The purpose of the series of articles you are about the read is primarily to enable you to investigate and indeed apply new or different approaches to how we make our work, work better for staff and customers, and thus to return the essentials of our humanity into all our organisations.
A quick recap: In our new world we have discovered our purpose from the customers perspective to give our organisation and staff a new focus on what really matters – turning off and stopping anything that detracts from meeting this purpose.
In doing so we have uncovered that demand is varied but predictable, that care is needed on using the right measures to support success, that there is huge economic leverage in removing failure demand, that we can absorb variety in value demand and by using economies of flow we can reduce costs and improve service.
In order to understand flow we must first understand the current organisational theory, design and management in more detail. This can be best explained by exploring the relationship between our industrial past and our understanding of economics which has led to the theory of economies of scale, for which there are two main arguments:
- The organisation design argument: specialisation and standardisation will lead to lower costs and greater productivity.
- The savings argument: cost savings will be made through common IT systems, less buildings and fewer staff.
In discussing the concept of purpose we briefly explored how the wrong purpose can be reinforced by measures and targets that create further distance between meeting the true purpose for the customer. Even worse, measures and targets themselves can become the default purpose of an organisation, pulling it in different directions and hiding the continued degradation of service in the eyes of the customer. To put it simply, measures can make performance worse!
It is often said that ‘you get what you measure’ as any metric you care to hold someone accountable for will drive us humans to further our scores against it, especially when livelihood is at stake. Traditional thinking sees measures and targets as motivational tools to encourage competition and further performance. The fundamental problem is they so often encourage the wrong behaviour to achieve the wrong goal. For example, the reason CEOs of the worlds biggest companies care so much about share value is because that’s how we measure them, and it’s what we pay them on. But a focus of our CEOs on share value leads, both strategically and operationally, to disastrous consequences for customers, staff and ironically, the share price and said CEO!
Most of us believe we know the problems we have within ourselves, at home, with our football teams and of course at work. But all too often the problems we identify are not the root cause and the actions (if we take them at all) do not lead to sustainable improvement.
Most people, when they want to make a change, tend to start at the wrong place. They start to change things without actually knowing what’s wrong. It’s a bit like a doctor treating you without knowing the real problem – a painful and expensive business, as my knee will testify. Read more
I once came across a statement of purpose for an organisation and it read as follows: “We exist to professionally build long-term high-impact sources so that we may endeavour to synergistically leverage existing effective deliverables to stay competitive in tomorrow’s world.” So there you have the purpose! Everyone now clear on what they need to do, how to measure progress and how to do it? Not a chance!
True purpose can only be established by studying the WHAT and WHY of current performance. A statement of purpose must be expressed from the customer’s point of view and in their terms, i.e. from the outside-in not top-down. This outside-in perspective is one of the key features of a new way of thinking about organisations and management method.
The first in a series of blogs to investigate new or different approaches to how we make our work, work better for staff and customers. This week we start with the concept of purpose. In the midst of social and economic unrest across the globe, in combination with advancing technology creating instant collaboration and news on a global scale, the views of social groups & entire populations are being heard on an ever more forceful scale.
As a result of this backdrop the question of purpose, of banks in particular, has been challenging the Chairs of major companies, presumably not helped by Lloyd Blankfein suggesting Goldman Sachs was doing ‘God’s work’! Whilst the question of ‘What is our purpose?’ should be seemingly easy to ascertain for a Retail Bank, the question of how we focus on this purpose and the subsequent questions this raises holds a more complex series of challenges to traditional management practices.