom.

Each of these tools started small, and have over the ensuing years grown into the technology creation and transformation consciousness.

The ‘Innovation adoption lifecycle’ is a sociological model created by researchers Beal and Bohlen in 1957. It describes the adoption or acceptance of an innovation. The model indicates that the first group of people to use something new are called ‘innovators’, who are then followed by ‘early adopters’. Next come the ‘early majority’ and ‘late majority’, with the last group to eventually adopt called ‘laggards’.

Diagram: Innovation adoption lifecycle. Source: CC BY 2.5 https://en.wikipedia.org/w/index.php?curid=11484459

A panacea or fad can be characterised in the same way. A new tool is created, and the ‘innovators’ begin to use it. Next, the ‘early adopters’ jump in, promoting the promise that this tool is better than the last. Popularisation occurs in the ‘early majority’ through promulgation by ‘thought-leaders’ who write books, articles, blogs, tweets and give presentations at conferences. The big firms, who smell money, enter and begin marketing and selling ‘benefits’ to the ‘late majority’, and finally, the ‘laggards’ catch up through fear marketing.

When the purported benefits of the fad do not materialise, the fad begins to die, and typically, a war of words ensues between naysayers that have arisen (sometimes the originators themselves) vs hardcore followers and other originators of the fad. The cycle repeats itself when the next new tool – often the same thing just with a new label – comes along to take its predecessor’s place.

I call this the ‘Fad lifecycle’.

Diagram: The Fad Lifecycle. Source: David Joyce, CC BY 2.5 AU

Psychologists have learned that if a person is presented with attitudes or actions that are difficult for them to accept, then their defensive mechanisms kick in. It results in the person attempting to rationalise – they think of reasons to justify or explain, in a seemingly rational or logical manner, to avoid the true explanation.

Rationalisation happens in the last stage of the fad lifecycle. Fads seldom completely die out, its originators, and some of its hardcore followers who remain loyal, rationalise that ‘people didn’t do it properly’, or ‘snake oil sales people ruined it’, or in extremis ‘in time we will be proven right!’. The most common rationalisation is to point to what has ‘worked’ and ignore the rest.

What has this got to do with ‘Agile’, ‘Lean’, ‘Lean Startup’ and ‘Design Thinking’? Well, if we examine each, they are following a familiar pattern – they are all trudging through the fad lifecycle.

Agile is dead

From beginning small in the early 1990s under a variety of different guises, ‘Agile’ was born in 2001 following the creation of the Manifesto for Agile Software development. Since then it has gained in popularity, progressing through the stages of the fad lifecycle.

Today, ‘Agile’ is in no doubt mainstream, with both the late majority and laggards embarking on ‘Agile’ transformations. Some of these endeavours are happening beyond the confines of its roots in technology development. Fuelled by ‘thought-leaders’ (sales people) who promise that ‘Agile’ is the antidote to outdated command-and-control hierarchies and bureaucracies, they recommend that it should be implemented across the entire organisation, thus going way beyond the original intention of a set of values that were created for Agile Software Development.

Unfortunately, popularity doesn’t necessarily translate to results. ‘Agile’ is now teetering on the edge of the ‘Fad begins to die & rationalisation begins’ stage of the fad lifecycle.

‘Agile’ was born from frustration. The blame for the large-scale failure of technology projects had been pinned on the ‘Waterfall’ methodology, while ‘Agile’ proponents promised these issues would be alleviated. Sixteen years on since the creation of the Agile Manifesto, there are just as many technology failures as there were in the days of ‘Waterfall’. The promised panacea hasn’t become a reality.

In evidence of ‘Agile’ being in the final stage of the fad lifecycle, there is a growing number of people today who claim that ‘Agile’ hasn’t worked, has become bastardised, and that ‘Agile is dead’ – some of whom were its founders.

6point6 commissioned a survey of 300 CIOs in the UK and the US to examine their experiences of Agile and measure how successfully the principles of Agile are being applied and executed.

The research … uncovered that over half of CIOs regard agile development as “discredited” (53%) while three-quarters (75%) are no longer prepared to defend it.  Almost three quarters (73%) of CIOs think Agile IT has now become an industry in its own right while half (50%) say they now think of Agile as “an IT fad”.

Others acknowledge there are issues but are equally as quick to rationalise by pointing out the advantages that have been gained. As Jim Highsmith, one of the 17 original signatories of the Agile Manifesto, wrote:

“I’d prefer to focus on the positive – virtually no one is “starting” a waterfall implementation these days, how we’ve learned to deliver value to customers faster, how we’ve brought quality to the forefront in ways that haven’t happened before, and how we’ve improved the quality of workplaces around the globe.”

Other people claim that newer kids on the block that followed ‘Agile’ – labels such as ‘DevOps’, ‘Modern Agile’, and ‘Strategic Agility’ – will ‘do it this time’. Here we see the first stage of the fad lifecycle beginning again.

Lean is dead

The term ‘Lean’ first gained widespread popularity after the success of the book ‘The Machine that Changed the World’ (Womack, Jones and Roos, 2007, first published 1990).

The book became a bestseller, the term ‘Lean’ became widely known and a movement duly spawned. It moved through the fad lifecycle, spreading not only in manufacturing but also into service organisations and technology creation.

In the West, ‘Lean’ has often been promoted as the Toyota System in a box. Taiichi Ohno, the man who developed the Toyota System, insisted it shouldn’t have a name at all lest managers expect it to literally come in a box. Ohno was quite prescient, as this was the very marketing opportunity many early and recent Western ‘Lean’ promulgators tapped into, and they did so successfully, moving ‘Lean’ through the fad lifecycle.

In recent years there has been growing criticism of ‘Lean’, the Western attempt to reproduce the innovations in manufacturing practice first developed at Toyota in the 1950s.

Two of the authors of influential books on ‘Lean’, Mike Rother and Jeffrey Liker, highlighted the lack of sustainable results in an Industry Week survey which found that:

“only 2 percent of companies that have a lean program achieved their anticipated results” 

Rother kick started the fad lifecycle again by proclaiming that what was needed was a new label called ‘Kata’, duly publishing a ‘Toyota Kata’ book along with ‘Improvement Kata’ and ‘Coaching Kata’ practice guides.

More recently Jim Womack, one of the authors of the book ‘The Machine that Changed the World’ and founder of the Lean Enterprise Institute stated:

“… we need to acknowledge that our efforts to dramatically transform large, mature organizations haven’t worked and aren’t going to work, even when these organizations encounter crises.

Similarly, we need to acknowledge that our traditional ways of teaching lean methods through workshops and explaining our ideas through workbooks are at a point of diminishing returns.”

Just as Highsmith did, Womack then rationalised the failure:

“Yes, after so many years, I’m disappointed in how far we have gotten in spreading lean thinking … as a community, we will need to rethink our tactics, stick to our purpose, and better understand the challenges preventing us from staying on course.”

‘Lean Startup’, started, stalled and died

In addition to ‘Agile’ and ‘Lean’ and there are two other tools that have gained notoriety; ‘Lean Startup’ and ‘Design Thinking’.

