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deming, fads, leadership, lean

Beware the Next Management Fad

It does not happen all at once.  There is no instant pudding.” W. Edwards Deming

I recently read an article in the February issue of Fortune magazine entitled, The Algorithmic CEO that starts out with, “Get ready for the most sweeping business change since the Industrial Revolution.” The article goes on to tout mathematical algorithms as the most important instrument of change in business today, and credits the success of companies like Google, Amazon, and Apple to mathematics.

I am not arguing with the importance of math to the success of business, but as I read the article, I couldn’t stop thinking “here we go again.”  Another fad representing itself as the one piece of the puzzle that will lead us to the promise land.

We are constantly looking for the quick answer to success and can’t – or don’t – want to understand that it is the result of learning, improving, and pretty much doing a lot of things well.  There is no quick answer to make it happen – it requires hard work and requires a lot of focus, humility, a method to continually improve, and a whole lot of patience.

Management Fads

The article made me remember all the management fads I’ve run into during my career, and how they did little more than distract organizations and make a lot of money for consultants and authors.  It also reminded me of the words of W. Edwards Deming and how we will jump on anything that promises a quick fix to business problems.

As I thought about the numerous management fads through the ages, a few stood out as particularly annoying.

  • Six Sigma (yes, six sigma): I had to put this one first because it’s the most recent distraction from working on true improvement.  In a 2013 article in Inc. magazine, Geoffrey James wrote that six sigma results in, “a hierarchy of ‘belted’ experts who run around the company pretending that they know how to do other people’s work better than the people who actually do the work. Endless meetings ensue, with little or no effect,” and I can’t agree more.  A 2007 Bloomberg article on the problems Home Depot was experiencing at the time wrote that store workers complained that the constant data measurement “sapped time given to customers.”  Those who have read my posts in the past already know my thoughts on six sigma, so I’ll stop here.
  • Business Process Reengineering (BPR): BPR consists of a “blank sheet” approach to designing an organizations critical processes. At the time, it was touted as a way to achieve dramatic improvements in quality and productivity.  Besides the obvious problems of starting from scratch rather than understanding the existing process – including the current problems it’s experiencing – and changing it one element at-a-time to enable it to continue to operate and assure it’s actually improving, BPR somehow turned into a vehicle for layoffs.  I remember people telling me at the time that they were “engineered out of a job.”
  • Management by Objectives (MBO): I don’t have a problem with the philosophy of MBO as Peter Drucker created it.  Determining the organization’s high-level objectives and aligning the objectives of teams and individuals to achieve them sounds logical, and a whole lot like policy deployment.  Once the business world got ahold of it, however, it morphed into something destructive.  Objectives were often disconnected –almost random – and resulted in destroying teamwork by putting people to work on meeting personal objectives whether or not they actually helped the organization as a whole.  Drucker wrote that MBO requires a lot of effort to clarify and align objectives, but many who used it decided to shortcut the process, making it highly ineffective.
  • MRP, MRP II, ERP, etc.: I remember reading a report from the 1980s by a team of American manufacturing experts who traveled to Japan to study Japanese production techniques. The report touted the work of quality circles and focus on continually improving processes throughout the plants.  One of the conclusions of the study, however, was related to that Japanese automakers would be even more successful if they replaced their kanban systems with MRP.  Companies were certified for applying MRP (offered, by the way, by a company that provided MRP consulting services), and built staffs to manage the system as inventories grew, costs rose, and on-time delivery of products fell.

I know that the author of the Fortune article is just trying to get the attention of business leaders by comparing math algorithms to the Industrial Revolution, but it’s frustrating to think we could be facing another distraction to instituting strong leadership in organizations.  To credit the success of companies like Apple and Amazon to their use of math is a stretch.  These companies have strong and focused leadership that is on providing products and services that continually make life easier for their customers and team members.  Although they use math as a tool to help the business, it is but one part of the equation that won’t work without engaged leaders who understand and improve their ability to manage the overall system.

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About Gregg Stocker

Gregg Stocker is a lean advisor for Hess Corporation. He possesses over 20 years experience in a variety of disciplines including operations, manufacturing, human resources, quality, and strategic planning, and has worked in manufacturing, service, and oil & gas industries. He has extensive international experience, including successfully leading an $65 million business in The Netherlands. He authored the book, “Avoiding the Corporate Death Spiral: Recognizing & Eliminating the Signs of Decline,” (Quality Press, 2006) and was a contributing author to "The Lean Handbook," (Quality Press, 2012). Gregg is a frequent speaker and recognized expert in business and performance improvement having been interviewed on television, radio, and in a number of newspaper and magazine articles including The New York Times, Washington Post, BusinessWeek, and InformationWeek. Gregg has implemented change in organizations ranging in size from $10 million to more than $100 billion. He is a team-oriented leader who achieves results by improving teamwork, focus, and communication throughout the organization.

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