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The supposition is prevalent the world over that there would be no problems in production or in service if only our workers would do their jobs as they were taught. Pleasant dreams. The workers are handicapped by the system and the system belongs to the management. ~ W.Edwards Deming
‘It’s all about the people. Our culture. Our values’.
This is a common cry from companies everywhere – proudly announcing to the world that they only hire the best. Come and work for us and we’ll let you make a difference.
It’s seemingly a meritocracy then. The best companies simply recruit better, more motivated people. So we should be able to solve problems like the NHS , for example, just through better recruitment and retention policies?
There’s an elephant in the room here: what if we overstate the effect of the people in our organisations, and we spend too much time addressing what they feel and think without addressing the more complex, systemic issues that influence how they perform or behave?
According to W.Edwards Deming 95% of variation in the performance of a system (or your organisation) is caused by the system itself and only 5% is caused by the people. This is also known as Deming’s 95/5 rule.
Deming’s point , outlined in his famous Red Bead Experiment, was that in most processes any effect that the individual may have is swamped by the system they are a part of, in fact the variability they cause is just part of that system overall. As management owns the system, the workers themselves have little influence over the outcomes. When it comes to people vs the system, the system always wins.
In his book Beyond Command and Control, John Seddon states the change HR – or any people function – needs to make is obvious. “It needs to work on the 95% of the system that governs performance, not the 5% that doesn’t.” The starting place for these functions is after the systems have been redesigned. In practice, the typical HR function spends most of its time dealing with the fallout of performance failure, or training people for a battle they can’t possibly win.
One of the best posts I’ve read this week comes from Steve Blank, who tells of his frustration in attending an “innovation hero” award ceremony. His point is that rewarding people for ‘innovation’ and how they have battled against the system is actually just perpetuating the conditions in the system that prevent innovation. “The emphasis is on process, procedures, and sustainment of existing systems. Deviations from that which create chaos and diverge from the predetermined are not welcomed, let alone promoted, and funded. They are eliminated.” Smart organisations recognise that people must be empowered to change the system – and instead of managers of process you need innovation leaders who shepherd ideas through an innovation pipeline.
I don’t 100% buy into the Deming rule – let’s remember that in his world he was talking from the perspective of a tightly controlled factory floor, assembling products. I don’t challenge the idea that the system affects performance, or that we pay too much attention to people problems. However, anyone who has worked in an organisation that has experienced a profound change in personnel has seen the disruptive effects (positive and negative) that people can have. They influence things way more than 5%.
For most of us our work is inseparably connected with the people who operate within the system. You can change a single person and suddenly the rules of the game have changed and everyone else operates in a different context. The same system maybe, but in a very different context.
However, overall this is why one-size-fits-all transformation approaches don’t work, and for good reason. Transformation measures need to be carefully calibrated to the complexity of different areas of the organisation. More attention needs to paid to complex systems and how they fit within the overall organisational design.
Many managers though don’t want to go here – it’s too much like hard work. It’s genuinely easier to focus on ‘leaderism initiatives’ and management BS than it is to change the system.
I contend that the root cause of a lot of this is short-termism. Of Boards and Execs are often focussed on backward looking performance metrics rather than sustainable goals that may take years to realise. Larger scale change dies or thrives from the top. Accordingly the role of Boards in understanding the process of transformation, and the innovation culture it requires to thrive, cannot be underplayed.
Will our organisations ever focus on genuine system change? The Net Zero and wider sustainability agenda might bring with it a shift to longer term thinking – of looking at change over a period of years , or even decades. To bring about these sorts of changes requires whole system change.
Whole system change is based on whole systems thinking, that the parts of a system are all connected and, therefore, influence each other. Rewiring this requires a commitment that few will be willing to make.
We are living in times when we need radical solutions to big problems.
The world is, as Seth Godin said, begging us to be remarkable.
We have an opportunity to be more different, more memorable and make more change than we ever have.
Who wants to win the race to mediocrity instead?
Related: The Hawthorne Effect: Why Employers Need To Be Cautious In Post-Pandemic Planning