‘Lean Startup’ is a methodology for developing businesses and products, which aims to shorten product development cycles by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and validated learning.

It is described as an intersection of customer development – which offers a way to find, test and grow customers – and ‘Agile’.

In 2008, Eric Ries started the fad lifecycle with ‘Lean Startup’, duly publishing a book called ‘The Lean Startup’ in 2011. It sold like hot cakes becoming a bestseller. Ries quickly became in demand on the conference circuit.

‘Lean Startup’ advised to use a new concept called a ‘Minimum Viable Product (MVP)’, then, based on user feedback loops, make small, fast incremental changes, evolving the design into something that customers can’t live without. As Eric Ries describedThe minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.’

Diagram: Process for Lean Startup. Source: The Lean Startup, Eric Ries, 2011

Terms such as ‘MVP’, ‘Build-Measure-Learn’, ‘Validated learning’, and ‘Pivoting’ entered the technology production and transformation lexicon. ‘Pivot’ became so overused that it made its way into a cartoon in the New Yorker where a couple, sat at a table outside a café, had the caption underneath “I’m not a leaving you. I’m pivoting to another man.”

Just as Ohno was prescient about ‘Lean in a box’, so was Ries: “Throughout our celebration of success of the Lean Startup movement, a note of caution is essential. We cannot afford to have our success breed a new pseudoscience around pivots, MVPs, and the like.”

However, this is what happened. Coupled with fear marketing around ‘being disrupted’, consulting firms latched onto concepts like MVPs with feverish activity. Other labels such as ‘Enterprise Lean’ arose, piggybacking concepts started in ‘Agile’, ‘Lean’ and ‘Lean Startup’, but this time applied to enterprise organisations. Another example of selling ‘Lean in a box’. A new role called the ‘intrapreneur’ became fashionable – quasi Richard Branson’s – except they were suggested to be managers within an enterprise organisation with attributes of entrepreneurs and startup founders.

A movement had been born that quickly made its way into the ‘Mainstream marketing and selling’ stage of the fad lifecycle.

Did it deliver on its promise? Do less startups fail? Are enterprise organisations full of intrapreneurs? Or is it entering the latter stages of the fad lifecycle?

Predictably, articles appeared claiming ‘Lean Startup is dead’, ‘Lean Startup, and how it almost killed our company’ and ‘What’s wrong with the lean startup methodology?’.

Other labels began to kick start the first stage of the fad lifecycle, for example, ‘Minimum Loveable Product (MLP)’, ‘Minimum Desirable Product (MDP)’, ‘Minimum Valuable Product’, and ‘Riskiest Assumption and Test (RAT)’.

In his article for ‘startup daily.’ titled ‘Is the lean startup dead?’ Luke Fitzpatrick, who teaches startup entrepreneurship at Sydney University stated:

“Eric Ries, admitted that his theory was developed for startups particularly in San Francisco, and may not work for places outside of the United States. Ries has also said that the lean methodology probably wouldn’t work for startups like Facebook or Uber.”

Ben Silbermann co-founder and CEO of Pinterest, now worth USD 1.57 billion, said he was grateful he didn’t read Lean Startup in the early days of Pinterest because it might have convinced him to give up at that point.

‘Design Thinking’ out-thought

Lastly, we come to ‘Design Thinking’.

If we were to give an award for the best-marketed tool at the executive level, it would go to ‘Design Thinking’. In testament to this, the large consulting firms and corporations have been snapping up design agencies.

Even though ‘Design Thinking’ has been evolving since the 1960’s, it is only more recently as an umbrella term that it has achieved fame and continued to gain popularity.

Tim Brown, CEO of IDEO, and Roger Martin, author of books such as ‘The Design of Business: Why Design Thinking is the Next Competitive Advantage’ helped popularise ‘Design Thinking’ moving it through the fad cycle.

‘Design Thinking’ has become so well marketed, that it is now taught at Stanford University, and you can obtain a Master of Design/MBA at the IIT Institute of Design.

Richard Perez, a Director at Hasso Plattner Institute of Design Thinking at the University of Cape Town, extols the benefits of ‘Design Thinking’: “Design thinking helps to break down silos across corporate departments. With multiple disciplines around a table, it’s possible to bring new perspectives to a problem within a structured framework for working together.”

David Campey, co-founder of Afrolabs and Lean Iterator agrees: “The hidden gem of design thinking is the multidisciplinary team,”

In addition, its proponents argue that ‘Design Thinking’ is the missing component from ‘Agile’, ‘Lean’ and ‘Lean Startup’, where ‘Design Thinking’ is the starting point before development occurs, used to identify the problems to solve – sometimes problems people don’t realise they even have.

Perez continues: “The discovery phase is critical in design thinking. Most of the work is focused on developing a human-centred understanding of the problem before going into solution mode.”

Diagram: Process for Design Thinking. Source: https://commons.wikimedia.org/wiki/File:IDEO_process.png

Donald Norman, author of The Design of Everyday Things explains: “Designers don’t search for a solution until they have determined the real problem, and even then, instead of solving that problem, they stop to consider a wide range of potential solutions. Only then will they converge upon their proposal. This process is called Design Thinking.”

There is no doubt ‘Design Thinking’ has caught on in both the private and public sectors. In evidence of this, the stated aim of the ‘Explore Design 2017’ conference in Canberra, Australia was billed as a ‘whole of government initiative, responding to a growing need across the public sector to use design thinking to collaboratively develop more impactful policies and services.’

It goes on to state ‘… the event focuses on how we can use design thinking for developing and improving policy development and service design.’

These examples show that ‘Design Thinking’ has well and truly passed through the ‘Mainstream Marketing and Selling’ stage of the fad lifecycle.

Now widely in use, has ‘Design Thinking’ delivered on its promise of breaking down silos across corporate departments? Are results matching intent, or are previous proponents now dreaming up new labels because ‘Design Thinking’ has entered into the ‘Fad begins to die and rationalisation begins’ stage?

Bruce Nussbaum, Professor of Innovation and Design at Parsons School of Design, and an award-winning writer who describes himself as one of design thinking’s biggest supporters called ‘Design Thinking’ a ‘failed experiment’.

Nussbaum recommends that we should move onto a new label (kick start the fad lifecycle) called ‘Creative Intelligence’.

In addition to Nussbaum, other ‘thought-leaders’ have come up with new labels to replace ‘Design Thinking’ such as ‘Design Doing’, ‘Design Driven’ and ‘Product Thinking’.

Commenting on Nussbaum’s ‘failed experiment’ proclamation, in his article ‘Is Design Thinking a “Failed Experiment?”’, John K. Coyle, Design Thinking & Innovation Expert, Author and Professor of Innovation, rationalises the failure and lays the blame on the culture and mindsets in organisations:

“[I] strongly agree with Bruce that many many design thinking efforts, particularly at large organizations, failed. I worked for years trying to bring the mindset and process of design thinking to large organizations and by far the mindset element was often the missing ingredient.”

Once again, we are into the rationalisation stage.

