Sunday, 27 June 2010

What is your cutting angle?

In many organisations there is a great deal of what I call ‘quick fix’ (QF) activity. You can recognise QF by the fire-fighting loop that many parts of an organisation get caught up in going round and round. People come to work and work hard – “bloomin’ hard!” And, every now and then, something goes wrong and there is a mistake. And as we all know, often from a very early age, “you can’t win ’em all!” To err is human, near enough is good enough. But the mistake has to be fixed, using up more time and resources. This only adds to the work load and probably increases the chances that more mistakes happen.

Stay fix (SF) on the other hand takes a subtly but radically different approach. When the mistake happens the ‘stay fixer’ will wonder “why?” In other words they will wonder what elements of the system (the whole system) made it likely that that particular mistake would occur... They are thinking about prevention. The mistake still has to dealt with of course but at this point, the stay fixer spins out and seeks to fix the system and put in place changes that reduce the chances that a similar mistake will happen in the future. At this point prevention is done (not just considered) and so work becomes easier and indeed people begin to work smarter not harder.

In any organisation, activity can be classified as QF, SF or Doing the Business (DTB) where the service / process happens as it should do with no mistakes occurring. Hence an audit of QF/SF/DTB can be conducted. When organisations have done this, they often find that vast amounts of money, time and stress are expended on a combination of QF and SF – sometimes up to 20% or even 40% of the overall budget.

But a choice then emerges. Do you want to carry on spending vast amounts of resource on this ‘cost of failure’ or do you want to invest in SF in order to bring down the costs of QF. Ultimately if you do this well, there can be massive savings in QF costs, even SF costs which in turn bring down the overall cost to the organisation. Not only is the organisation more efficient, it is more effective, economic and indeed elastic (since good SF builds in versatility to changing contexts too). And if SF is done ‘with’ the whole system, rather than ‘to’ it, more energy and commitment is released as well.

However there are a couple of big(ish) problems. The reductions in QF take time to come to fruition. Also investing in SF is a bit like stoking a steam train engine, it takes a while to gather speed. As a consequence, the overall cost to the organisation goes up before it can come down. This is always the case. QF savings do not magically appear without some effort. There is no easy solution to this but the only one which can work, in my experience, is prioritisation of the SF activity. For example avoid trying to reengineer all of your processes in one go – instead select a couple where some early gains are possible which then gives you some commitment and slack to move onto the next and the next and so on. This is why strategic planning is so very important as it helps an organisation select where to invest its SF activity.

There is another significant problem too. Thinking of the QF and SF loops, there is a small tunnel from thinking about prevention back into “you can’t win ‘em all”. People often go through this tunnel when they say things like “I am so busy right now, I don’t have time to think about the wider system, I will do the prevention task a couple of years from now, when I am not busy...”

Blocking off this tunnel requires leadership. This leadership must:
  • Role model SF practice (which is hard for the leaders who have been promoted on the strength of QF ability)
  • Provide structures, tools and techniques to educate, enable, empower, support and inspire people to work in a SF way (such that QF becomes the work equivalent of leaving home without brushing you teeth!)
Organisations are far more complex than this, but I have found over the years that people find this model helpful in making sense of why continuous improvement is difficult but also what can be done to design a way forward that is doable.

In these current times when resources are going to get ever tighter, the need for investing in SF to bring down the costs of QF has never been greater. However, one can imagine the costs of an organisation laid out as three blocks: DTB, SF and QF. The shrewd leaders and managers will identify where the QF costs are and tackle them one by one. The less shrewd leaders who are in a hurry to sacrifice the future for the price of today will cut horizontally as it were and slice through DTB and SF as well as portion of QF. This will damage the short and long term capability of the organisation as well give up the opportunities to be had from investing in SF. It will also cost more in the long term.

Perhaps one key measure of how shrewd & strategic a leader is, in this current context, will be the angle of the cut: somewhere between horizontal and vertical.

What is your angle?

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