Fourth Generation Management: Brian L. Joiner. Book Review by Stephen Parry

Brian L. Joiner

I recommend this book for practitioners working with Lean, Systems thinking or general operational improvement.

There are a many reasons why I like this book, it has some memorable insights and phrases. Such as `don’t work on costs, work on the causes of costs’.

Joiner also highlights how most managers manage their business without any theory behind their actions.. `We should be thankful if the action of management is based on theory…’

Joiner relentlessly pushes the notion that organisations must be `understood and managed as a `system’, while developing process thinking, making decisions on customer data and understanding the theory of variation’.

He then goes on to say that the typical management response to calls for improvement is to either 1) distort the system or 2) distort the figures instead of improving the system.

START AT CHECK.

Most people in the world of operational improvement will have come across the Deming PDCA (Plan Do Check Act) cycle, Joiner explains and supports this process very well but he adds a significant insight, what he says is, that when starting to make improvements you must start at CHECK, in fact he devotes a whole chapter to this important variation on Deming’s PDCA theme.

`Performing check is what most organisations fail to do. Check uncovers things we would just as soon not know, it forces us to look at the huge wastes in each of our activities and exposes it all, and the non productive or plain stupid things we have unknowingly been doing for years. It creates the gut level energy to do a better job of taking Action, of Planning and Doing’.

Joiner states that `a fundamental tenant is that nothing happens in a predictable, sustainable way unless you build mechanisms that cause it to happen in a predictable sustained way’

He talks about listening to management conversations for insights into the organisations real intent and focus he says … `The way top management spends its time and the questions they ask of each other and the rest of the organisation is critical in determining the focus of the organisation.’

The book goes on to explain how to reduce process variation, the sections about how managers respond to variation would be amusing if they were not real, i.e. how managers work on the people instead of working on the system and the injustice that results in addition to the loss in organisational performance.

Lean business consultants in Europe

THE ORIGINAL BANK TELLER STORY

A good example of system variation resulting in perverse decisions and behaviour is illustrated by an example Joiner uses in telling a real story about a bank teller, who on several occasions got rewarded for her performance and at other times chastised….finally, she was unlucky enough to loose her job. Later, when talking to a friend she said that she never understood why she being praised because she hadn’t done anything different and likewise the chastisement. Further conversation revealed that she had been a victim of system variation, the performance factors were attributed to her and not where they should have been that is to the system in which she worked. Essentially she had lost the Variation Lottery. He quotes Dr. Lloyd Nelson `failure to understand variation is the central problem of management’

Joiner also wallops the inappropriate use of standards (accreditation schemes like ISO and BSI) because they are a barrier to improvement and creativity. He argues that standards far from improving the organisation often result in a loss of performance. `They stifle creativity, deflect attention from customers, increase red tape and make work inflexible, while providing only the minimum acceptable outputs’

When it comes to people motivation he states that `to optimise the organisation as a whole, intrinsic motivation works better than rewards and punishment’

Finally he states that in order to get `better results you must have better methods’ and he goes on to explain what those methods are.

This is a fine book, with excellent practical ideas as long as you see people as an asset capable of improving their own workplace and not as a cost to be `managed’.

There are a number of people passing off Joiners work as their own without reference to Joiner, and they do it in a much more truculent way.  So please go to the original source which is Joiner. Its much, much better.

‘Dr. Joiner has made a significant contribution to the advancement of Deming theory with Fourth Generation Management. Elegant theory is shown in practice, providing examples that will stay on your mind as points of reference for years to come.’ Customer review on Amazon.

Consultants mis-selling ‘Lean’ business model, says expert

Press release: Consultants mis-selling ‘Lean’ business model, says expert

International expert on Lean Service Principles, Stephen Parry, has hit out at what he sees as mis-selling of the Lean business model to an unsuspecting business community.

At a joint seminar run for post-graduate business students by the Imperial College Business School and the Chartered Management Institute, Stephen called for an end to Lean misrepresentation and took the opportunity to present the Lean message to his audience in its true form.

Stephen, who is CEO of business transformation company See Business Differently and visiting fellow at the Lean Enterprise Academy UK, said, “My intention was to challenge the perception of Lean in the marketplace and educate our future business leaders in the true application of Lean.

“There are consultants selling Lean as simply a method of improving processes or achieving returns with the lowest possible resources, but this has never been the case.  Lean is nothing less than complete business transformation; like choosing a lifestyle choice for good health, rather than having a spot of liposuction.”