A way out

When we teach students on Masters courses, we impress upon them the need to ask every lecturer who teaches them tools two questions:

  1. Who invented this tool?
  2. What problem was he or she trying to solve?

Students are then encouraged to ask themselves: does my organisation have this problem?

It never ceases to amaze us how few lecturers can answer the two questions. They, like the commercially-motivated toolkit sales people, usually react defensively when unable to answer the questions and assume tools have universal application. These actors have produced an army of fools with tools.

These two questions offer a way out of the fad lifecycle – it helps us recognise wrong-headed thinking that churns out fads, and enables us to avoid the trap of buying into tools that are just more of the same – tools and labels that apply the same logic that created the problem in the first place.


If you would prefer not to wait for answers, senior leaders who have crossed a Rubicon, completely re-thinking their ideas about management, who have liberated technology, and built a generative service organisation that produces extraordinary results will each be talking at our upcoming Progressive Leaders Summit at the Melbourne Arts Centre on the 2nd November.

Further articles in this series:

The greatest challenge is management resistance (Déjà vu)

Déjà vu is the phenomenon of having the feeling that the situation currently being experienced has already been experienced in the past.

I have this happen to me regularly. Let me give you an example. I recently read a report titled ‘Insights into how to keep up with today’s changing world‘ written by the Australian Transformation and Turnaround Association. I recommend reading it.

The report was written after surveying transformation and change leaders, in over 900 businesses, covering industries from banking and finance, manufacturing, technology, consulting, government, academia, and health.

When the question was asked ‘What is the greatest challenge facing your organisation this year and next?’ – a whopping 71% of respondents answered: ‘Management resist change’. It was followed closely by ‘New technology & business models’ which 67% of respondents also identified.

When I read this, it triggered a feeling of déjà vu. I was sure I had heard this before…

I looked around at some old articles and found one written 25 years ago titled: ‘Improving the performance of workgroups through information technology’ by Clive Holtham.

In 1992 Holtham stated:

The failure to improve the effectiveness of work groups often lies for less in any technical dimension than deep in the management style and culture of an organisation. If key strategic steps are not taken from the top of the organisations, no amount of effort at middle levels can compensate for this

Déjà vu!

Holtham is right when pointing to the top of organisations. We shouldn’t just limit management resistance to the often criticized ‘middle-management’ – or the ‘frozen middle’ as Peter Drucker termed them. A good example of this is when the CEO of one of Australia’s biggest banks announced that his organisation was embarking on a transformation that will move away from a traditional hierarchal structure, and yet, in that same announcement, the CEO also stated that the transformation would cut in two levels below him.

As with most problems that organisations are trying to solve, the problems have existed for a long time. Over the course of time, various frameworks, methodologies, and approaches have come and gone. Panaceas that promise much and purport to solve these problems, turn into fads and die, bowing out to the next wave of ‘new thinking’. As the 71% of respondents to the question: ‘What is the greatest challenge facing your organisation this year and next?’ can attest, Holtham’s issues of management resistance, highlighted in the early 1990s, gives empirical evidence to the fact that the latest panacea does no better than its predecessors

As with most problems that organisations are trying to solve, the problems have existed for a long time. Over the course of time, various frameworks, methodologies, and approaches have come and gone. Panaceas that promise much and purport to solve these problems, turn into fads and die, bowing out to the next wave of ‘new thinking’. As the 71% of respondents to the question: ‘What is the greatest challenge facing your organisation this year and next?’ can attest, Holtham’s issues of management resistance, highlighted in the early 1990s, gives empirical evidence to the fact that the latest panacea does no better than its predecessors

Turning our attention to ‘New technology & business models’, the paradox here is that IT & Digital teams do not have what is required within them to make it work either, or to put it another way, IT & Digital is cultural too.

Over and over again, new technology and business model improvements are thwarted by forces that are not commonly-known, and are illusive to those attempting to make changes. This social inertia is because of the lack of effectiveness in current methods available to technology professionals and managers alike.

Our findings show that the 71% quoted in Australian Transformation and Turnaround Association report is an underestimate. We have found that almost 100% of transformation activities fail, or fail to sustain, due to being fought off by the management culture, or to be more precise, fought off by the organisational system the managers have created.

Why do I want to turn the attention to technological transformation? International Data Corporation (IDC) predicts worldwide spending on digital transformation technologies will reach $1.2 trillion in 2017. That’s a lot of money being spent on change. How’s it all going?

PointSource, in 2017, surveyed 300 decision makers in Marketing, IT and Operations, and published the results in their ‘Executing Digital Transformation study’.

In their key findings, PointSource reported:

Organizations are not confident in their visions for the future: Less than half (44 percent) of respondents are extremely confident in their organization’s ability to achieve its vision for growth, and 4 percent are not confident at all.

Why the lack of confidence? The study found that management culture was an issue. For example, when decision makers were asked ‘Does your culture support change and innovation?’ – it was found that:

  • ‘Department leaders do not regularly collaborate with one another: Just 30 percent of respondents say departments across their organization always come together to problem solve.’
  • ‘Respondents feel their company culture supports the ideals of innovation, but they cannot overcome a lack of internal collaboration that makes executing digital transformation difficult.’
  • ‘(76 percent) of respondents say their department competes with other departments in their organization for resources and/or budget.’

The report goes on to give rationalistic ‘Tips for organisations’ to help them solve these issues. One ‘tip’ is: ‘Organizations must work to remove silos so that all members can collectively contribute to an improved end product that exceeds audience expectations.’

I had that feeling of Déjà vu once again…

Back in 1992, Holtham wrote:

It is necessary to be able to create new, more fluid partnerships and alliances, both within and between organisations

It is almost as though we learn nothing from our experience. The same issues are prevalent 25 years later, supporting the reality that they are designed into the organisation.

Sticking with technological transformation, you can’t move today without bumping into an article or speech that highlights the perils of ‘Being Ubered’ (a phrase coined by Publicis Groupe CEO Maurice Levy, meaning your organisation is at risk of being disrupted and dethroned, and therefore you must evolve). The facts pointed out are stark; very few of the Fortune 500 companies listed in 1955 either still exist, have not gone bankrupt, or have not been merged or acquired by another firm.

Maybe this is another contributing factor for decision makers lack of confidence in their organization’s ability to achieve its vision for growth, as reported by PointSource.

When I was a child I used to watch a futuristic world where the Daleks in Doctor Who would warn “You will be exterminated!” – now I’m an adult, I encounter the world where consultants warn “You will be disrupted!”.

Unfortunately, the prevailing answer to disruption, promulgated by the consulting firms, is to invest in technology. With a $1.2 trillion trough, you can see why. The problem is that to fend off disruption, investing purely in technology isn’t the answer, the organisational operation must also change. Both go hand in hand. Various commentators are now voicing similar opinions. However, is it again Déjà vu?

Peter Keen, in his book ‘Information Systems and Organizational Change’, published in 1980, wrote

When technology is changed, the other components often adjust to dampen out the impact of the innovation. Many writers on implementation stress the homeostatic behavior of organizations and the need to “unfreeze the status quo”

Peter wrote this 37 years ago. It’s not like anyone hasn’t heard of him. If you look at his biography it states that he has been ranked in a number of surveys as one of the world’s top 100 thought leaders in business, the most cited researcher in the academic and business literature, and among the top ten IT consultants!

