Sunday, 16 February 2014

Whose "better" anyway?

When the corporate HR director asks the plant manager whether he is on track with his headcount reduction plan and where will he find additional heads to cut, do you really think she's thinking she's NOT doing the right thing? That she tells to herself, sure, I'm setting him - and the company  - to fail, but at least I'm achiving my objectives  and getting that bonus. Unlikely. She's probably thinking she is genuinely helping the plant manager to manager better his Human Resources (spooky, scary term).

Now, the plant manager hears this from the HR Director, but also from the Quality Director asking him to make sure all procedures are audited and respected. And from the CFO asking him to make sure all activities are on budget. The Supply Chain Director wants to evaluate and rank all vendors. And so on. Clearly, trying to satisfy all of them is a recipe for disaster, but that's exactly the kind of organizations we've build: the people in power around the division Head define "better" around the rules of their profession, and not around the only thing that counts: the customers who'll swap their hard earned cash for your product or service. Now what do they want? Not much:

  • something that works the first time around and doesn't breakdown too soon
  • somethign delivered when it's convenient to them
  • at a good price
  • and with a smile and a thank you
And then, only then, if you have an extram thingee to sell them, they're willing to listen. How hard can that be? Not much, if we focus on it. As in FOCUS. But how can the plant manager focus on delivering to customers when he's got all these other guys asking for so much of his or her attention?

Every organization is complex, which is fair enough. Consequently, we can't blame people for choosing easy problems to solve over difficult ones. As Michael Raynor explains in his 3 rules for success TED talk, better before cheaper and revenue before cost make obvious sense except that these are hard problems to solve: they're messy, strange and dicey. As opposed to cheaper and reducing costs problems which are tidy, familiar and reliable

On the other hand a pull system keeps the plant focused on customers and vendors. If the plant manager's line of sight is focused on:
  • On-time-delivery
  • Inventory turns
He or she will have to deal with, daily:
  • shifts in customer purchasing - as well as customer complaints (OTD only counts good products)
  • shifts in vendor patterns
  • Internal effectiveness issues
The pull system breaks down messy, complex problems in day-to-day simpler ones. By its very nature, the pull system tells you where to start. In the end it turns the messy problem of customer specific quality into a tidier problem of daily delivery and solving all customer complaints. No other known business tool does that.

What you allowe will continue. Without a robust pull system, your organization will continue to try and define "better" accoding to the division-of-labor narrow prism of professional certainties. The pull system lets us look beyond our solipcist, self-centered arguments and makes us deal with the fact that every day customer demand changes and that every day vendors do different things. Any system left to its own devices will follow its inner logic to the point of absurdity. A pull system is the proven way to lmake sure we're in constant touch with what's happening out there, and so we co-evolve adaptatively rather than work hard at failing. Without pull, there can't be any reliable better in an established organization. Without pull, the organization will only do what it was set upto do. In other words, even when results are poor, the organization is perfectly adapted to its performance. The pull system is the key to adapting ourselves out of our own systems.

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