Friday, April 23, 2010

Two Extremes

There are two extreme types of organization.  Most lie somewhere between the extremes.  At one end we have the World Class organization.  At the opposite end we have the Fire-fighting organization.
The obvious difference between the extremes is how smoothly they appear to run.  The World Class organization has few crises.  Things seem to run smoothly.  Problems arise, but they are quickly contained and soon prevented from happening again. 
The Fire-fighting organization is continuously fighting fires, rushing from one crisis to the next.  The same problems recur. Prevention is poor.  The World Class organization has a calm, laid-back feel to it.  The Fire-fighting organization has a frantic feel.
There are some less obvious characteristics that distinguish the two extremes.   In Fire- fighting organizations there is a lot of blaming.  Any problem will lead to fixing blame, or to wanting to fix blame.  In the World Class organization rather than asking who is to blame, we want to know what happened.  Sometimes the blaming or the desire to fix blame is personal.  It will also be focused on functions.  Production blames maintenance for not maintaining or fixing equipment.  Maintenance blames production for misusing the equipment and breaking it.  Production blames the quality organization for interfering with their ability to meet production goals.  Quality blames production for making “garbage.”  There is always someone else who bears the brunt of the responsibility. 
This is related to another contrast.  In the Fire-fighting organization everyone tends to be narrowly focused on the particular job or function to which they are assigned.  “That’s not my job,” is a frequent statement. “That’s not your job,” is said to the person who shows an interest in what happens in another function. This separation lends itself to passing the buck to another function when there is a problem.
In a World Class organization everyone is expected to be interested in and aware of aspects of the organization that are outside of one’s expertise.  A lot of work gets done through cross-function cooperation and effort.  There is a greater understanding of the overall system, of how things go together and affect each other.  Problems tend to be viewed as systemic. We ask how equipment, information, methods, materials, and people each contribute to the problem and to its solution.
The Fire-fighting organization will focus on results and react to them. Quality problems lead to implementing new tests or inspection procedures to filter out the defects.  The World Class organization is very aware that all results, good and bad, are the product of processes.  If we are getting good results, we should understand what in the process is getting us those good results and capture it.  We implement standard procedures to insure that we consistently get the same results.  If we are getting results that are not desirable, we ask what needs to change in the process to improve the results.  If we have standard procedures, what needs to be modified?  If we do not have standard procedures, what needs to be standardized?
In Fire-fighting organizations everyone spends a lot of time hanging on and doing the best they can. The top levels of the organization hunt for solutions to on-going problems, often exploring alternatives that require significant capital or expense: New computer systems, new equipment and fixtures, hiring new people.  In the World Class organization, there is still a need for applying capital, but along with that everyone is also focused on continuous improvement on things that cost very little or nothing at all. There is a culture of finding opportunities to improve and acting upon them immediately.
The dichotomy of two extremes is somewhat artificial. Very few organizations lie at either extreme, but many are closer to, or moving toward, one extreme or the other. It is not important for an organization to fix it’s precise location between the extremes, but it can be useful to have an idea of where your organization is located, thus what to improve and build upon and what to try to avoid, if you are trying to move in the World Class direction.
Avoid fixing blame and keeping people isolated from all but a small corner of the organization. Avoid over-specialization.  Create cross-functional work. Keep people informed about the overall system, what is being planned, new marketing, new business, and how we are doing. Encourage teamwork for working on low-cost/no-cost improvements.  Support this kind of teamwork by providing time and resources to do it. When we start to react to results, remind everyone to consider what in the process led to results, not only when there is a problem, but also when things are going well.
In summary, the three dimensions to examine are:
Non-blaming versus finding blame.
Focus on the overall system versus focus on narrow functions.
Focus on process and results versus focus on results only.

Notes:  I was introduced to this model in my work with the KAIZEN Institute of America (now a part of KAIZEN Institute International), starting in the 1980s. I had occasion to teach it in many Institute workshops over the years and to observe its validity in organization after organization.

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