In this episode, I am joined by Glenda Eoyang, who along with her coauthor (Royce Holladay), wrote the book, Adaptive Action: Leveraging uncertainty in your organization. Glenda is the founding director of the Human Systems Dynamics Institute.
We discuss her book and her approach to organizational uncertainty. You can connect with Glenda at the HSDI website.
In this episode, I am joined by Deborah Westphal, author of the book: Convergence: Technology, Business, and the Human-Centric Future. Deborah has been helping major companies craft their approach to a human-centered future for 30 years. She is a passionate humanist, operating in a technology-connected world.
In this episode, I talk with Storm Cunningham, author of the book, Reconomics: The path to resilient prosperity. Storm is the Executive Director of theRECONOMICS Institute in Washington, D.C. (The Society of Revitalization & Resilience Professionals) and editor ofREVITALIZATION(The Journal of Economic & Environmental Resilience). He has authored a total of three books (listed in the show notes, below). We discuss his process for the revitalization and renewal of degraded areas in a variety of natural & built environments.
Today I talk with Sam Yankelevitch, author of the book, Walking the Invisible GEMBA: Discover the hidden link between communication and quality. ‘Gemba’ is a Japanese word for the real place where the action happens — or the place where the crime is committed. Sam is an expert in finding and removing sources of waste in global supply chains — where waste is rooted in communication, distance, and culture. Sam has authored several other books on global lean methods and continuous process improvement, in addition to the one we discuss in this episode.
Sam Yankelevitch
You can connect with Sam on LinkedIn, or at his website >> https://www.samyankelevitch.com
Anthropologists tell us that anatomically modern humans (i.e., Homo Sapiens) emerged about 300 thousand years ago during the Pleistocene era on the African savannas. For over 95% of their history (until the present day), modern humans have been exclusively hunter/gathers, that is, they explored the bounty of nature in small bands, adapting their behavior as they encountered different environments. Few management skills were required other than communication and teamwork. The goal was the discovery and exploitation of food and other resources necessary for survival and continuation of the species.
While Homo Sapiens are not the first species that used stone tools, they took tool making to the next level to better extract value from, and survive in, different environments. In one sense, they were early knowledge workers. They developed and applied a body of knowledge about their environment to the search for food and other resources necessary for survival. A sense of freedom was available in this early form of group organization and management. Specialization of labor was likely along gender lines; the men did the hunting, while the women did the gathering (and nurtured the young).
About 12,000 years ago, horticulture and agriculture first emerged in what is called the Neolithic revolution. Key to this transformation was the domestication of certain plants and animals that could be produced using cultivation and herding practices. For example, the goat was domesticated about 10,000 years ago in Iran, emmer wheat about 11,000 years ago in the southern Levant, and rice about 10,000 years ago in China. The emergence of agriculture-based societies enabled permanent settlements and significant population growth. Whereas hunter/gathers survived with small team-based work groups, early agriculture-based settlements led to more formal types of organization. Early institutions undertook these functions (e.g., in the fertile crescent from Egypt to Mesopotamia) as irrigation, seed distribution, and grain storage were likely organized to avoid crop failure and famine. Widespread single-crop agriculture did not become common until the Bronze Age, about 6,000 years ago.
With settlements, further specialization of labor took place. Artisans such as the butcher, the brewer and the baker that Adam Smith idolized in his book Wealth of Nations (1776) became common. A series of industrial revolutions, beginning in the late 1700s in England and continuing into the 1900s, spread throughout much of the developed world as water power, steam power, and electric power were applied in turn to the production processes of factories and other venues.
The essence of modern capitalism is investment in, and the substitution of, capital equipment for manual work in the search for efficiency gains. By the early-1800s, a textile factory using a 100 HP steam engine could do the work of 880 men. One documented example ran 50,000 spindles, employed 750 workers, and could produce 226 times more than it did before the introduction of steam.
Still, up until the 1840s, US firms remained very small (just a few people). The owners managed, and the managers owned. At the time, transportation and distribution were facilitated by animals on the land, and by wind power on the seas. Commercial steamships were not common until after 1850. Bureaucracy was the new management technology of the mid-1800s and enabled the growth of large organizations, complete with middle management, such as the railroad and telegraph companies of the day.
So, is management best when it controls or when it enables freedom? If you look at the definition of management in the dictionary, you will come away thinking that it is largely about constraint — dealing with or controlling people and resources to achieve reproducibility and productivity. Since the Neolithic Revolution in agriculture, management has gradually imposed order and control on processes, in the service of normalization, standardization, and efficiency.
