CHANGE AND THE ILLUSION OF KNOWLEDGE.

Most business leaders recognise the need to improve how their organisations function. In a VUCA world if you are not improving then, by definition, you are falling behind. But a well-known statistic in the “Lean” community is the 90%+ failure rate of/CI Lean/(CI) programs. Most get the overall reason correct in that most of the failures are due to lack of leadership buy-in. However, what most do not understand that this lack of buy-in is not due to ignorance but rather to the “Illusion of Knowledge” where people tend to latch onto evidence that supports their beliefs & ignore evidence that undermines those beliefs. “It has always been done this way, why change?” ?

This outdated belief system is based on outdated philosophies of Frederick Taylors Scientific Management Methods developed over 100 years ago. Admittedly Taylors methods have been corrupted in recent years, but his underlying assumptions persist. These are where a business is a stable and unchanging entity, a command-and-control style dominates, the assumption is that most errors are the fault of the employees, and those same employees are motivated by external carrot and stick incentives.

For a successful CI culture to take hold a management paradigm shift from Taylor is required. Such a shift is uniquely provided by the management philosophy of W. Edwards Deming. Demings’s world is built on statistically based systems thinking with multiple and continuous interactions that the old command and control cannot hope to manage. Where entropy (a tendency for systems to fall into disorder) is inevitable and will continuously degrade those same systems unless actively managed. Further he was a humanitarian whose management thinking was suffused with the tenet that “everybody is entitled to joy in work.”

Management with the Taylor mindset and faced with the decline in their company will typically look for causes outside themselves: the market, the competition and especially the employees. In their attempt to wave a magic wand at disaster they take the easy option of paying for ready-baked consultant led solutions that focus on employees as the problem rather than looking at themselves for the solution.

The problem in implementing change is not new. Niccolò Machiavelli well defined the problem in his 16th century political treatise “The Prince”:

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. For the innovator has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarmness arising partly from fear of their adversaries … and partly from the incredulity of mankind, who do not truly believe in anything new until they have had actual experience of it.”

The problem to be overcome was well defined by Einstein:

“There Is No Failure in Learning, But There Can Be in Refusing to Unlearn.”

Once this is understood the action required is better defined but no easier. Difficult conversations are required. Business Leadership is being asked to change the fundamental way in which they manage. On my interim assignments early discussions with the CEO & leadership team will often include references to the calibre and attitude of their employees. After a month or so, the hard follow-up conversation I have with them is that the problems are of their own making, and (most importantly) they need to own them. Their employees are good people who want to do a decent job but have simply been poorly managed and ground down within systems and processes not fit for purpose. It explains the cause of “toxic” company culture that drives high employee turnover.

Beyond Deming’s basic philosophy and the need for total Leadership involvement there is no standard playbook for implementing sustainable Lean/CI. Early in his time in Japan Deming realised that he had to engage industry CEOs for his (then) developing philosophy to gain traction. Leadership needs to take and understand these principles and develop their own culture. It is why expensive bought-in consultant solutions will always fail.

Importantly Deming walked the walk! He was instrumental in winning WW2 helping America to produce armaments at a rate that the Axis powers simply could not compete with. He helped inspire the Japanese Industrial miracle from the atomic ashes of WW2. He is responsible for the future prosperity of us all.

The potential from pivoting from outdated management practice to one based on Deming’s philosophy is enormous. Imagine the potential of your company where all its systems and processes are predictable, your service always meets customer requirements with minimum variation. Further your employees are driving to continuously improve customer experience in terms of quality, lead-times and OTIF to leverage Real competitive advantage to drive organic business growth. Deming works every time in every business, in every situation. It is that powerful.