Lean was first presented 80 years ago as a model which changes the way businesses are designed and built in order to create real value for the customer while minimising costs and maximising profits.  But Stephen believes the idea was way ahead of its time and is the perfect model for 21st century businesses striving to respond to globalisation and the demand for individualisation.

“Consumers want a service which responds to their actual, rather than perceived needs.  Employees want to be able to respond appropriately to these needs by being a part of the day to day problem solving and decision making process,” said Stephen.   “Lean is the 21st century alternative to the old, machine-like model of standardisation that unfortunately most of us are used to.”

Stephen says he has heard from many companies who have implemented what they believed to be a Lean business model, only to discover they have either just “brushed the surface” or implemented something entirely different.  As a result, they have not accomplished what they set out to achieve.  He therefore grabbed at the opportunity to speak to business school students.

“Educating this generation ensures the real Lean message survives,” said Stephen.

ENDS

 

Notes to Editors

 

For further information, please contact: Michelle Drapeau, PR Executive, on +44 (0) 1525 237599 OR Stephen Parry direct on +44 (0) 7838 114997

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Facts about Stephen Parry

  • He is author of the book, “Sense and Respond: the journey to customer purpose”, which presents an approach to business based on Lean Service Principles.
  • Stephen Parry is a leading expert in the fields of Lean organisational design and transformation and Lean leadership.
  • Clients include SAP, BT, Local Government, police authorities, financial services, IT Services, Shared Services, Outsourcing, Consultancies, TNT.
  • Stephen speaks regularly at international events and respected business schools such as Cranfield School of Management, the Fisher Business School at Ohio State University.  He is a Faculty Member of the USA Lean Enterprise Institute, visiting Fellow at the Professor Dan Jones Lean Enterprise Academy in the UK and a regular judge at the national business awards.
  • He has been interviewed on BBC Radio 4 and featured in documentaries on BBC1 and Channel 4.

A Lean Leaders Christmas reflections

A Lean Leaders Christmas reflections: Andreas Heinz: Sense and Respond Diary, December 23, 2010

Christmas has arrived.

For those who have grown up with western Christmas tradition this is a magical time. We remember how we stood as children in front of the Christmas tree with big eyes and curiosity for the parcels, silently listening to stories and songs while the snow fell just as silently outside.

After all the seasonal rush before Christmas, it has finally arrived and now a certain silence and reflection on the last year comes into the homes of many families. We step back and get distance. Relax and redirect our attention towards our beloved ones.

Different thoughts and a wider vision of life may come into our minds. A healing break of contemplation, walks in the snow and joyful family dinners. Mind and body get a rest, our professional ambition paused momentarily until the new year.

We might suddenly see our busy job life from another view point: Not from the productive, planning, executing side or simply getting through all the busy-busy-bang-bang work, but from our sense of achievement  – what we now enjoy as a result of all that effort, and taking pride in knowing we tried our best.

Some of the busy-busy-bang-bang activities may also appear in a different, clearer light. For the moment we are not driven by it, in our reflections we see that much of it was pointless.

Daily we get pulled into the busy-busy-bang-bang noise, feeling a necessity to react quickly, reacting with no time to think, no time to reflect and choose what really makes sense.  Noisy activity for the sake of activity creating the impression of motion without real progress. How do we stop the noise and listen for the right signals?

We have too few occasions when we allow ourselves to get distance or perspective on our daily tasks. Time for reflection is important, it provides a much needed course correction back to our purpose.

What can I say about the months of November and December which was driven by a lot of work and overtime? Effectiveness started to suffer as soon as the noisy workload took me off course, I lost my sense of direction and purpose because I had chosen to forsake reflection.

I did things where I said only after three days of activity: Oh, this could have been much simpler, a more effective way would have created more benefit.  If I only had more time to think about a better approach… And even worse: While doing the work I felt, that something was wrong, that there might be a better, more elegant way with more benefits. I chose to ignore these thoughts, I was so busy getting it done, reacting to the busy-busy-bang-bang noise having lost the sound of purpose in all the clamor.

But it could be quite simple and does not need big seasonal events like Christmas for time out to reflect and think.

Implementing lean

The really interesting question at the end is this, Is there a relationship between the level and quality of impact of this busy piece of work and how busy I am with all what I have to do? The less we manage to get moments in time to reflect and get distance, to learn and to experiment, the less we will progress in our effectiveness. And the less insights we receive about what the right things are.