Certainly, management focused on efficient process control can provide benefits, depending upon environmental conditions. For example, total quality management (TQM) was a winning strategy for Japanese car companies that were conquering the American market in the 1970s and 1980s. Consumers of the time were looking for small, reliable, and efficient cars following OPEC-led gasoline price increases. So, normalization and standardization, and the reduction of defects that comes through various management approaches have been historically important beginning with the agricultural revolution, through the industrial revolution, and beyond. This thread of the story of management is primarily about efficiency gains, as well as meeting the demands of the market for quality.
Now, however, we are in the first half of the 21st Century. The environment has changed and is changing still. The introduction of the Internet in the early 1990s has served to disrupt the business models of many brick and mortar enterprises. Increasingly, large and formerly dominant organizations have become walking zombies as their business models have come under threat from upstart online competitors. For instance, Amazon, Netflix, and Airbnb are capturing, and bringing into their orbit, large portions of the transactions in various retail, entertainment, and hotel spaces, taking business from established brick and mortar players. Internet-based players are creating new intermediation models on a large scale, not tied to a specific location on the map but ubiquitous in cloud-based servers.
There has always been a tension between human agency, such as the individual’s freedom to act and to realize his or her dreams, and the organization’s need to control, normalize, and standardize processes to create reproducibility. Yet today, many workers are feeling trapped in their jobs, bound by bureaucratic processes and soul-draining performance management systems that prioritize adherence to key performance indicators (KPIs) over worker freedom and innovation. At a time when firms scarcest resource is innovation and creativity, management control remains heavy-handed (because it can). Gary Hamel notes that although most employees can purchase a $20,000 car in their personal lives, they need to get official permission to purchase a $200 office chair in their lives as an employee. What’s up with that?
Ironically, the hottest management trends of today (small agile teams using scrum techniques) are something of a throwback to the Pleistocene bands of early humans that exploited their environment through hunting and gathering techniques for survival. Exploring new environments and changing conditions requires freedom of action, and it is time for management to loosen control. Indeed, organizations could think of themselves as being in the Pleistocene again, in need of a modern band of knowledge workers to explore and understand the changing environment and identify new resources for survival. The next time you run into a C-suite executive that wants to impose KPIs on your unit, tell him or her to loosen up and go back to the Pleistocene. Homo Sapiens operated quite successfully in that way for over 95% of human history. It would be a return to our roots.
Unfortunately, today’s management philosophy and practice stand in the way. It is the programming and conditioning between our ears that holds us back. We can’t get to a better future if maximization of profit and shareholder value continue to be prime directives. In fact, these are merely arbitrary and self-serving goals that are unconnected to natural law.
A new management philosophy is required. From first principles, we know that an organization must find ways to exchange benefits with its environment if it is to survive. A new approach to management is emerging which acknowledges and accommodates this reality. It is called Management by Positive Organizational Effectiveness. It holds that the goal of every organization is the same, that is, to be effective within its environment. An organization becomes effective within this framework by serving its environment and being rewarded in return, exchanging different types of benefits in the process that are needed to survive and thrive. This approach places effectiveness above efficiency in the hierarchy of organizational performance.
When the goal of every organization is the same, management is no longer free to set objectives from the top down. Rather, teams at the periphery are empowered to ask, “how can I best serve my environment today.” Like the freedom of the Pleistocene bands, these new teams are set free to create a better future around specific product and service offerings, a future that not only benefits them, but that serves to strengthen the common good as well. Perhaps we have much to learn from our Pleistocene roots.
[The above content originally appeared in January 2018 as Episode 087.]
Charles G. Chandler, Ph.D.
Reference: Chandler, Charles G. 2017. Become Truly Great: Serve the common good through Management by Positive Organizational Effectiveness. Powell, OH: Author Academy Elite.
In this episode, I offer three stories that illustrate the power of storytelling. Stories can be used to knit threads together, shape how we see things, and derive power from the outcomes that they describe. If you are going to change the world, it helps to first illustrate how to change a small part of it in a story. [As a footnote, this content first appeared in September 2017 as episode 078]
Today we are at Episode 116 and I am calling it “The management technology your organization needs” [as a footnote, much of today’s content was originally released in May 2017 as Episode 65]. At the end of today’s episode, I will reflect on the fact that this is the 5th anniversary of the start of the podcast. Stay tuned for that. But, for now, on with the show.
