The Noble Profession Of Process Excellence

th3LS50DQUFlourishing is a remarkable book, and rather heartwarming for those toiling in the vineyard of process excellence.

Remarkable because it’s a radical critique of sustainability and Corporate Social Responsibility programmes – and, more widely, of 21st century capitalism – co-authored by two US business school professors and published by Stanford University.

The book is a set of interviews around eight papers by John Ehrenfeld, former Director of the MIT Program on Technology, Business and Environment and still, in retirement, a Senior Research Scholar at Yale. The interviewer is Andrew Hoffmann, Professor of Sustainable Enterprise at the University of Michigan.

In essence, Dr Ehrenfeld believes that our current understanding of sustainability, and its promise of a sustainable future, is a delusion:

“Hybrid cars, LED light bulbs, wind farms and green buildings, these are all just the trappings that convince us that we are doing something when in fact we are fooling ourselves, and making things worse….Reducing unsustainability, although critical, will not create sustainability.”

He proposes instead a wider, richer definition: “Sustainability-as-flourishing”. “Sustainability is the possibility that humans and other life will flourish on Earth forever.”  It’s a definition that includes issues of justice, inequality, wellbeing and social cohesion – with implications for the individual and the community, for every organization and institution.

His analysis is uncompromising: “Growthism is our religion and the Gross Domestic Product (GDP) is our god”. We neglect human well-being and focus overwhelmingly on material goals – “Our metrics of success are now principally measured in material terms” – so that “in making ourselves rich, we are making ourselves existentially and psychologically poor”.  He asks heretical questions about the value of corporate sustainability measures:

“Sustainability is a systems property. You don’t measure sustainability; it’s only a possibility. You strive to attain it. No single company is going to be able to measure their specific contribution to sustainability. What’s important is whether they are promoting a culture of flourishing or not. Are they structuring their company to promote fairness, wellness, equality, ecosystem health and community cohesion?”

His conclusions are surprising. Sustainability-as-flourishing, he says, requires the re-conceptualization of our lives around two big ideas. We need to shift our dominant mindsets from Having to Being, from Needing to Caring.  We need to shift from a dominant materialistic mindset to spirituality and love: “Sustainability-as-flourishing without love is not possible”.

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Scaling Up Excellence, The Toyota Way

Scaling Up Excellence The Toyota WaySo – if Scaling Up Excellence is a manual about how to create a ‘relentless restlessness’ that drives customer-centric innovation, where does that leave The Toyota Way? Do Sutton and Rao’s prescriptions ‘supercede’ The Toyota Way? What does Sutton and Rao’s analysis tell us about the continued validity of what has become effectively the gold standard in operational excellence?

There are clearly differences in scope. The Toyota Way is a complete philosophical system. It is structured, prescriptive and sometimes rigid; but its impact in engaging people, in nurturing their creativity and commitment to deliver continuous customer-centric innovation, has been awesome. Organizations the world over are proudly attempting to replicate it.

Scaling Up Excellence, on the other hand, does not attempt to define any kind of closed-loop system.  It is a distillation of the evidence about how best to promote operational excellence in the real world, shaped into a set of tools, tricks and mantras for ‘fighting the ground war’ that is the pursuit of continuous improvement. And it has a broader canvas too, taking in education, anti-bullying initiatives, creative industries and start-ups, for instance.

But there is a huge overlap. Much of the evidence presented in Scaling Up Excellence can be seen as a ringing endorsement for The Toyota Way. Both Stanford academics, Sutton and Rao pursued their quest with open minds, spoke to a lot of people and were led by the evidence. But their conclusions about how best to scale excellence closely mirror The Toyota Way: Continue reading

Why Governance Teams Are Not The Answer

HfS PwC - The Future of Global Business Services - June 2012It seems to me that there’s a fundamental flaw in the conclusions that HfS and PwC draw from their survey The Future of Global Business Services published this week. And that their recommendations would lead organizations down the wrong path.

The report focusses again on governance (which featured heavily in their joint report last year).

This year’s survey shows, they claim, that

“centralized governance organizations create the best outcomes…every organization should organize a governance team and, despite internal resistance from IT and business leaders who do not want to lose control, organizations should seriously consider centralized teams.”

All that I have seen in working with clients over the last ten years suggests that a centralized governance team is a dead end.  If by ‘governance’ we mean clear roles, responsibilities and accountability for driving every aspect of performance improvement, then governance has to be embedded in day-to-day operations.

A small core group supervising governance policies and their overall implementation across the enterprise makes sense. But the meat and drink of governance is the relationships and behaviours of process stakeholders. It’s about regulating actions in the real operational world of end-to-end processes. That’s where it lives and breathes.

Quality management offers a parallel.  Most often it was seen as a silo, separate from operational realities.  It was a box-ticking activity, a cost of doing business. No-one went into Quality Management to further their career. Then organizations like Toyota demonstrated the value of a completely different approach. They embraced quality and tried to embed quality thinking into everything they did.  They realized that quality only comes alive when it connects with everyday operations and gets people doing real work involved.

In Toyota’s case, Quality begat TPS and Lean of course – but that’s another story. The point is that nowadays a centralized Quality Management team is as rare as hen’s teeth. Quality should be everyone’s passion.

The HfS/PwC survey results themselves, and the HfS/PwC conclusions, illustrate that centralized governance teams can’t deliver:

“Governance teams frequently accomplish their primary objectives, but struggle to create similar outcomes in areas outside of their key focus areas.”

In other words, a centralized governance team may be able to railroad through cost savings, but it can’t also deliver innovation or agility or improved customer service. Centralized governance teams are naturally project-focussed and single issue. They can’t deliver sustained operational excellence and continuous improvement because that comes from ongoing collaboration between all the process stakeholders and users.

What every GBS organization needs is a collaborative framework that enables ‘Toyota thinking’:

  • a rich, ongoing and effective collaboration between all of the stakeholders of each end-to-end process (including of course its customers)
  • an engagement with process executors and customer users that will ensure their continual feedback and so drive continuous improvement.

Governance is the framework for this collaboration, the rules of the road that underpin rapid and sound decision-making.

Governance is absolutely a critical success factor, and especially in GBS environments which are often complex and fast-moving, with many actors involved. But its value comes when governance is embedded into the everyday, not ‘managed’ from some corporate ivory tower.

© Text Michael Gammage 2013