Category Archives: Systems

What Changes About the Work?

What will be the nature of work?

As we adopt technology into the enterprise, what will change about the work? Those who sit in my workshops know that I define work as – decision making and problem solving? What will be the nature of decision making and problem solving as we embed technology into our internal production systems?

Production Work (S-I)
Physical robotics are already creeping in to production work (S-I). Robots are most often adopted into physical work that is repetitive, requiring precision cuts, punctures, bends, dipping, pouring, lifting. Robots are also useful in production environments where human involvement is uncomfortable (cold, heat) or dangerous (hazardous exposure). As companies adopt robotics and other technology, what changes about production work? What decisions are left for humans?

Supervisory Work (S-II)
And, what of supervisory work (S-II)? Typical (S-II) tools are schedules and checklists, the role is accountable for making sure production gets done, on pace and at standard spec. If we can sense most critical items in a production environment, with precision, in real time, what decisions are left for humans? As companies adopt technology, what changes about supervisory and coordinating work?

Managerial Work (S-III)
And, what of managerial work (S-III)? Typical (S-III) tools are work flow charts, time and motion, sequence and planning. The role is to create the system that houses the production environment. Most sub-enterprise software (as opposed to full enterprise software) is simply a transaction system that records transaction activity through a series of defined steps. Most computer software contains embedded rules that enforce a specific sequence of task activity. If most systems are designed around software systems, what decisions are left for humans? What changes about system work?

Executive Management Work (S-IV)
With a concentration in Ops (COO), Finance (CFO), Technology (CTO), the essence of executive management is functional integration. Most enterprise (full enterprise) software is designed to integrate end to end functionality across the organization. It contains hooks that communicate from one function to the next, with a plethora of configurations possible depending on the desired integration. If functional integration is controlled by enterprise software, what decisions are left for humans? What changes about functional integration work?

These are not idle questions.

Check Your System

Gerard was puzzled. By chance, the night before, he ran into Nancy, a former employee, at a local restaurant. The conversation was cordial, but surprising to Gerard. At her new company, Nancy was responsible for a competitive product that was kicking butt in the marketplace. When Gerard terminated Nancy for not reaching her goals, he felt she was a marginal contributor with a big “L” on her forehead. Now, she was in charge of a development team at another company that was eating Gerard’s lunch.

Gerard explained to me that after Nancy’s termination, he had two more managers fail in the same position. His complaint was that he just couldn’t find good people. Now, he was puzzled.

Success is determined, not only by the person in the role, but also by the circumstances and systems that surround that role. Before you terminate someone, be sure to check your system. If your system is broken, the next hire will not fare any better than the person you are currently pushing out the door.

Reactive vs Proactive Sales Management

From the Ask Tom mailbag –

Question:
We have 15 sales managers and 100 sales reps. We’ve taken top performing sales reps and made them managers. Now as managers they are finding it hard to find time to manage the behaviors of their rep team members. They don’t argue that the more time they spend directing their reps the more productive the reps become. But these dedicated managers are spending nights and weekends catching up with directing (through our CRM) the actions of the reps. The managers are still our best closers. No one on the team is better. How do I coach the manager?

Response:
As the sales manager (of reps), what do you want me to do? What is the level of work?

If your dedicated managers are spending nights and weekends directing their reps, what do they do in the daytime? This description is classic S-II behavior. It appears there is no system, no systematic coaching, no systematic sales planning. It appears things are ad-hoc, reactive and improvised. It is possible to be effective with this strategy, but at what cost? You will burn out your sales managers and begin to experience turnover.

This ad-hoc behavior is your fault. You have not created an effective system (S-III) for your sales managers to work in. Your coaching with your sales managers needs to focus on sales planning, pipeline evaluation and rep evaluation. What are the proactive moves (rather than reactive moves)?

As long as your sales managers remain reactive, your company will experience no better sales performance than it has in the past. Only when you create a system approach to your market, will you experience deeper penetration. And, your system should be operated as a day job, not nights and weekends.
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The Danger of Missing Stratum IV

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From the Ask Tom mailbag –

Question:
We have silos. Everybody is in a power struggle. We used to have a great reputation, but I think we outgrew it. The company seems lopsided. Sometimes sales outstrips our ability to fill orders, so some of our sales orders turn into back orders, some of our back orders turn into canceled orders and some of our best customers defect to the competition. Other times, production outstrips our ability to sell, so our finished goods don’t get sold, they stack up in the warehouse. The warehouse gets full, so we rent another warehouse. We carry inventory so long it turns obsolete and costs to hold, eat up our profit. We are like a monster machine. Just read a book by Ken Blanchard Be a Silo Buster. Do we really have to bust up the company and start over?

Response:
With all due respect to Ken Blanchard, you created those silos for a reason. Do NOT bust them up. You need efficient, profitable internal systems. It is not a matter of busting up silos, it is a matter of integrating them together. This is a classic example of a company growing into Stratum IV. This is similar to the chaos we see in Stratum II companies, but on steroids. This is not a few individuals stepping over each other. This is whole departments, internally focused, head down, nose to the grind stone without care or consideration for the other functions in the company.