The challenges of ‘Management resist change’, ‘New technology & business models’, ‘Executing Digital Transformation’ and ‘Not being Ubered’ are all a product of the same superordinate issue; the command-and-control design and management of work, which has dominated organisations for years, and, without method, is remarkably impervious to change.

Peter Keen wrote back in 1980:

We now have adequate theories of implementation. We have less understanding of counterimplementation … overt moves, often made by skilled actors, to prevent a disruption of the status quo.

Technology has been an unwitting instrument and enabler of command-and-control. This is because IT & Digital professionals are being asked to solve problems from a command-and-control point of view, and it is that very point of view that needs to change if we want to enable the technology to work and work well, from the users’ perspective.

Applying a design thinking, human centered, lean-agile approach, by using service design and experience design experts in a command-and-control organisation, will result in little to no discernible change.

The PointSource study shows a deep lack of confidence in executing digital transformation. If organisations are to spend $1.2 trillion, there will be a lot of money poured down the drain. As a consequence, many of the people involved in such programs of work will see their hard efforts wasted. Who wants to put their heart and soul into creating something that is either cancelled or is not valued by the recipients?

This isn’t to say that people at all levels are stupid, or guilty of malintent. This is not about stupidity or intention. Everyone would say they are trying to do things better. What is more appropriate is to state the people are guilty but not to blame, in other words, the crux is that they have been let down by bad perspective and methods.

To solve the challenges of ‘Management resist change’, ‘New technology & business models’, ‘Executing Digital Transformation’ and ‘Not being Ubered’, technology professionals and managers ultimately require a different structure, different measures and, most importantly of all, a different philosophy; one where they move beyond command-and-control, where the prevailing thinking is aligned to customers, and where they see their job as adding value to the work. This will then solve these challenges for good.

If you would prefer not to wait for answers, senior leaders who have crossed a Rubicon, completely re-thinking their ideas about management, who have liberated technology, and built a generative service organisation that produces extraordinary results will each be talking at our upcoming Progressive Leaders Summit at the Melbourne Arts Centre on the 2nd November.

Further articles in this series:

Learning to See; Learning to Lead

In 2014 I presented at the Agile Australia conference on how to sustainably improve performance in organisations using the Vanguard Method. InfoQ recorded the session, and they have published it here.


The videos that are used in the presentation can also be viewed in high quality here


Glyph Inventory 1_quote-open-2 We applied Systems Thinking from Vanguard. Systems Thinking is a fundamental way of examining the entire organisation, not just the IT component. It is a method to really understand what matters to the customer, to understand the dysfunction of current methods, measures and metrics, to get people who do the work, to experiment locally to design new ways of working. It is incredibly profound. I could talk another 3 hours just on Systems Thinking!

Patrick Eltridge, Former Telstra CIO, 9th December 2014  Glyph Inventory 1_quote-close-2

Title Slide.001

Part I of my free eBook has been published

This blog has been pretty quiet over the last 2 years. The reason for this is that I have been working on a free eBook entitled “Theories of Work: How We Design and Manage Work“.

The purpose of writing this book has been to educate and create curiosity. It’s all been written in my spare time. I am not interested in making money from it, I am more interested that nothing inhibits a reader from reading it.

There are three parts to the book, and each part will be published online as a Webisode on a new dedicated site www.theoriesofwork.com. The online format protects the content owner, and enables anyone to either read it, or listen to it (an audio version will be coming soon).

I have “road tested” some of this material, in both the West and the East, and there seems to be genuine interest in its content; validating my assumption that it would be worthwhile writing the book. You may have seen my 21st Century PMO talk last year which contained content from Part I, or you may have seen my talk in Japan which contained content from Part II. You may have also read Deming’s 14 Points on my blog which contains content from Part III.

I have drawn on many sources for the content of the book, and in doing so I have kindly been given permission to use content from various authors, scholars, academics, publishers, institutes, and private individuals, under the agreement that it was a free, independent and a non commercial offering.

I have just published Part 1: Origins of the Design and Management of work at www.theoriesofwork.com.

Perhaps this might be of interest to you and/or to people that you know. I hope you enjoy it, and if you do, please tweet or publicise it so that others may also hear about it.

Here is a list of the Design and Management Concepts that are covered in each chapter.

Introduction and Preface

  • Discoveries
  • Purpose of this work
  • Organisational Norms
  • Panaceas and Fads
  • Organisational Traps
  • The Western Management Trap
  • The Problem to Solve

Chapter One: Early Beginnings

  • Craft Production
  • Industrialisation, Manufacturing Systems, Factories, and Assembly Lines
  • Centralised Authority
  • Cost Accounting
  • Payroll
  • Time and Materials
  • Piece-work
  • Production Quality
  • Standardisation
  • Interchangeability
  • Mass Production, Make and Sell, and Batch Production
  • Economies of Scale

Chapter 2: Management Arises

  • The Organisation, Top Down Hierarchy, Hierarchical Responsibilities, and the Organisation Chart
  • Division of Labour, Line Executives and Staff
  • Decentralisation and Division of Responsibilities, Operating Units and the Departmental Divisional Structure
  • Specialization and Functionalisation
  • Working Hours, Child Labour, Unions and Workplace Inspection
  • Personnel Management
  • Management Reporting and Real Time Data
  • Cost Accounting
  • The Salaried Manager, Management Schools, Textbooks and Manuals
  • Standardisation of Tasks, High-Skill Tasks to High-Cost Workers, and Quality of Output

Chapter 3: Management Science

  • Scientific Management and “Taylorism”
  • Productivity Incentives; Payment by Results
  • Work Analysis, Work Breakdown, and Work Measurement
  • Best Practices and Benchmarking
  • Standardized Work, Standard Times, Production Standards, Work Instructions, Job Descriptions, and Work Inspection
  • Division of Responsibility; Planning vs Doing; Blue-Collar vs White-Collar jobs, and Functional Supervision
  • Process Improvement and Waste Removal
  • Time sheets, Employee Discipline and Employee Performance Records
  • Worker Efficiency, Worker Utilization and Worker “laziness”
  • Staff Suggestion Schemes
  • Management Consulting

Chapter 4: Scientific Management!  A Mental Revolution

  • Command and Control; A Global Management Mental Revolution
  • The Efficiency Expert
  • The Bonus System
  • Gantt Charts; Planning Work, Presenting Facts about Progress, and Scorecards
  • Getting Work Done on Time, Standard Times, and Service Levels Time and Motion Studies
  • Removing Idleness and Waste
  • Moving the Work to the Workers (the Moving Assembly Line)
  • Task Cards and Time Clocks
  • Worker Report Cards, Inspection of Performance, Performance Reviews, Removing “Dead Wood” and Laggards
  • Forced Employee Ranking; the “Bell Curve”
  • Inspection of Workers, Supervisors and Executives
  • Vacation Schedules and Records of Absence
  • Quick Fix Change Programs
  • Functions with Department Heads and Targets
  • Quality Inspection
  • Activity Based Accounting
  • Mass Management Education, Courses and Literature
  • Documented Best Practices, Codification of Method, Written Documentation and Instructions
  • Assessing Job Applications Through Tests
  • Breaking Work Down into Components, and Specialized Departmental “Factories”
  • Scientific Management Applied to the Office
  • The Head Office
  • Technology to Aid Efficiency
  • Fordism
  • Flow Production, Routinized and Intensified Labor, Analysis and Documentation of Processes
  • Consumerism; Build, Market, Sell, Service
  • International Operations and Franchising Systems
  • The 8 Hour Day and 5 Day Week
  • Company Discount Schemes