The real job of reflection is not trying to find how fast we can do what we already do but how do we do things differently and better to create new value and possibilities?

I hope I can take a lot of this Christmas silence, reflection and distance into the new year. There are so many opportunities that are not seen, not thought about, not explored because we get too busy, too deep, too quick to action. We miss the signals and opportunities for great leaps by doing noisy, ultimately unproductive quick fixes.

I will remember to choose to go for the paper, coffee and pencil approach more often. I will consider how I can make it a standard for the planning and review of new work-tasks: A piece of paper, a coffee, a pencil and the good feeling that this will pay back not only in time, but also in quality and impact.

Merry Christmas and a happy new year full of distance, reflection and purpose.

Working to forecast vs. working on demand

Extract from Sense and Respond: The Journey to Customer Purpose (MacMillan 2005) Stephen Parry.

Customer Value Principles Continued:

Comparing the activities and behaviours you would find in a mass-production environment with those found in a Customer Value Enterprise® (Lean Enterprise)

Working to forecast

Working to Forecast

Working to forecast vs. working on demand
In the mass-production environment in order to keep unit costs down, the primary concern is to maximise all assets and capabilities, to keep them working at maximum output. It is assumed that none of these assets or capabilities should be idle: keeping them working all the time thus becomes the driver – ‘this is the main consideration that determines management actions’ (Womack and Jones, 1996).

Maximising production does seem to make logical sense – but only if there is demand for the product: if not, the business needs to reduce production. In the Customer Value Enterprise® world, however, the business aims to produce only in response to known demand – it doesn’t build up inventories. You don’t make things ‘just in case’, because if you did you might waste resources, and you would certainly increase the cost of storage. Much better to introduce ‘Just-in-time’ but this this a completely different production approach with different measures of success with a different management focus.

Mass-production enterprises in the West are often driven by the production forecast: output is generated in the expectation that all products will be consumed. Many production companies are now moving to ‘build to order’ using Just-in-time production methods that is, creating an ‘on-demand’ business.

The principles of operation between these two approaches are very different. In the ‘on-demand’ world it is logical to keep some assets idle and to accept idle costs in exchange for the reductions in inventory, in storage costs, and in losses from discounting over-produced products.

In the ‘on-demand’ world, even the idle-time cost can also be recovered if the organisation uses this time to improve and optimise the value chain and thus to reduce the cost of production still further and to increase quality or introduce variety by going for economies of scope instead of economies of scale.

Lean business consultants in Europe

One word or caution: the term ‘on-demand’ is used by many today to mean simply the transfer of transactions and ordering to the internet. While in many cases this is an effective means of providing customers with access to products, it does not necessarily mean that the end-to-end organisation has been set up to respond ‘on-demand’. Throughout this book we will not use ‘on-demand’ to refer to an electronic shop window: rather we will use the term to signify a complete change in how the organisation is designed built and operated end-to-end.

The last ‘On-demand’ principle is very closly linked to our next Mass-Production vs. Customer Value Principle:

Prioritising and expediting vs. on-demand capability
In the mass-production world, limited capability means that the business must choose to prioritise or expedite some  things, and other things therefore have to wait. But waiting causes waste. In mass production, managers think that they
must prioritise and expedite because they don’t have enough resources: yet the systematic prioritisation of work actually creates more work.

When instead you create continuous flow and work on demand, you remove this need to prioritise and expedite.

More Customer Value Principles to follow soon.

©Stephen Parry 2010 All rights reserved.

People performance vs. system performance

Extract from Sense and Respond: The Journey to Customer Purpose (MacMillan 2005) Stephen Parry.

People are the problem according to Mass-Production

People performance vs. system performance
When things go wrong in an organisation, managers in the mass-production arena usually start to criticise their staff: ‘You didn’t make your quotas’ or ‘You didn’t make your output numbers’. Yet performance problems can have other causes, such as when demand exceeds the end-to-end capability of your value stream; when an unknown and inappropriate demand enters the system; or when someone along the value chain improves performance locally and inadvertently creates a knock-on effect downstream.

Factors such as these account for over 90 per cent of the variation in service performance (Edwards Deming, 1982).

Most of this variation is outside the power of the individual – individual performance can only contribute as much as the constraints of the current system will allow. Performance is created by the system, not by individuals, so if there are to be breakthrough improvements then systemic changes are needed.