But, the fix is not to tear them down. The fix is integration and requires capability at S-IV. This is not finding the constraint in a single serial system (S-III), but understanding the impact of one system on another system (S-IV). This is not root-cause analysis, but systems analysis. We have reinforcing systems and balancing systems. This requires, not serial thinking, but parallel thinking.

This is not multi-tasking (because humans cannot multi-task), but truly seeing the dependency, inter-dependency, contingency, and bottle-necks that exist among out multiple systems and sub-systems. This requires a parallel state of thinking. Two specific things to look at –

  • Balance of each system output, optimized to its surrounding systems output.
  • Handoff of work product from one system to the next system as work output flows through the organization.

Optimization
Sales has to be optimized to production. There is no sense selling inventory that cannot be produced timely to the sales order. There is no sense producing finished goods that cannot profitably be sold timely to the market. The output of both systems has to be optimized so they work in sync. Reinforcing systems and balancing systems.

Handoff
A department, head down, will work to their own internal efficiency. The state of their work product may be incomplete or carry a defect for the next stage in the work flow. Work does not flow up and down in a department. Work flows horizontally through the organization, output handed off from one department to the next.

  • Marketing hands off to sales.
  • Sales hands off to estimating
  • Estimating hands off to contracting
  • Contracting hands off to project management
  • Project management hands off to operations
  • Operations hands off to QA/QC
  • QA/QC hands off to warranty
  • Warranty hands off to research and development
  • Research and development hands off to marketing, and so the cycle goes

Each handoff must be inspected and improved. This is the role at S-IV.
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To read more on system constraints, theory of system constraints, The Goal by Eli Goldratt.
To read more about reinforcing and balancing systems, The Fifth Discipline by Peter Senge.

The Danger of Missing Stratum II

The Danger of Missing Stratum III
The Danger of Missing Stratum IV

Impact of HR at S-III (System) Level of Work

From the Ask Tom mailbag –

Question:
I read your post yesterday about HR at different levels of work. I am stuck at S-II. How can I make an impact at S-III? How do I get the company to understand why this is so necessary?

Response:
Most companies see the HR role at S-I and S-II as necessary only because they are mandated by law to keep track of that stuff (compliance). By definition, administrative processes do not directly add value to the product or service experienced by the customer.

But, there is a silent switch at S-III where Human Resource systems begin to add value. It is not that most companies don’t see it as necessary, most companies don’t see it at all. They are blind to it. The only time they respond to it is when they find themselves suddenly short-handed.

Here is the prescription to have HR impact at S-III (system) level of work. Get out of your office and meet individually with each functional manager. Here is a list –

  • Sales manager
  • Marketing manager
  • Contracting manager
  • Project manager
  • Operations manager
  • QC manager
  • Warranty manager
  • R&D manager

Ask them these three questions –

  1. What is the output created by your (function) department?
  2. What roles and how many people do you need to do that work?
  3. What will change in a month, six months, a year related to your work output and the people you need?

Go back to your office and write up your notes, one page per function. Put these is a tabbed 3-ring binder.

Have another meeting with each manager, show them the one page and ask three more questions –

  1. Describe each role on your team, what problems do they have to solve and what decisions do they have to make?
  2. What does each of those roles cost you in compensation?
  3. How long does it take (lead time) to find candidates and train someone to be productive on your team?

Go back to your office and write up your notes, one page per function. Put these in the tabbed 3-ring binder.

By now, you should see the pattern of these questions and the construction of this human resource system. As the HR manager, you are making this system visible to each functional manager, so they can see it. You have also established a series of meetings that will continue (forever) where you will ask questions and begin the execution of this system. Your next meetings will consider these questions –

  • If you expect work volume to increase (or decrease), given the lead time for training, when do we need to begin a recruiting effort?
  • How will we describe the role in a job posting?
  • How will we include the necessary elements in a role description?
  • What are the key areas in each role, critical role requirements and output in each key area?
  • What questions will we need to create to use in candidate interviews?
  • Who would be valuable members on the hiring team?
  • What will the onboarding process (orientation, training) look like?
  • Which manager will be accountable for the output of this new hire?

Write up your notes, organize them into the 3-ring binder (your HR system) and EXECUTE. What you have created is a system called workforce planning. There is no magic fairy dust to this process, just a little (hard) work. -Tom

Whose System Is It?

“You were right,” Byron admitted. “I took a look at the system. The ten percent reject rate was caused by a small burr on a threaded plastic part. The part didn’t seal right and the cylinder wouldn’t hold the pressure.”

“So, your team could have worked harder, stayed longer, given it all their might and the reject rate would have stayed at ten percent?” I floated.

Byron nodded. “I was sure it was the team. I am actually sorry I yelled at them. They just seemed down in the dumps, lackadaisical, you know, unmotivated.”

“Why do you think they were down in the dumps?” I pressed.

“Probably my fault. They were, in fact, doing their best. I thought their best wasn’t good enough. I was too quick to lay blame. In the end, it was my fault. I ordered some surplus parts from another vendor. Our original supplier was so good, we only sampled one in a hundred parts in receiving, they were always good. The new vendor parts had a 50 percent failure rate, but the samples we pulled, one in a hundred, didn’t pick up they were out of spec half the time. It was the system that allowed the failure rate.”

