A Great System

In my last blog about the importance of management systems, I wrote about the system being the solution. Ignoring that the cliché will often induce a rolling of the eyes and a cessation of listening, the key takeaway is that average people in a great system will outperform great people in an average (or missing) system.  Make no mistake: the best performance results from great people operating in a great system.  So what does a great system look like? There are lots of varieties (one thing they are not is prescriptive), but I want to focus on three key aspects that distinguish great systems from very good systems.  The first key element is reflective of Jim Collins’ ‘genius of the AND’: a great system isn’t focused exclusively on optimization at the expense of innovation… it addresses both. Most people get the idea of a system applied to production, that a disciplined approach and deployment of integrated activities can yield top quality and lowest cost of known, discrete deliverables. That framework is intuitive in a manufacturing setting, producing goods for a waiting market. Alas, markets aren’t waiting any more.  Purchasers have real-time access to a marketplace of old and new products and services, and they’re ready to spend their money on anything that holds the promise of delivering more value to their efforts than the last purchase they made. [Value isn’t just getting more while spending less.  It’s also about the experience a buyer has in obtaining and using the product or service.]

And that’s the problem.  The rate of change in markets, in the world, in our lives, just keeps accelerating. What worked to be successful yesterday may or may not work today. So the best management system has a generative mindset of intentionally creating the future you want AND the ability to optimize inputs and outputs to produce the best performance now AND every point along the way.

For those who think that innovating for the future can’t be systematized, I point to the Hasso Plattner Institute of Design at Stanford, better known as the d.school. Their bootcamp is a primer for one of the most disciplined approaches to creativity you’ve ever seen. It’s a system.  Just because a management system starts with inquiry without a predictable outcome doesn’t mean it isn’t structured and disciplined. It also connects the dots by acknowledging that even the best ideas have to be implemented... profitably.

Every school child knows of Thomas Edison’s formula of genius being 1% inspiration and 99% perspiration.  It’s too bad that we don’t have Edison’s insight in these fast-paced times.  I’d love to hear his take on revising the formula to match the environment, but I have the nagging suspicion that he’d challenge us with a total greater than 100%.

The second aspect of the best management systems is that they engage the talents and energies of people throughout the organization, and not just those at the top of the pyramid. It is the front line that does the work that makes things happen, so they have an informed point of view on how to make products and services more valuable.  They need the clearing to voice their ideas and passions, and perhaps some help sorting out the few opportunities that are most promising from the universe of possibilities that are available.

Counter-intuitively, the best systems don’t eliminate failure… they encourage it by fostering a sense of safety for experimentation.  Not big expensive failures that make the front page, but fast, cheap failures that accelerate learning and adapting to rapidly changing conditions.  As tech pundit George Gilder says, ‘Fail fast. Fail cheap. Win big.’

The third key aspect of a great system: it’s easy.  If a system requires so much effort that it isn’t easily sustained, it may work over a brief period but will not generate great performance over time. The system has to be transparent within daily activity or it won’t last.  Ironically, making it easy is actually the hard part of creating the system. Florida Power & Light was the first winner outside of Japan of the Deming Prize, globally recognized as the achievement of world-class quality.  The people at FP&L implemented a system that required extraordinary levels of measurement, much of which had to be done manually.  [An important design goal of the processes within the system is that measurement should be a byproduct of each process and not a separate process itself.] After celebrating their achievement, people all but abandoned their measurement zeal because it was just too hard.  I’m not saying that their performance deteriorated, but imagine making the choice of abandoning a system that helped you become world-class. As Rosabeth Moss Kantor wrote in Confidence, winning streaks stop when the team abandons the very system that sustained the streak.  The management system can be embedded in the organization's culture, making it so pervasive it is virtually invisible.

A great system for these times?

Generative + Inclusive + Easy = Success

Add great people -- those who learn continuously and who commit to your mission, vision, values, and goals --and you win.

What do you think makes a great system?