The Management Technology Your Organization Needs. Technology is the application of scientific knowledge for practical purposes. When it comes to management technologies that can be used to guide the overall performance of an organization, new ones appear very rarely. One was introduced in 1911 by an American engineer, Frederick Winslow Taylor. Taylor’s technology (often called ‘Taylorism’) attempted to improve the efficiency of industrial firms. Taylor invented what he called ‘task analysis’ or ‘task management,’ later called ‘Scientific Management’ in his book by the same name. At the time, Taylor’s methods were meant to increase the productivity of unskilled manual workers by improving the efficiency of their tasks (using time and motion studies), thus increasing the efficiency of the firm in the process. Today we know these methods as part of industrial engineering.
The principles of scientific management were extended from industrial firms to other firms of the time by Henri Fayol in 1916. Today, Fayol’s 14 principles of management are widely known, and his 6 elements of management— forecasting, planning, organizing, commanding, coordinating, and controlling — still serve as an underlying core of management practice. While Fayol considered organizations to be largely closed systems, this would have been consistent with the drive for internal efficiency improvements that dominated early management thought. Efficiency is an internal measure which compares the ratio of outputs (such as products and services) to resource inputs.
Over a century has passed since Taylor and Fayol published their works. Looking back over the decades, Peter Drucker credited the management principles of Frederick Winslow Taylor with a 50-fold increase in the productivity of manual work during the 20th Century, an increase upon which rested, he noted, “all of the economic and social gains” of the times. The improved productivity of the manual worker created what is now called a “developed” economy. Taylor’s principles can be seen in the widespread application of equipment in production processes to allow workers to become more efficient and productive. As Taylor was the father of industrial engineering, Taylorism foreshadows and embraces all of the techniques that have served over the years to improve the efficiency of the worker and the quality of the end product. Despite its success, Taylorism focused on internal efficiency improvements alone, and did not focus on how well the organization was serving its external environment (including its customers).
That brings me to the new management technology that I want to focus on today. Unlike Taylorism, this new technology aims to improve the overall effectiveness of the organization rather than its internal efficiency. It deals with how well an organization serves its external environment (including its customers and other stakeholders). Organizational effectiveness has been the missing holy grail of management thought. It was given up for dead and labeled as an unworkable concept by scholars in the mid-1980s. That was because none of the prominent models that described effectiveness at the time could be verified in the field through direct observation.
That situation has potentially changed, however, with the publication of a new book: Become Truly Great: Serve the Common Good through Management by Positive Organizational Effectiveness (2017, by Charles G. Chandler). The book introduces a new model for organizational effectiveness that can be verified in the field by direct observation. It also turns out that Positive Organizational Effectiveness is the engine of greatness.
Let me clear about what I am discussing here. Organizations utilize many different technologies for different purposes within their production processes, but I am limiting my discussion of management technology to that which is used to judge the overall performance of the organization. The question of organizational effectiveness has long been recognized as being at the very center of this issue.
When it comes to judging the overall performance of the organization, current management technology is not reliable. Most organizations use the goal model, wherein the organization is judged to be effective if it achieves its goals. Even advocates of the goal model admit that not all goals are created equal, and few would argue that all goals relate to organizational effectiveness. Often, goal setters are simply admonished to set clear goals, with the emphasis on clarity. Another framework for goal setting calls for SMART goals (Specific, Measurable, Attainable, Relevant, and Timely). But it is not sufficient to set goals based on so-called SMART criteria, as these criteria do not ensure effectiveness.
The problem with organizational effectiveness has always been the need to define the concept in a way that would allow its verification in the field through direct observation. Until now that had proved to be elusive. The new technology I am describing is called Management by Positive Organizational Effectiveness, and it allows organizations to determine their effectiveness through a well-defined process that is verified in the field through direct observation.
The new approach departs from the goal model, which has remained dominant in the daily practice of management around the world, but with limited success. Many people are familiar with Management by Objectives, which is based on the goal model. The goal model serves an aging, and largely top-down, bureaucratic reality. Let’s call it “last century” technology. It is not reliable because it accepts arbitrary goals that may not be related to effectiveness (i.e., profit, shareholder value).
Management by Positive Organizational Effectiveness uses a new model, called the Outcome-focused Model, to determine effectiveness. Within this model, the goal of every organization is the same, that is, to be effective within its environment. Yet effectiveness does not operate here at the level of the organization as a whole; it operates just below that, at the level of its individual offerings to the environment. As such, efforts to improve organizational effectiveness focus on an organization’s portfolio of offerings that serve its environment.
The new management approach defines effectiveness as the conversion of the supply-side intentions of an organization into favorable demand-side responses in the external environment. Results chains are used to describe the linkage between inputs & outputs on the supply side, and outcomes & impacts on the demand side. The strength of expected outcome-level behaviors can be observed directly to verify effectiveness.