“And, whose system was that?”

Byron almost choked, but managed to get it out. “Mine.”

Somewhere in the System

“I know I am accountable for the output of my team, but we still have a ten percent reject rate. If my team would just try harder, the reject rate would come down,” Byron protested.

“Really? Just try harder means what?” I asked. “You told me your team was doing their best. Are you telling me, now, that they are not doing their best?”

“They seem a little down, discouraged. I know I have been on them. We need a 100 units of production each day and with a ten percent failure rate, that means we have to run 115, on average, to get our 100. If they would just try harder, they would get there.”

“I am going to make an assumption,” I said. “I am going to assume that your team shows up every day to do their best. If your team is doing their best, then there is something else in your system that is causing the failure rate. You are a smart guy. Get a big white board, draw out your system, get your team together and find it.”

Why Would They Skip a Step?

“What do you mean, I see things that my team cannot see? If they would just look, they would see it, too,” Max pushed back.

“Max, you are a manager. You are responsible for creating all the systems that people follow. You know more about how things work and how things go wrong. Give me a short list of things you see, that your team doesn’t see,” I asked.

“Short list?

  • Sometimes, we get parts in from our vendor that have a slight defect. If we use that part in our assembly, when we get to the end, the unit will fail a pressure test.
  • If we skip the pressure test, the units get boxed and sent to customers, who install defective units. Their first call is to the salesperson, who gets an earful from the customer.
  • If the salesperson gets three customer phone calls complaining about defective units, the salesperson loses confidence in our ability to make a quality product. He stops selling.

Should I go on?” Max quizzed.

“Why can’t your production people see that?” I prompted.

“I guess they can’t put the dots together. From the time we get that first defective part, to the time the customer complains could be three months time. And when the customer complains, we still have to track down the problem, then reference our production codes to find out when the units were actually produced. It might take another week just to track down the problem. There is too much disconnection for my production team to follow. They just know they get yelled at for skipping a parts-inspection and a pressure test.”

“And, why would they skip a parts-inspection?” I wanted to know.

“Funny, the team was actually proud of their assembled output that week. We were in a bind for a large order. It meant overtime and a team bonus for 50 extra production units that week,” Max lamented.

“So, let me understand. You design all the systems out here, including the bonus system for exceeding production quotas in a shorter period of time? And you wonder why the team skips steps, to get their bonus?”

Operations and Command and Control

“If only life and business were that simplistic,” Scott said. “If you work in operations then your job is about commanding and controlling the time, labor and technical resources towards an agreed output. For the jobs in operations, your vision makes sense. But, I think it is only a functional perspective, not a universal one.”

“You seem to think that operations is all about command and control,” I replied. “It sounds a bit mechanical. Tell me more.”

“Operations is operations. Pretty cut and dried. We have defined processes inside efficient systems. Line up the people, line up the machines, line up the materials. Pop, pop, pop. Predictable output. Yes, it is a bit cut and dried.”

“If that is all there is to it, then why don’t we have robots do all our work?” I probed.

“In some cases, we do,” Scott raised his eyebrows in a subtle challenge.

“Yet, even in the midst of defined processes and efficient systems, even in the midst of robotic welding machines, we still have people engaged in operational work. And in that work, as defined as it is, aren’t there still problems that have to be solved and decisions that have to be made?”

“Well, yes,” he nodded.

“So, inside a process you describe as command and control, there is still discretionary decision making?”

Scott continued to nod.

“So, it’s not all neat and pretty,” I said. “Not all tied with a bow. In fact, some days, the work gets downright messy. Even mature processes are subject to variations in material specs, worn machine parts, delays in pace. Command and control short-changes the discretionary judgement required to effectively operate a well-defined system.”

Inspired by a comment posted to Responsibility, Accountability and Authority

Not Enough Time

“I gotta get something off my plate,” Adrian shook his head. “I am so busy, I just don’t have time to get everything done.”

Busy?” I asked. For me, busy is a code word, a clue, that there is a mis-match in level of work.

“Yes. Busy. I get here early to catch things up from yesterday, make some headway on one of my projects, but about 7:30, the chaos begins.”

Chaos?” I asked. For me, chaos is a code word, a clue, that there is a mis-match in level of work.

“Yes. Chaos,” Adrian replied. “Unsolved problems from yesterday. Yesterday’s decisions delayed until today. It hits my email, it hits my text messages, it hits my phone, it walks through my office door.”

“So, you think you have a problem?” I clarified. “And, if you could get something off your plate, you would have more time? And if you had more time, you wouldn’t be so busy? And if you weren’t so busy, there would be less chaos?”

“That’s it,” Adrian agreed.

“Then, why did you start coming to work so early?” I probed.

“Because I was too busy during the day. There was too much chaos during the day. I couldn’t get anything done,” Adrian was frustrated with his circular problem.

“So, you came to work early to get more time, but you are still too busy and there is still too much chaos? Do you think not-enough-time is really the problem.”