Friday, March 24, 2020

Are Your Systems Holding Your Business Back?

For five decades at least, organizations have been seen as "machines" you can make more efficient by redesign, removal of unnecessary parts and streamlining of what remains. Organizational systems have been constantly refined and updated; computers have reduced or eliminated clerical work; and technology has increased throughput and virtually eliminated manual labor. Productivity and efficiency gains have been dramatic. Yet most have come directly from the use of machines. Organizations have been far less interested in finding ways to allow the people in the business to contribute more—except through long working hours.

Today, this organizational model is running out of steam. After years of restructuring, reengineering and downsizing, there’s too little “fat” left. Even computerization seems to be reaching a point where the impact on profits and results is limited. Outsourcing is commonplace because it offers cost reductions by sending existing patterns of work to lower-wage countries.
Businesses need to look elsewhere for further productivity gains. To be effective in a globalized marketplace, they need to see beyond the old, mechanical, "do it faster" model of organization to more organic, natural models instead.

The Organization as Machine
When the ideal organization is seen as a predictable machine, management leads by creating systems that, like programs in a computer, direct the total operational, financial and technological actions of the business. Even the smallest change needs a change to some policy or procedure. That’s why it’s difficult and expensive. Preserving the integrity of those organizational systems takes precedence over anything else. Customers and suppliers must either accept what the systems offer or go without. In reality, customers move to someone who treats their concerns realistically. That’s how so many huge American corporations have lost out to overseas competitors. They put organizational efficiency and profit above the needs of their customer base.

In machine-like organizations, the people who work there are cogs in the machine: interchangeable, easily expendable and constantly restrained from doing anything that upsets existing procedures. You can see how inward-looking such organizations become. When systems and procedures drive everything, obeying them is the supreme source of organizational well-being. Numerical measures are everywhere, superseding reason, common sense, experience or intuition. “Making the numbers” is all that matters.

Slow Leaders know mediocre patterns of thought always produce mediocre results. Repeating the past necessarily produces a static business. Organizations are not machines, and never have been. Using people as dumb "parts" is wasteful and inefficient. Such a clumsy, blinkered way of operating makes organizations like machines in another way: it makes them inflexible, impersonal and vulnerable to any competitor that offers better service and greater responsiveness to customer needs. Change, if it comes at all, comes only through wholesale reengineering: a massive, expensive and disruptive experience that sometimes costs far more than it gains.

The Organic Alternative
There are alternatives. Complex, technologically advanced and adaptive ways of organizing have existed in nature for millions of years. It’s odd that people have been so slow to recognize that usefulness as models.

Nature works by slow but constant, small adaptations linked to a broad view of intention. Individuals within a species are free to find better ways at any time. Anything that works is swiftly copied and spread around. Learning isn’t the preserve of a few; it’s what everyone does. Indeed, learning is so essential to survival, any individuals who fail to learn swiftly leave the gene pool through predation. There's no mechanistic system. Nature relies on continual experimentation, always selecting the best answers to pass on to the next generation.

In organizational terms, this means encouraging new ideas at every level in the hierarchy, quickly noting the best and making them available to everyone else. The top team concentrates on refining the overall vision for the business. Those immediately below translate this vision into strategies and evaluate results, looking for what works best. Everyone else concentrates on implementing the strategies by tactical means, again looking for better ways of turning intention into results. What works is repeated. What no longer works is abandoned without fuss or regret.

It may look messy and unsystematic, but this approach is far more flexible and responsive to changes in the environment. It may also take a little more time at the start to get everyone to trust such a radical change; but continually finding and implementing better ways of doing things quickly becomes a normal part of daily work—not the preserve of expensive external consultants.

Organizations that adopt this kind of working find their results limited only by the power of their vision. Everyone is free to find innovative ways to increase progress. When they face problems, the emphasis is on discovering the causes and removing them for the future—not providing a limited, short-term word-around that ignores the underlying need for change.

Going Organic
Becoming an organic learning organization requires a major commitment to regaining a strategic approach and allowing human creativity, not technology alone, to propel the business forward. Policies and procedures become limited, temporary tools to achieve specific goals, instead of the sole means of organizing and measure of excellence. Systems are no longer treated with mystical reverence. People run the organization, not dogmatic procedures served by computers and mindless bureaucrats.

By staying within the bounds of conventional ways of working, organizations quickly become rigid, resistant to necessary change, and provide no better than mechanical levels of service. These constraints then limit effectiveness and hold back results. People don’t notice them because they are so familiar.

In the crazy, harassed state that results from a "make the numbers—or else!" culture, there's no time to learn, no time to seek out the underlying causes of problems, no time to think about future direction. Every action is the simplest possible; every problem is "solved" by a quick-fix workaround; every request that falls outside established procedures is a nuisance to be avoided or ignored.

There's always time to do what truly needs to be done, because taking any other action will be wasted effort. With productivity gains from the old approach beginning to peter out, changing to a more wholesome, organic way of running a business offers the only chance of continuing growth and improving returns.

Get off that hamster wheel of "making the numbers." Become instead the kind of exciting, open-minded workplace that focuses on fostering creativity, generating fresh solutions, constant experimentation, and a longer-term, more organic approach to running the business. Your employees, your suppliers and your customers will quickly show their appreciation via the bottom line.

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