Chapter 5: Administration, Bureaucracy and Numbers

  • Financial Reporting Systems, Continual Financial/Operational Planning and Measurement
  • Key Performance Indicators, Performance Measures, Functional Revenue and Costs Accounting, Return on Investment, Return on Sales – and Sales to Assets, Return on Equity, Financial Targets Against Operational Targets
  • Standard Financial Ratios
  • Modern Cost Accounting Practices; Cost Accounts for Labor, Material and Overhead, Standard Costs, Variance Analysis
  • Corporate Budgeting, Budgets for Cash, Income and Capital, Flexible Budgeting, and the Program Budget System
  • Market Forecasting, Sales Forecasts and Planning
  • In Company Pricing Structures – Same Producer Cannibalization
  • Pricing Formulas and Market Based Pricing Systems
  • Autonomous Functional Divisions and Inter-Divisional Relations Committees
  • Mass Production Coupled With Customer Satisfaction
  • Planned Obsolescence; Annual Product Changes
  • Management Efficiency; a Reliable, Efficient, Machine-Like Process
  • Executive Education Programs, Management Schools
  • Coordinated Control and Decentralization
  • Management by Numbers, Financial Controls and Finance as a Dominant Function
  • Dispersal of Company Ownership and Shareholders
  • Classic Organizational Theory; Scientific Management, Bureaucratic Theory, and Administrative theory
  • Hierarchical Structure of Power, Clear Lines of Authority and Control,
  • Rules and Regulations
  • Organizational Principles
  • Bureaucracy, Bureaucratic Principles, the Role of a Bureaucratic Official
  • Administrative Management Principles
  • Management Functions; Forecasting and Planning, Organizing, Commanding or Directing, Coordinating, and Controlling
  • The Seven Activities of Management – POSDCORB; Planning, Organizing, Staffing, Directing, Coordinating, Reporting and Budgeting
  • Short, Medium and Long Range Planning; Annual, Two-Year, Five-Year and Ten-Year Plans
  • Sociological Management and the Informal Organization
  • The Executive Function
  • Authority and Incentives
  • The Acceptance Theory of Management
  • Span of Control

Part I: Origins of the Design and Management of Work – Summary

  • The Prevailing Logic
  • A New Mental Revolution
  • Illusive Forces
  • The Need For Change
  • Escape
  • Beyond Your Mindset

Agile, Lean, and Kanban, Do They Change Management Thinking?

I have been an Agile practitioner for many years now, and was one of the early adopters of Lean thinking and Kanban for software teams. During that time I have observed remarkable improvements at the worker level, at the team level, and at the program level.

However what I haven’t seen when using these methods is a real change in management thinking, which has left me curious.

I am fortunate that over the last few years I have been able to hear opinions and stories from a community of Agile, Lean and Kanban practitioners; in those conversations I have seen a pattern.

People tell me that having applied either Agile, Lean, or Kanban, or some combination of the three, it has led to great results at the individual, project team and program level, matching my own experiences. We see many of these examples being written in books, presented at conferences, posted on blogs and message boards. All good.

People then go on to tell me (usually in the corridors at conferences, or over a drink at the bar, or over email) that it isn’t as successful as they would have liked, because they have been hindered by management; they tell me “management doesn’t understand the benefits” or “it’s the fault of the managers not to get it“. There is lots of talk of “bloody middle management” or the “frozen middle (management)”.

I hear of many Agile, Lean, or Kanban interventions that begin at the team level, starting off successfully, but which then bump into management who either kill it, limit it, or do nothing to help improve it.

People complain to me that “the Product Owner never shows up to the planning sessions or standups” or that “the stakeholders and managers never show up at the product demos or showcases” or  that “they just don’t understand what will happen if we don’t pay down some of our technical debt”, or  that “the management have received training but their behaviour hasn’t changed, they still do what they used to do before”.

I’m told thing like “managers still want us to be seen as busy all the time”, or “management has promised it will be delivered on a certain date without consulting us”.

Even those Agile, Lean or Kanban interventions that have executive IT support struggle to go beyond IT. I’m told that “the business isn’t engaged” or that “the business can’t dedicate someone to our team” or that “the business just doesn’t understand the benefits this will give them”. They also tell me that “Procurement are hindering us” or that “Finance and the budgeting process is hindering us” or that “It doesn’t fit within HR’s role profiles”.

Here is such a good video summing all of this up


People tell me “if only they would change, then everything would work as I want it to”.

Thought leaders tell me that making the work visible will provide transparency and an environment of honesty. This in turn will build trust with stakeholders and management. Transparency could mean a story wall, a Kanban board, published policies, information radiators, charts, metrics, data, product demos etc.

From my observations this new visibility has certainly increased awareness, and increased dialogue, but I have not seen too much evidence of it changing management’s underlying assumptions about the design and the management of the work. “Showing” isn’t the same as learning.

I hear from other practitioners that after they have left an organisation things start to revert back to how they were before, often not a complete reversal but certainly a back slide.

What I have learned through these conversations is that regardless of whether you are using Agile, Lean or Kanban it’s the underlying thinking; management thinking, that needs to be addressed. All of these methods are only as good as the thinking behind them.

I am curious if you have seen the same observations I have listed above, have experienced the same limitations, or have you experienced a change in management thinking via the use of Agile, Lean and Kanban. What other positive results have seen from your usage of Agile, Lean and Kanban beyond the team level and where do you see their limitations?

As a footnote, my curiosity into all of this has led me to search for the roots of traditional management thinking. I have made some amazing discoveries. These will be published shortly in a series of Webisodes on this blog.

Deming’s 14 Points

W. Edwards Deming’s 14 points are the basis for transformation of industry. Adoption and action on the 14 points are a signal that the management intend to stay in business. aim to protect investors and jobs. Such a system formed the basis for lessons for top management in Japan in 1950 and in subsequent years.

The 14 points apply anywhere, to small organisations as well as to large ones, to the service industry as well as to manufacturing. They equally apply to any division within a company and to it’s suppliers.

As you read through each of the 14 points below, ask yourself if they still apply today, either within your current organisation, or within organisations you have recently worked for. The answers may be surprising.

1. Constancy of purpose:

Create constancy of purpose toward continual improvement of product and service, with a plan to become competitive and to stay in business.

Management have two concerns. One deals with running the business on a day to day basis. The other deals with the future of the business.

They must have clarity on the questions; what are we doing, and why are we doing it?

