People performance vs. system performance

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People performance vs. system performance

Extract from Sense and Respond: The Journey to Customer Purpose (MacMillan 2005) Stephen Parry.

People are the problem according to Mass-Production

People performance vs. system performance
When things go wrong in an organisation, managers in the mass-production arena usually start to criticise their staff: ‘You didn’t make your quotas’ or ‘You didn’t make your output numbers’. Yet performance problems can have other causes, such as when demand exceeds the end-to-end capability of your value stream; when an unknown and inappropriate demand enters the system; or when someone along the value chain improves performance locally and inadvertently creates a knock-on effect downstream.

Factors such as these account for over 90 per cent of the variation in service performance (Edwards Deming, 1982).

Most of this variation is outside the power of the individual – individual performance can only contribute as much as the constraints of the current system will allow. Performance is created by the system, not by individuals, so if there are to be breakthrough improvements then systemic changes are needed.

In the Customer Value Enterprise® model (Lean Enterprise), changing the system is the responsibility of those who work in that system.

As has been said above, the mass-production paradigm contrasts significantly with the Customer Value Enterprise® paradigm, and there is no continuum from one to the other.

Most organisations currently work using mass production-thinking so how can one flip from one paradigm to the other?

To make this shift takes strong leadership which allows staff to work in both ways for a short period while transitioning from one to the other.

Lean teaches us that the system is the problem, but what needs to change?

Three major components are necessary.

First, you need to collect data about how your organisation responds to the real needs – as opposed to the perceived needs – of your customers.

Second, you need to assess how your organisation performs end-to-end in achieving the customer purpose. Once staff have collected the data, they can discuss it with their manager and talk more easily about change.

Third, as well as gathering data, staff also need to understand what the reality is like. As they grasp this reality, they become better able to collect the data. This process thus becomes an iterative one with these three elements.

The type of change we are advocating depends on learning the principles of all three and bringing all three together. Because they are so interdependent, change will occur only when all three are addressed at the same time.

More Customer Value Principles to come.

©Stephen Parry 2010 All rights reserved.

3 thoughts on “People performance vs. system performance

  1. When reading this article it reminds me of the profound experience of seeing this approach come to life.

    Quite sometime ago on a couple of occasions I had been part a group of people where we had to look at how services were being delivered to our customers, and both from the customers and employees perspective.

    I remember as if it were yesterday the hours and weeks spent gathering the data of how our “system” performed, and started getting glimpses of why employees did what they had to do in order to try and perform in order to deliver.

    When all the data was collected and analyzed it was incredibly sobering how much the design of the system was preventing anyone from succeeding or creating possibilities.

    We, the employees had a very honest and open conversation with our Sr. Management team and demonstrated to them what it was costing to continue to operate this way.

    We, the employees started by offereing to change one of our performance review targets, to improve end to end delivery performance. We saw the damage functional goals and targets was doing to the customer, employee and organization, which is why the interdependencies mentioned in the article cannot be broken.

    We, the employees had the data to support what type of system and the conditions we needed in order to have a system where everyone could succeed.

    This effort led to Sr. Mgmt accepting our proposal, and choice to move forward.

    We aren’t done yet, but for me personally I have seen and felt the significance to take responsibility to change the system within which we all customers and employees pull from.

    Many of us who have been through this have been working towards educating those on what it costs to continue in a system designed within the contraints of a mass production system. To give them the choice of how they want to continue, then support those who want to flip the switch from mass thinking-system performance towards lean thinking – people performance.

    I have seen significant growth in those with whom I work, growth which would have never been seen if we had continued to work in the old system.

  2. When I think of the different workshops we have had as employees working in the transition from the mass production environment into a Customer Value Enterprise the most significant and robust argument for us as employees to invest I such an change, was that we were able to show that the Senior Management is not only willing to change and to run a “great lean initiative” but they are in the consequence willing to measure on the relevant end-to-end data. This showed us as employees that the system which we were working in was designed on “mass production” principles and is forced to collapse sooner or later.

    The only way for the people working on and within a system to change from a mass production environment to a so called Customer Value Enterprise is to change the way of data collection and data qualification. If you are able to bring the value of relevant (real) end-2-end principles and data across you have the foundation for a successful change and a lasting change process to a better enterprise.

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