Tuesday, 8.55pm
Sheffield, U.K.
A bad system will beat a good person every time. – W. Edwards Deming
Some people think management is about people and motivation and all around happiness.
It’s not.
People are important, of course. But the system they’re in matters more.
If you’re lucky enough to be born somewhere stable and prosperous then your life chances and outcomes are going to be different from someone with similar personal characteristics but living in a war-torn or unsettled situation.
We can’t blame people, especially if what they’re doing has a success rate equivalent to doing a coin flip.
Let me give you an example.
There are people in the world who trade for a living – they manage financial positions and buy and sell commodities and stocks and all sorts of things.
And they imagine that they’ll make lots of money if they’re smart at what they do – if they buy at the right time and if they sell at the right time.
But simple maths will show you that they’re probably going to lose money.
Let’s say you’re a trader and your job is to buy and sell a commodity, say copper.
Let’s say you call the bottom of the market right most of the time – you’re on the money around 70% of the time.
And let’s also say you call the top of the market right 70% of the time.
So, you buy when it’s cheap 70% of the time and you sell when the market is high 70% of the time – you’re going to make money, right?
Except, you’re doing two things, buying and selling. When you combine the probabilities (0.7 x 0.7) you have less than a 50% chance of making a profit.
You might as well give the money away.
The people that make the money are the ones that do one thing well. Like buying a good stock and holding onto it forever.
Or these days, just buying the whole market and getting on with the rest of your day.
Now, if your business is not a trading one but more of a service business, what should you focus on?
We are, if you remember, carrying on with a series of posts examining John Seddon’s book ‘Freedom from command and control’.
The thing you’ve got to work on is the system – not the people, not targets, not incentives, not motivation – but the system.
Whatever results you’re getting right now from your business are the results that your business system is perfectly designed to produce.
If you want things to change you have to work on the system.
So how do you go about doing that?
Well, if you’re an engineer the approach is pretty clear.
Engineers have to work with things that have to work. If you build a circuit and it doesn’t work then there’s something wrong with the system and you have to dig in and figure out what’s wrong.
You don’t just start pulling wires out – you first need a model to work with, some kind of circuit diagram of your system.
And that diagram can help you figure out where a problem might be – if the smell of a burning capacitor doesn’t alert you – and what you need to replace to fix it.
A business is like that, except the smell of burning might be a customer complaint or stressed staff.
Something is causing a problem in the system.
You need to learn how to talk to people and map out what’s happening and diagnose possible problems.
It takes time and effort and a willingness to spend the time and effort working with your team to figure out what’s not working and try something different.
And that’s all you can do – there is no perfect model – you just need to look at what’s going on, come up with some ideas, do some research, try changing something, see what happens, learn from that and go around the loop again.
We sometimes make things too complicated.
Give your team the freedom to get things done for clients.
Monitor the activity, the voice of the process, and get out of the way if everything is working.
When it’s not, ring the big red bell, stop everything and get involved, work together, and figure out what you can do to fix the problem.
As a manager, you are the only person with the power to change the system.
Therefore, that is the thing that you should focus on the most.
Cheers,
Karthik Suresh
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