In the Customer Value Enterprise® model (Lean Enterprise), changing the system is the responsibility of those who work in that system.

As has been said above, the mass-production paradigm contrasts significantly with the Customer Value Enterprise® paradigm, and there is no continuum from one to the other.

Most organisations currently work using mass production-thinking so how can one flip from one paradigm to the other?

To make this shift takes strong leadership which allows staff to work in both ways for a short period while transitioning from one to the other.

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Lean teaches us that the system is the problem, but what needs to change?

Three major components are necessary.

First, you need to collect data about how your organisation responds to the real needs – as opposed to the perceived needs – of your customers.

Second, you need to assess how your organisation performs end-to-end in achieving the customer purpose. Once staff have collected the data, they can discuss it with their manager and talk more easily about change.

Third, as well as gathering data, staff also need to understand what the reality is like. As they grasp this reality, they become better able to collect the data. This process thus becomes an iterative one with these three elements.

The type of change we are advocating depends on learning the principles of all three and bringing all three together. Because they are so interdependent, change will occur only when all three are addressed at the same time.

More Customer Value Principles to come.

©Stephen Parry 2010 All rights reserved.

Be attached to Purpose not the means

Its natural, when there is no clear way forward, when expectations are thwarted we automatically think there is something wrong and we could have done better.

That is why purpose is so important, what we get attached to are the means by which we achieve our purpose and think the purpose is under threat, which is not the case at all, it just means another possibility is required and it will probably be a better way, why? Because we think first of the easier ways which are simply re-cycled solutions from your past, when you find they don’t work we often feel angry or lost or blame ourselves for not being good enough.  Now is the opportunity to be far more creative…..and find new possibilities.

Implementing lean

That’s why in Lean, we have more than one countermeasure when we are looking for solutions, we force ourselves to look for solutions beyond the obvious. We must not be attached to any countermeasure, if one does not work you already have a plan b, but remember the purpose remains constant even if your means of achieving it have to change.

Goldmine vs Goldratt

The Gold Mine By Michael Ballé

Reviewed by Stephen Parry

I guess the parallel with the book ‘The Goal’ by Goldratt, is no accident and as such is being asked to be compared. It is very similar in format, a novel style portrayal of a company trying to get back to profitability. In the case of ‘The Goal’ they use a framework based on a ‘Theory of Constraints’ and the ‘Goldmine’ illustrates Lean Manufacturing Principles.

But first let me outline my view on the GOAL by Eliyahu M. Goldratt and Jeff Cox.

I like the format, characters are interesting in the novel style portrayal of a company getting to grips with productivity problems and the impact on personal lives, these sections are very real.

The theory of constraints, is too grand a title for what can only be described as the business equivalent of the Snake under the Persian carpet story. A man finds a lump in his carpet, hits it hard and it disappears only to find it reappearing somewhere else a few days later. This continues for several weeks until someone lifts the carpet to find a very disgruntled snake. Identifying and removing single constraints in the production process and then waiting for the next to appear is just absurd. However the process is seductive because it gets results, the lump disappears after all and if it re-appears in another guise somewhere else, well that’s perceived as a new problem, requiring a new solution, perhaps a heavier hammer to hit the snake with is in order?. I suggest Mr. Goldratt and Mr. Cox lift the carpet and take a look at what is really going on.

All that said, its well written and an excellent read, I could not put it down.

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Comparison between the books:

In terms of the story line, the goldmine book is a little weak because I never really get to know the characters or feel any concern or empathy for them. In these terms the ‘Goal’ wins hands down.

In terms of a practical and effective theory of management i.e. Lean Production then the Gold mine is far superior. We even get to see some practical examples worked out within the work environment context, its a sort of case study/documentary.

In conclusion, if you want a good story and poor theory then the Goal is a better choice. But remember, you can always buy a good novel instead.

If like me you want something that works in practice then the Goldmine is a clear winner.

The Second Century: Book Review By Stephen Parry

 

You need to not only think outside the box but work outside the box,

The Second Century: Reconnecting Customer and Value Chain Through Build-to-Order

Implementing lean

Matthias Holweg and Fritz K Pil

Book review By Stephen Parry

This is a timely reminder for those companies who consider themselves to be Lean to take another long hard look at themselves.