The answer to these questions requires knowledge and looking to the future. It is the difference between short term and long term thinking; the tortoise and the hare.

Problems of the future require constancy of purpose, and dedication to improvement.

Create constancy of purpose toward continual improvement of products and service, allocating resources to provide for long range needs, rather than only short term profitability, with the aim to become competitive, stay in business and to provide jobs.

To stay in business requires that leaders spend time on innovation, research and education. They must constantly improve the design of their product and service.

Purpose is an intent, a goal, a vision of some future desired state. To have constancy of purpose then one must first have a purpose.


2. The new philosophy:

We are in a new economic age, created in Japan. Management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.

Improvement never stops. The system is capricious, erratic, it will affect people in different ways from one month to another. Which is why you need continuous improvement, it can never finish as change never finishes.

The customer demands and tastes change very fast, and the competition in the market grows at a rapid rate today.

Henry Ward Beecher said “Philosophy of one century is the common sense of the next”; we have to accept new philosophies according to the market trends and technology revolutions.

Learn and adopt the new philosophy, one of cooperation to everyone’s benefit.

Management must awaken to the challenge, learn their responsibilities and take on leadership for change.

We are in a new economic age, created in Japan. We can no longer live with commonly accepted levels of delays, mistakes, defective materials and defective workmanship. We cannot accept today, the levels of error that could be tolerated yesterday. Defective products and services are a cost to the system.

Only management is in a position to do something about the vast majority of errors. Transformation of Western management style is necessary to halt the continued decline of business and industry.

Its management’s task to remove the obstacles that prevent people from doing their jobs correctly.


3. Cease dependence on mass inspection:

Eliminate the dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.

You can not save money if you are more worried about money, than you are about quality.

Cease dependence on mass inspection to achieve quality. Mass inspection is not reliable. Inspection sound right, but it is wrong.

You can’t inspect quality in, yet we have organisations using ISO and audits as a means to prove quality.

Routine inspection is the same as planning for defects, acknowledging that the process isn’t correct, or that the specifications made no sense in the first place. Inspection is too late as well as ineffective and costly.

Instead require statistical evidence that quality is built in.

Quality doesnt come from inspection, but from improvement of the process. Improve the process so that defects aren’t produced in the first place. This eliminates the need for inspection on a mass basis.

Eliminate the need for mass inspections, as the way of life to achieve quality, by building quality into the product in the first place. Require statistical evidence of quality improvements.

You can not save money if you are more worried about money, than you are about quality.


4. End lowest tender contracts:

End the practice of awarding business on the basis of price tag along. Instead, minimise total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.

Without adequate measures of quality, business drifts to the lowest bidder, therefore the result is low quality and high cost.

Price has no meaning without measure of the quality purchased.

End the practice of awarding business on a price tag alone. Instead, require meaningful measures of quality along with price.

Reduce the number of suppliers for the same item, by eliminating those that do not qualify with statistical and other evidence of quality.

The aim is for both parties to work together, by minimising variation to increase quality, and to minimise total cost (not merely initial costs) for both parties.

This may be achieved by moving toward a single supplier for any one item, on a long term relationship of loyalty and trust.

It will lead to continuous improvement between both parties and as a result you will get quality supplies at reduced costs. This is why Japanese manufacturers are so closely aligned to their suppliers.

We often spend lots of time and money to find better suppliers and shift rapidly between them for slight monetary gains. Instead of getting vendors to compete on price think long term. Purchasing managers have a new job and must learn it.

Today many organisations just outsource to the cheapest supplier, and often to multiple suppliers within the same business unit or project.


5. Improve every process:

Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.

Constantly improve the production and service system to improve quality and productivity, thus decreasing costs.

Accept nothing is ever good enough. Improve constantly and forever every process for planning, production and service.

Improvement isn’t a project with a finite end. Instead, think continuous, never ending improvement.

Institute innovation.
Everyone should search continually for problems in order to improve every activity in the company, to improve quality and productivity and thus to constantly decrease costs.

Finding what’s wrong is not improvement. Plugging leaks is not improvement. Don’t look at outcomes or defects, instead look at what produces the defects.

There should be continual education on waste and continued improvement of quality in every activity, this will yield a continual rise in productivity.

It is management’s job to work continually on the system (for example work design, incoming work, improvement of tools, supervision, training and retraining). There in no stopping point in the process of quality management.

The enterprise system and services must keep growing indefinitely in order to catch up with the competitive market.


6. Institute training on the job:

Institute modern methods of training on the job.

Provide learning and development. Institute training on the job, training for new skills.

People learn in different ways. Training must be totally reconstructed.

When training, people need to understand what the job is and why it is being done.

Training must be done on the job, learning by doing; going into the work and experimenting with work methods and new ideas, studying the results, and striving for perfection.

A trained worker has more productivity and quality than an untrained one, so giving training sessions will drastically improve the quality of the person, and also directly helps in better performance with regard to product quality.

Institute modern methods of training on the job for all, including management, to make better use of every employee.

New skills are required to keep up with changes in tools, methods, techniques, product and service design.


7. Institute leadership of people:

The aim of management should be to help people to do a better job. Management is in need of overhaul.

Leadership is required not supervision.

Leadership is in need of overhaul, the job of leaders is to help people.

Adopt and institute leadership aimed at helping people to do a better job.

Adopt and institute principles for leadership improvement.

The emphasis of management must be changed from sheer numbers to quality. Improvement of quality will automatically improve productivity.

Management must ensure that investigation and actions are taken on reports of inherited defects, system conditions, poor tools, fuzzy operational definitions, variation and all conditions detrimental to quality. You can’t delegate quality, its a road to failure.

The basic principle is that it’s the managers job to coach their staff and improve the system

  • Firstly, they spend time in the work reinforcing the organisations commitment to its customers and to quality.
  • Secondly, they devote time to ensuring the staff doing the work have everything they need to be able to serve the customer.
  • Thirdly, when they have a decision to make about either of the above they get data to base their decisions on. There is no knee jerk, instead they get knowledge.


8. Drive out fear:

Drive out fear so that everyone may work effectively for the company.

Extinguish fear so everyone may work effectively for the organisation.

Build trust. Cooperation and collaboration requires a whole different set of values and relationships than that used in the outdated command and control method.

People are afraid of change, any attempt to make things better will lead to a fear of the unknown.

Many organisations are run by fear; fear of not getting their bonus, being afraid that they can’t meet their annual rating, or fear that they will be low on rating ladders.

To achieve better quality people need to feel secure. We need to eliminate fear so that everyone may work effectively for the company. Fear will disappear as management improves and as employees develop confidence in management.

Driving our fear is part of at least 8 of the 14 points.


9. Break down barriers:

Break down barriers between departments. People in research, design, sales, technology and production must work as a team.

Break down barriers and silos between departments. In other words build a system.

Traditionally each silo becomes independent kingdoms, each trying to maximise their own figures.

People in research, design, sales, technology and production must work as a team to be able to foresee any production problems, and potential product or service issues.

Unless staff work jointly in a spirit of co-operation, each area will try to do what is best for itself, rather than whats good for the organisation. It means cooperation not competition, everybody wins if the system wins.


