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Defending the case for separate management and improvement structures

improvement structures

Executive Summary
The amount of rigor, discipline and systems being put into place to manage a business is often much greater than that for improving the business. Yet in instances where the latter is adequately addressed, long-term business success and subsequent shareholder value increase. So why do many improvement projects within a company not sustain their success? Is it not the task of management to drive and maintain the results? Carl Loubser takes a look at these and other questions and offers some prudent answers.

 

In a recent conversation with a transportation manager who looks after the maintenance of a fleet of over 1 000 buses he remarked, “I have some really good status quo managers, but no one that really improves what we do.” He went on to explain that of his team of managers, almost all had good skills at keeping the buses running, keeping the business on track, keeping costs down and managing their personnel, but that none were capable of challenging and changing the status quo (the way things were always done).

This led me to thinking about the rigor, discipline and systems that are usually put in place to manage the business, and how little rigor, discipline and structures are put in place to improve the business. For managing the business, there is usually a structured cadence of meetings at different tiers of the business, relying on sophisticated and integrated data from the Enterprise Resource Planning (ERP) systems that are tracking performance to targets and managing budgets. But this process is not meant to fundamentally improve the business, and seldom does.

Often the requirement to improve the business is an outcome of a strategy session, setting targets to improve selected key performance indicators (while not allowing for any of the other performance indicators to slip). Such improvements are usually targeted by defining “Projects” to analyze existing performance shortfalls, after which an improvement action plan is developed. With strong project management disciplines, good project teams and a concerted management effort, these projects do deliver results, yet these results are often not sustained when the project teams disband. Those few key project team members that “deliver the goods” are needed on the next project, and have to move on. But why does this drop in results so often happen, in spite of these projects being signed off as successful? Is it not the task of management to maintain the results?

It also raises a few other concerns, such as whether a fundamental difference in approach is needed to manage and improve the business, and how to determine the objective and priority of the management team. (See Figure 1)

The objective of management teams

Much has been written about the difference between management and leadership, as illustrated by Warren Bennis in his book, On Becoming a Leader. In it, Bennis distinguishes between managers and leaders in the following way:

  • The manager administers; the leader innovates
  • The manager maintains; the leader develops
  • The manager focuses on systems and structure; the leader focuses on people
  • The manager relies on control; the leader inspires trust
  • The manager asks how and when; the leader asks what and why
  • The manager imitates; the leader originates
  • The manager accepts the status quo; the leader challenges it
  • The manager does things right; the leader does the right thing
  • The manager is the classic good soldier; the leader is his or her own person

Although leadership and management are two distinctive systems of action, they are both necessary for success in an increasingly complex business environment.

So is the lack of sustained and step improvement merely due to ineffectual leadership? From my experience, businesses that perform well in sustaining business improvement and innovation (e.g. SABMiller, DuPont, Procter & Gamble), have developed a rigorous approach and improvement system to enable the left side of the diagram in Figure 1. Systems are embedded in the organization to create:

  • a rigor in identifying, applying and persevering with best practice
  • empowerment and skills at all levels, so that the same person can be both manager and leader

To address this, and the lack of sustainability of many improvement projects, there are a few key principles that need to be put in place:

  1. Involve everyone in improvement.
  2. Empower teams to address issues and eliminate the root cause of problems.
  3. Identify excellence, interrogate it, and implement it in a standardized way.
  4. Create a separate “shadow” structure ­— the original one to manage the business and another to improve the business. In mature organizations, these two structures become merged, but merging too early results in the “improve agenda” being swamped by the “manage agenda”, which is why the improvement efforts and focus fade away.
  5. Drive improvement in a structured, maturity-based manner to both systematize improvement and expand best practices upon sound foundations.
  6. Build check systems as a part of all work – from operator standard work through to leader standard work. The act of “managing by checking” is the most crucial component of any attempt at sustainability.

All these points have clear logic, but it is especially with points 4 and 5 that businesses often battle to see the logic, as this is counter-intuitive.

Unless the existing management structure is duplicated to create the mental “headspace” and dedication where they can separate themselves from the daily grind, they will be pulled back to business-as-usual. A different approach is needed (see Figure 2) with a separate cadence of meetings, and separate indicators focusing on business practices and improvement processes, not performance outcomes.

This must be supported by a system to evaluate, guide, capture, and then share best practice. This sharing of best practice must be done in a maturity-based way ­— replicate the process, not the outcome. Fit the improvement and the expectation to the maturity level of the business.

improvement structures

 

Quite often “great” is the enemy of ”good” where a quest for perfection limits the engagement of the workforce, or where the required step-up is so large that it is not possible.

Peter Drucker was one of the first to use the term “knowledge worker” in reference to modern business. This phrase really comes into its own when it comes to improvement and innovation — they are part of everyone’s job. Some of this work happens at a strategic level, more still at a systemic level, and most at the situational level — yet everyone must be focused and engaged in doing better and applying their knowledge.

Drucker said that, “… one does not ‘manage’ people, the task is to lead people. And the goal is to make productive the specific strengths and knowledge of every individual.” It is only by developing a structure and system to drive and embed best practice that this will be possible. Remember, you did not learn to ride a bicycle by copying what someone else did — you had to learn it by doing it yourself.

 

Disclaimer
This resource has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained herein without obtaining specific professional advice. Competitive Capabilities International (CCi) does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this resource or for any decision based on it.

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