How Dynamic is Your Management System?

Insights
April 23, 2017

For a long time Don and I weren’t exactly sure how to label what we do.  We knew there were big opportunities out there and we started to develop a pretty good track record helping our clients and partners, but we were never quite sure what to call it.

The label Work Design has a long history in the scholarly literature, but its main framework is almost entirely static; if you followed what the textbooks told you, you would design the work and then just walk away.  My earlier work on failed organizational change efforts suggested that such an approach could easily create a breeding ground for trouble.  Humans were not designed to do exactly the same job over and over again and would almost certainly find ways to keep themselves entertained.  The idle mind may or may not be the devil’s playground, but executing a particular task the same way day in and day out is going to lead to trouble.

We created the label Dynamic Work Design to capture the idea that once we recognize that humans draw satisfaction from learning and development, we can design work that is both more engaging and more effective.  Thanks to the hard work of our clients, partners and students, we have a rapidly growing library of success stories, places where the Dynamic Work Design tools and principles have helped generate significant gains in performance (you can find a few examples here).  That said, we’ve recently realized that when we are successful, we do more than redesign work, we also help you redesign your management system.

Depending on the industry you are in, you may talk about your management system every day or you may never have even heard the term.  If you come from an industry with a lot of risk (nuclear power, aviation, oil and gas), then you probably take your management system pretty seriously, if for no other reason than, if something goes wrong, you are going to be asked about it. Similarly, if you have ever tried to get ISO certification (9000 or other variants) you’ve tried to develop a system for managing quality. In contrast, if you develop software, provide consumer services or consult, you may have never even thought about a management system.  Nonetheless, whether it’s written down in excruciating detail or entirely unconscious, your organization has a system through which it is managed and led.  And, that system is almost totally static.

As mentioned above, the academic literature often doesn’t recognize the dynamic nature of real organizational life and the problem only becomes worse when you move to the realm of management systems.  In our experience, most management systems are slow, cumbersome, tedious and ineffective.  Worse, many people in line jobs spend a lot of time working around the system rather than using it.  In one organization that we studied, the annual budgeting and planning process started in September and often continued through to the following March.  And, when the final plans for the year were agreed upon (two to three months after the year had begun), most of the business units were already behind.  Even in the slowest of industries, completing one to four learning cycles per year (and expending significant resources in the process) will leave you far behind your more nimble competitors.

For several years we have been using tools like Visual Management to help leaders wire together their different work processes to create more effective, more agile organizations.  A recent article in the alumni magazine,  'MIT SLOAN,' gives an update on the ongoing work at the Broad Institute (MIT SLOAN link). Until now, we treated such “wiring” projects as part of Dynamic Work Design.  But, as we watch more of our clients and students make the transition from fixing specific pieces of work to embedding the approach throughout, we are finding it helpful to separate the process of redesigning work from the process of connecting those processes into an engine for creating learning, value, and competitive advantage.  We are going to use the phrase Dynamic Management System to describe the ways in which all of your key processes are linked together to deliver your organization’s strategy.

How to create an effective Dynamic Management System will the subject of lots of posts and papers in the future.  Sheila Dodge and her team at Broad have probably done the most work in this area in the last few years and you can read about those efforts in the article just referenced and a current working paper here.  In the meantime, here are a few questions to ponder as you being to answer the question “How dynamic is my management system?”


  1. How many learning cycles do you achieve per year?


Chances are the answer to this question is either one or four.  A learning cycle means that you state a hypothesis--usually in the form of some kind of annual targets and supporting plan—run an experiment—execute that plan—and then compare the results to what you hypothesized.  Most organizations only do this on an annual basis.  In contrast, Toyota can do it quarterly even when doing something as complicated as developing an entirely new vehicle.  Good software companies are getting their cycles down to a matter of days.  The more cycles you can get through, the more you will learn and a good Dynamic Management System should make this happen on a regular basis.

  1. How many learning cycles do you complete every year?


Here the answer is almost certainly zero.  Some companies get off to a good start by setting targets and making activity plans (hypotheses and proposed experiments).  And, when things don’t go as planned, they start making revisions and adjustments.  But, completing a learning cycle means that you return to the original plan and ask the questions “what did we get wrong?” or “what didn’t we know?”  This rarely happens. Instead, a huge amount of energy is often invested in compensating for a bad planning process and explaining why the missed targets were due to things outside of everyone’s control (one company we know institutionalized this process into a special power point slide that became the standard for justifying missed targets).  As an example, when Don was at Harley-Davidson they would routinely miss their targets for product delivery because they had too many projects going on given the available resources.  This went on for decades before somebody finally asked the question, “How much do we actually get done every year?”  Once they did this, they were able to rationalize their product plans and eventually made substantial improvements in R&D productivity. (You can read more about this in our colleague Dantar Oosterwal’s book The Lean Machine).

  1. How quickly can you see trouble?


The essence of both a Dynamic Work Design and a Dynamic Management System is that activity is structured so that leaders can allocate their scarce time and attention where it really matters.  In your organization when do you know if something has changed that might require your attention?  In our experience, the more senior you are, the longer it takes.  It is, sadly, not unusual for lower level folks to hide bad news in the hope that they can “catch up” later, though this rarely works out.  A good, dynamic management system, surfaces problem quickly so that leaders can act on them immediately.

Take a few minutes and “audit” the dynamism of current management system: 1) how many opportunities do you have to learn; 2) how often do you actually capitalize on them; and 3) how quickly does bad news get surfaced?  If you aren’t happy with the answers, stay tuned.  There’s lots more to come.

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