10. Eliminate exhortations:

Eliminate the use of slogans and exhortations for the work force asking for zero defects and new levels of productivity.

  • Eliminate work standards (quotas). Substitute leadership.
  • Eliminate management by objective. Substitute leadership.
  • Eliminate management by numbers, numerical goals. Substitute leadership.

Eliminate slogans, warnings and targets for the work force asking for zero defects, doing it right first time and new levels of productivity. Such urging only creates hostile relationships.

Posters ask people to do what they can not do.

Posters and slogans on the wall stating “do it right first time”; who can do it right first time, when the stuff someone has to work on is already wrong?

The causes go beyond the power of the work force, as the majority of low quality and low productivity causes result from the system.

If the system has been built around quality, then it will be done right first time, so the slogan will be meaningless.

Ensure you substitute work standards and quotas with effective leadership and effective methods. Substitute management (by objectives, numbers and numerical goals) with effective leadership.


11. Eliminate arbitrary numerical targets:

Eliminate work standards that prescribe quotas for the work force and numerical goals for people in management. The responsibility of managment must be changed from sheer numbers to quality.

Numerical goals accomplish nothing.

Traditionally quantity rules over quality.

The cost of caring more about numbers than you do about quality is enormous, it results in high costs finding and fixing mistakes. That money spent produces nothing.

Focus on quality rather than quantity of product. Remove obstacles depriving workers of their right to take pride in their work. Managers must focus on quality, rather than sheer numbers.

Substitute aids and helpful leadership in order to achieve continual improvement of quality and productivity.

A system of continuous improvement yields greater production at lower costs. The focus is not on how many you make, it is on how well you make them.


12. Permit pride of workmanship:

Remove barriers that rob workers and people in management of their right to having pride in their work. This means, for example, abolishment of the annual or merit rating and of management by objective.

Remove the obstacles and barriers that deprive workers, and people in management, of their right to take pride and joy in their work. This implies abolition of the annual merit rating (appraisal of performance) and of Management by Objective, all of which creates conflict and competition.

These barriers to pride (a basic human need) among other things, results in low morale and absenteeism.

We need people to have pride in their work, not in their ability to meet ratings.

Again, the responsibility of Team Leaders, Managers, Directors and senior leaders must be changed from sheer numbers to quality.

Fixing points for employees, and ranking them inside the company, infuses competition within that organisation. We want collaboration not competition.

Involve employees, at all levels, in the process of improvement. Supply workers with the proper methods, materials and tools. Managers work on the system that is impeding performance.


13. Encourage education:

Institute a vigorous programme of education and self-improvement.

Institute a vigorous program of education and encourage self improvement for everyone.

What an organisation needs is not just good people; it needs people that are improving with education.

Education may not be in a subject that is connected to their work.

Self improvement keeps people’s minds developing. Point 6 is training for the job, point 13 is elevating people’s minds.

Advances in competitive position will have their roots in knowledge. No organisation can survive with just good people, they need people that are improving.


14. Top management commitment and action:

Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.

Put everybody in the organisation to work to accomplish the change.

Develop a critical mass that will bring about the change; a critical mass including top management.

Create a structure in management who take an active part and who spend time in the work reinforcing the 14 points, and the organisation’s commitment to it’s customers and to quality.

Managers should devote time to ensuring the staff doing the work have everything they need to be able to serve the customer. They use data and real knowledge obtained from the customer’s point of view to make decisions.

Without such a structure no viable long-term benefits will be achieved.


The 14 points are not a menu you can pick and choose from. Deming intended you use all 14. They are one philosophy.

“The way not to depend on mass inspection (point 3) is to continually improve the process (point 5), to do that you will need quality supplies (point 4), finding a quality supplier takes time (point 1), to do so you will need to adopt the philosophy (point 2)” Lloyd Dobbins

“We want our people to work together, but its hard to do so without point 8, 9, 10, 11 and 12.” Lloyd Dobbins

The 14 points apply anywhere, to small organisations as well as to large ones, to the service industry as well as to manufacturing. They equally apply to any division within a company.

“The 14 points all have one aim, make it possible for people to work with joy and pride” Deming

If you want to learn more about where our current theories of work came from, which led Deming to write the above, then you may wish to read my free ebook entitled Theories of Work: How We Design and Manage Work.


Source: CC-M Productions, Inc. 7755 16th Street, NW Washington, DC 20012 ManagementWisdom.com (800) 453-6280wbob@cc-m.com

Source: Vanguard http://www.systemsthinking.co.uk/home.asp

Source: Vanguard Scotland http://www.systemsthinkingmethod.com/

Source: Illustrations by Pat Oliphant http://www.managementwisdom.com/freilofdem14.html

Over 100 Years Later and We Are Still Doing the Same

Through research for my upcoming book and webisode series I have found that some of Fredrick Taylors methods are amazingly similar to those still applied today by some Lean or Six Sigma consultants.

Taylor was one of the earliest advocates of work smarter not harder. He was fixated on efficiency. His methods accomplished this aim by the study of a task and finding the most efficient, least wasteful, method to complete that task.

Taylor was famous for introducing the concept of studying work to seek ways to do it cheaper and faster. Today, Lean and Six Sigma consultants often enter an organisation on the same premise.


Taylor & Gantt (of Gantt chart fame who was associated with Taylor for 30 years) studied work with a stopwatch and timed the various activities to determine efficiency data. Today many consultants still time each work activity using a stopwatch.

Taylor & Gantt determined through their time studies how long a job should take, and introduced standardisation and piece-rate pay scales based on the most efficient timings. Today SLAs and monitoring against standard times are often recommended by consultants.

Gantt famously stated “every move a man makes must count”. Today this sounds remarkably similar to the lean waste of “motion”, with consultants studying each move a worker makes to see if any “wasteful motion” can be removed.

I recognise not all Lean and Six Sigma consultants are the same, with some going beyond the tools and not focusing purely on waste removal (e.g. respect the people), but many are repeating methods that were used pre 1900!

Interestingly Shingo cites Taylor as a source for inspiration for baselining along with his time and motion studies, but moved way beyond copying methods used by Taylor, Gantt and Gilbreth.

For those interested in more have a read of Taylor’s The Principles of Scientific Management and Robert Kanigel’s book The One Best Way.


To Change Culture, Change the System

In John Seddon’s latest news letter there was a piece called It’s not the people, stupid.

Returning to the problem that managers think they should manage people, a reader sent me this.

A bank is training staff in “The One Best Customer Experience”. The big idea is that the best customer experience engages the 5 senses.

To engage the customer’s 5 senses staff are told to:

  • Shake the customer’s hand when they come in for an appointment and shake it as they leave (touch)
  • play the bank’s own radio station in the branch (sound)
  • make sure that all branches look exactly the same so the customer knows what to expect (sight)
  • make sure the aroma plug- in is topped up and working (smell)
  • and ask whether the customer drinks tea or coffee and have a cup ready for them when they arrive for an appointment (taste)

You couldn’t make it up.