The new model focuses the attention of the organization on its external interface with its customers and stakeholders, and is encouraged to be in-tune with the immediate and future needs of these actors. The focus on expected externaloutcomes changes the way that outputs are designed and delivered because internal actors come to realize that outputs of the organization (including its product and service offerings) are simply waste without the achievement of expected outcomes (such as the favorable demand-side behaviors of uptake, adoption or use of those offerings). Many organizations are still driven by inappropriate objectives that promote efficiency rather than effectiveness. This can lead to false-positive indicators of effectiveness where true effectiveness may not exist. An outcome-focused organization avoids these problems by focusing its objectives on expected external outcomes, that is, on the behavior of external actors who can adopt and use its offerings.
While Taylor’s “scientific management” increased firm performance and manual worker productivity by increasing task efficiency, Management by Positive Organizational Effectiveness converts an organization’s offerings into relevant demand-side responses through the management of benefit exchanges at the supply/demand interface. If you are still using the goal model in business and continue to focus your primary goals on the maximization of profit or shareholder value, you need this new technology. In fact, every organization needs it because it can be applied to government, and nonprofits as well.
This episode has provided a brief explanation of a new technology to manage organizational performance, one that every organization needs. The approach is described in more detail in the book I have mentioned (Become Truly Great), for which there is a link in the show notes (below).
Before I go, let me note that it was five years ago that The Age of Organizational Effectiveness podcast began (February 2016). A lot has changed in the world since then, but the podcast, not so much. In the 115 episodes that have been produced in the last 5 years, I have taken you along with me as we visited 8 local organizations in Texas (including an airport, an arts center, a winery, a historical museum, a city government agency delivering water supply & sewerage services, a hotel, a library, and a university. I have interviewed 15 authors with books relevant to our podcast, 5 entrepreneurs who talked about their journey and one philosopher. In addition, I have produced 48 episodes myself on a variety of relevant topics, many of which contributed to my 2017 book (Become Truly Great) and a companion course. Along the way, I have had a few encore episodes as well.
I hope to continue this podcast as long my listeners stay engaged. Drop me a note to let me know what you would like to hear more of, or perhaps less of. I love to learn what you are up to, and how I can serve you better.
In this episode, I am joined by Adam Braus — an author, consultant, and university professor who lives in San Francisco, California. He focuses on change, innovation, and new forms of leadership. We talk about his recent book, Leading Change at Work, which offers a unique approach to bringing about change (nemawashi). You can find out more about Adam on his website.
In this episode, I interview David Childs, Ph.D., who is the author of The Organization Whisperer: The 12 Core Actions that Ripple Excellence through your Organization. Join us as we explore key areas of focus for any organization.
The twelve core actions described in the book are:
Communication;
Worth;
Purpose;
Family;
Decisions;
Plan;
Do;
Measure;
Processes;
Resources;
Relationships; and
Habit.
This episode was first broadcast in November 2017 as Episode 083.
In this episode, I am joined by Fred Spier, a retired senior lecturer in big history at the University of Amsterdam, The Netherlands. We discuss his most recent book, Big History and the Future of Humanity.
Fred describes how complexity multiplied during the expansion of the universe, beginning with the Big Bang and leading to the formation of stars, planets, and galaxies. Eventually, life got a start on planet Earth, culminating today in humans and their societies –which represent the most complex forms of life that we know of in the universe. All of this is surprising in a universe governed by the Second Law of Thermodynamics, which tells us that everything runs down and becomes less complex over time. It seems that complexity can increase and multiply over time in small pockets of the universe where the conditions are just right — as a result of energy flows through matter. Looking forward, humans face resource constraints and mounting entropy (wastes) on their home planet, which have already created severe management challenges.
Fred Spier holds a M.Sc. in biochemistry and a M.A. and Ph.D. in cultural anthropology and social history. Early in his career, he spent ten years in cultural-anthropological and social-historical research dealing with the religion, politics, and ecology of Peru throughout its known history, and the effects in the Andean village of Zurite.
In 1993, Spier became the driving force for teaching and investigating big history at the University of Amsterdam, about which he wrote two pioneering books (referenced below), as well as numerous articles. Spier is now writing a book about the history of the biosphere using a novel approach (more information can be found here).
For more information on today’s topic, you will find an introduction to ‘big history’ in Episode 066 of our podcast >> here. Also, check out Episode 102, entitled “Managing the next 10,000 years” >> here.
Charles G. Chandler, Ph.D.
References:
Spier, Fred. 2015. Big History and the Future of Humanity. 2nd Edition. Chichester (UK): John Wiley & Sons.
Spier, Fred. 1996. The Structure of Big History: From the Big Bang until Today. Amsterdam (The Netherlands): Amsterdam University Press.