The authors demonstrate that within the four walls of the production plant many manufacturers have put into practice Lean principles, but they go on to demonstrate that all the company has succeeded in doing is optimise a small part of the real value chain. The Authors criticise short-sighted approaches to Lean which provide little or no benefit for the customer and loses the opportunity for companies to differentiate their business.

The next competitive advantage will be gained by those companies who are brave and confident enough to really start connecting their value chains to the customer (end-user) and their suppliers.

Often companies say things like, ‘we have enough to worry about getting our own part of the business sorted out without worrying about what our suppliers or distributors are doing’ this thinking illustrates the problem the authors are discussing and provide direction for companies who simply cannot think outside the box let alone work outside their box.

This is well written, researched and provides a clear direction for lean Manufacturers, lets hope it does not take another century for them to learn.

Human-Side-Enterprise-Annotated Version: Douglas McGregor review by Stephen Parry

Human-Side-Enterprise-Annotated Version By Douglas McGregor

‘The greatest waste in organisations today is the waste in human potential’

This book has been wonderfully brought back into the sunshine and placed in the modern setting by Joel Cutcher-Gershenfeld, Senior Research Scientist in MIT’s Sloan School of Management.

Book Review by Stephen Parry.

Let me start by stating for transparency that my own book Sense and Respond: The Journey to Customer Purpose has been cited in this updated classic book as providing modern evidence of the Theory Y organisation in action.  Now onto the review.

The Human side of enterprise is a forgotten landmark in the history of management-research and thinking, which is very surprising considering it clearly provides an explanation for the pitiful state we find within many organisations today. Maybe it’s been ignored because it shines a clear light on the fallacious assumptions many organisational designers and developers have about human beings? Maybe it has been ignored because people in influential positions feel threatened by the perceived loss of power and control any change of assumption might bring?

Whatever the reason we are left feeling that the greatest waste in organisations today is the waste in human potential, and this, McGregor points out, is a result of the wrong-headed and unscientific assumptions management have about encouraging the best from people.

McGregor’s system and research demonstrates clearly that systems designed to control people certainly provide control but we must ask, what type of control and at what cost? – the cost to productivity, innovation, enterprise, society and human fulfilment?

Lean business consultants in Europe

It is no mistake the book is called `The Human side of enterprise’ and not – The Human side of THE enterprise. We are talking here about the enterprise of humans as a natural instinct, not the organisational enterprise which is an unnatural construct.

Traditional management systems are an invention to maintain control over power and resources in an effort to maintain compliance. This creates organisations where everything is forbidden unless permitted and limits the enterprise and potential of human beings.

Traditional organisations trying maintain control narrows focus and closes down possibilities hence the need for extrinsic rewards and punishments to make people do what they would not otherwise do. However, enabling the human side of enterprise opens possibilities by designing organisations around assumptions that people will respond to purpose, autonomy and intrinsic rewards because the ends and means are rewards in themselves.

Creating an enterprise where everything is permitted unless forbidden encourages human enterprise and creates healthier societies.

Run experiments not pilots.

In Lean we start by not knowing the solution, in Mass you only start once you ‘know’ a solution. That’s why we run experiments not pilots.

Why do we need to stop running pilots and start running experiments instead?

Well, the message you give as a Lean practitioner to employees and to managers is that pilots are almost finished products, then they get very upset when they find that you don’t have all the answers and a detailed plan on how to implement them. They even accuse you of being incompetent or wasting their time.    ‘this is all too wishy-washy. Just tell me what I need to do, you can be so frustrating’. They often say.

This is usually the first reaction from people who are being asked to think for themselves maybe for the first time.

We ask about how they do their work, it’s design and to think about the end to end business process and customer outcomes,  this is all very strange for them.

These questions are not appropriate  in the mass world except maybe at the senior management level but they cannot answer these questions- the mass design has separated them from the workplace and the data.

Lean highlights the illusion of control provided by Mass and outlines a better approach to gain and maintain control by assigning responsibility and accountability at the employee level.

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So how do we start conditioning managers and employees to a shift in responsibility – by running experiments together to learn together to find better ways to meet our customers purpose together.  There is no us and them.

Data and facts from the customers perspective puts everyone at the same level on the org chart.

The purpose of experimentation is to test management and employee assumptions and to find answers and solutions to the many questions they have.

One other important feature of running experiments is that we are openly saying ‘none of us know for sure the answers but we want to surface and solve our problems together’