If only the leaders knew the futility of this; in Deming’s terms it’s working on the 5%.

I wonder how much money they are wasting doing so.

This is unfortunately all too common in our organisations. Leaders believe that to change culture, and improve service, can all be done by training their staff. They think that a breakthrough in knowledge is going to lead to a breakthrough in behaviour.

Another example is when many UK banks sent all front-line staff off to hotels to be “trained”, and then told to go back to their branches and “Love the customers“.

When the staff got back to their branches, and the customer came in with a request or a problem, they thought “Thats great, I can use my new training, they told me I could on the training course”.

BUT they needed the branch manager to give them authority, they needed to work together with their manager on solving problems, they needed their manager to talk to head office etc

What reaction do you think they got from their managers? “No, no, no! You do what I tell you to do” or “I cant change what you want, my hands are tied”.

Now what do you think happened? Morale got worse, not better, service got worse, not better.

Its amazing how much money is spent on these kind of training programmes, think how much it cost that bank to train all of their front-line people.
Yet leaders are happy to do it. Why? Because it sounds plausible.

If a consultant turns up and says, “Would you like your people to learn how to love your customer?” which leader is going to say no?

But as Peter Sholtes says

“Changing the system, will change what people do. Changing what people do, will NOT change the system.”

Deming studied how much variation in performance was down to the worker, or down to the organisational “system”, that people work within.

He (and Juran) found the majority of possibilities for improvement are in the organisational “system” (95%) with the remainder with the worker (5%).

As Deming said

“A bad system, will defeat a good person, every time.”

This is very easy to prove. Deming did so in his famous Red Bead Experiment. You can see a video of the Red Bead Experiment here.

If you want to test this out yourself go to any area that deals directly with customers and listen to customer demands. As customers complain about the organisation’s failure to do something, or do something right, look to see if this is down to the worker talking to the customer, or the cause is elsewhere. The majority will be caused elsewhere.

The workers themselves know this is the case. I once conducted the above mentioned demand experiment in a call center. The agents were surrounded by posters informing them to “Do it right first time” and to “Do your best”. The problem with the latter is that people already are.

When at the call center I spoke to one agent who expressed his frustrations at being unable to fix something that was caused elsewhere in the system:

It’s like hearing a baby crying in a locked room, and I don’t have the key.

In our organisations we spend a lot of our time working on the 5% using training, team building, away days, 1-2-1s, appraisals etc  Doesn’t it make more sense to work on the 95% ?

Even when leaders recognise it’s the system that hinders performance, they still believe that this too can be solved by training. Here is a great story by Russell Ackoff on the dangers of this kind of thinking. You can easily replace the words Systems Thinking with your favourite (or current) change programme e.g. Lean, Six Sigma, Agile, TQM, ISO 9000 etc

A number of years ago when I was working on a project for a major automotive manufacturing company, the Executive Vice President asked me if I would give a two-day course on systems thinking to the company’s top 200 managers and executives. I was delighted.

He said he wanted to restrict classes to 20 so that there would be plenty of discussion.

He had the following plan: four sessions of junior vice presidents, three of intermediate level vice presidents, two of senior vice presidents, and finally one of the executive office. The sessions were to be conduct from the lower level up.

At the end of the first session to junior vice presidents one said, “This stuff is great. I would love to use it but you are talking to the wrong people. I can’t introduce it without the approval of my boss. Are you going to get a chance to present it to him?”

I told I would in one of the later courses. He assured me he would hit his boss for approval as he came out of his session. In each of the first four sessions of junior vice presidents the same issue was raised.

In the first group on the second tier, with intermediate level vice presidents, the same issue was raised. I was told they also wanted to introduce systems thinking but could not do so without their bosses’ approval. Again I told them their bosses would eventually be exposed to the same ideas. In each of the three sessions at this level the same issue was raised.

In the two sessions involving senior vice presidents the same issue was raised. They asked if I would have a chance to present the material to the CEO and his executive committee. I said I would. I could hardly wait to hear what the CEO would say.

At the end of the session which he attended he said, “This stuff is great. I would love to use it. But I can’t do it with the approval and support of my subordinates. Are you going to get a chance to present it to them?”

This was a typical organisation, one in which the main operating principle was “Cover your ass.” Application of this principle produced a management that tried to minimise its responsibility and accountability.

The result was a paralyzed organization, one that almost never initiated change of any kind let alone innovation. It made changes only when a competitor made it necessary for it to do so.

When we have training classes that tell people what to do. That’s not going to do it. Humans will be filtering what is being taught through their belief systems. That’s why most cultural training fails.

Deming learned it’s not a problem of the people it’s a problem of the system that people work within. He found that if you want to change behaviour, then you need to change the system, and change management thinking that creates it. Doing so, culture change is then free.

So what is a better method? Well the starting point is a method that involves the initial ‘un-learning’ of what leaders think they know, to enable them to ‘see’ and reflect on their own system. This can’t be done in an office, or in a training room, it can only be done in the work, where the work occurs.

What Did Deming Really Say?

There is a really great Quality Digest Article by Davis Balestracci entitled “What Did Deming Really Say?”

An extract is below.

The 1980 NBC television show, “If Japan Can, Why Can’t We?” introduced the teachings of W. Edwards Deming to U.S. viewers and caused a quantum leap in awareness of the potential for quality improvement in industry.

Those of you familiar with Deming’s funnel rules (which shows that a process in control delivers the best results if left alone) will smile to realize that his rule No. 4—making, doing, or basing your next iteration based on the previous one—also known as a “random walk,” has been in operation for the last 30 years.

Jeff Liker, professor of industrial and operations engineering at the University of Michigan, beautifully describes the random walks that have taken place within the time spans of Six Sigma and Lean. In a private correspondence with leadership expert Jim Clemmer, Liker writes:

“Originally Six Sigma was derived from Toyota Quality Management (TQM) by Motorola to achieve six sigma levels of quality, and then through Allied Signal and GE it morphed to projects by Black Belts based on statistics to become a cost-reduction program – every project needs a clear ROI. In other words, we denigrated the program from a leadership philosophy to a bunch of one-off projects to cut costs. It was a complete bastardization of the original, and it rarely led to lasting, sustainable change because the leadership and culture were missing.”

“A similar thing happened to Lean when it got reduced to a toolkit (e.g. value-stream mapping, KPI boards, cells, kanban).”

“Lean and Six Sigma in no way reflect the original thinking of excellent Japanese companies or their teachers like Deming.”

Clemmer also cites multiple studies from 1996–2007 concluding that about 18 to 24 months after these various quality systems are launched, 50–70 percent of them fail. Liker concurs and feels that the four key failure factors, in this order, are:

  1. Leadership lacking deep understanding and commitment
  2. Focus on tools and techniques without understanding the underlying cultural transformation required
  3. Superficial program instead of deep development of processes that surface problems solved by thinking people
  4. Isolated process improvements instead of creating integrated systems for exceptional customer value

Virtually everyone agrees that the No. 1 barrier to improvement is still top management’s inability to be visibly committed to quality. Is this the “elephant in the living room” or as Clemmer calls it, “the moose on the table”?