Every system is perfectly designed to get the result that it does. W. Edwards Deming
A typical internal combustion engine vehicle (ICE) wastes up to 80% of fuel, with only around 20% of fuel being used to propel the vehicle forward. The rest is lost through heat produced by the engine, pumps, fans, friction, and electrical components. On the other hand, an electric vehicle (EV) wastes around 10-20% of battery power, utilising up to 90% of the battery to propel the vehicle forward. If you're triggered by that comparison, I'm highlighting it as an analogy for building better businesses, not as a plug for EV's, so cool your carburetors while I drive the analogy home.
Many companies operate like an ICE manufacturer, trying to optimise a system that was created over a century ago for an environment that bears little resemblance to the world we live in today. We waste resources through processes, policies, rules, and layers that no longer serve staff or customers, and end up building a bureaucracy that largely exists to serve itself. Though we have iterated over decades to create the most efficient version of the modern organisational structure, it's no longer fit to drive us into the future.
Waste, as defined by Lean manufacturing is anything that consumes resources but brings no value to the end customer, i.e. anything customers are not willing to pay for.
When we apply the definition of waste to the organisational structures and operating models we've created, how much of what we do provides value to customers? Do they care about how much time we spend budgeting and re-budgeting? Do they care about our steering committees, governance groups, and status reports? Do they care about our internal policies and processes? No, customers care about the quality of products and services we provide and their experience with the staff they interact with.
Rather than descaling and simplifying our structures, we try to fix our growing inefficiencies through large-scale transformations, adding new layers and rules that few understand and often slow the system down even more, increasing the cost of operation. We re-paint the exterior, install a body kit, and put on some fresh mags to make our businesses look modern on the outside when we should be stripping and rebuilding the engine. As a result, we fail to address the underlying organisantional structures that are no longer fit for purpose, piling on even more waste in the process.
What can we do about it?
We need to open our minds to new designs, structures, and ways of working that will propel us into the future, unlocking all the creative energy and talent that has been lying dormant for years. Just as the auto industry is exploring an array of options to rise to the challenge of meeting vastly different customer needs whilst reducing environmental impacts, there is no one blueprint for future-fit firms. While there will be many patterns and principles that are shared, we need to do the hard work of researching, experimenting, and refining what is effective and dropping what isn't.
Though this may be a frighteningly ambiguous proposition for mature companies that have operated successfully for decades under a traditional hierarchy, the alternative approach of working in the same way we always have is even scarier. Many companies are now feeling the full effect of post-COVID inflation woes along with the so-called great resignation ripping away some of their best talent, with the fear that the remaining workforce is silently quiet-quitting, eating away at an already tight bottom line.
To those who can see that the way you're working now just isn't working, but are unsure how or where to start with a better way, know that you're not alone. There are countless companies across every industry from materials science to home appliances to entertainment that have transformed their organisations to reflect the reality of the world we're in and risen to the top of their respective industries as a result.
Instead of asking how we can get more out of our people, it's time we asked how we get more out of our organisations; how we can remove and re-create structures, systems, processes, and policies to better serve our staff and customers. We need to cultivate leaders and learners at all levels, inviting people across the company into optimising our organisations instead of trying to solve it in the board room. There is an ocean of untapped talent in our companies waiting for the opportunity to bring their unique skills, perspectives, and creativity beyond the confines of their roles to make more effective companies for everyone.
To learn more, reach out to hello@culture-coach.org. I'd love to learn more about your challenges and goals to see how we could work together to help you and your organisation be the best it can be.
Comments