LEADING THOUGHTS

Jim Clifton, Chairman and CEO of Gallup, says process improvement (Six Sigma, lean-management, and the like) was “the last big leadership evolution.” “Now companies are structured to do a magnificent job with that kind of data,” he says in an interview with Gallup Management Journal. “But it’s absolutely not enough anymore. There hasn’t been a big idea for leadership in 25 years, nothing that shows the huge sweet spots and pushes the big advancements.”

The next big idea, Clifton says, is for leaders to have an in-depth understanding of “states of mind” of their constituencies, which he describes as “their will to work, their will to live, their will to revolt, their will to follow you.” And it means understanding their emotions: how much stress your constituency feels about money, trying to get to work, or dealing with over-bearing supervisors.

That understanding has to be based not on anecdotes and gut feel but on behavioural economics and mathematics. According to Clifton, if you can quantify states of mind, you can better understand the emotions that cause behavior. An example: “Remember when everyone thought Middle Eastern Muslims hated Western freedoms? That’s dead wrong, according to our research. Freedom is one of the things they admire most about the West. It’s the politics they don’t like.”

Sounds a bit like an advertorial for the services of Gallup, though his call for greater rigor in decision making is fair comment. For the full interview, go here.

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Public agencies may be doing a good job at slashing waste using Six Sigma and lean techniques but they could be doing a lot better by focusing on the “soft” side: implementing a robust management structure and changing employees’ mindsets.

In the publication McKinsey on Government, consultants Maia Hansen and John Stoner offer a step-by-step approach to establishing the right infrastructure for a lean transformation (lean has been defined as strategy that focuses on eliminating waste, which includes all processes that do not add value to the final product or service).

Create a value-stream map that identifies where value lies in each step of the process. “Our strong recommendation . . . is to form a cross-functional team with representatives who interact with the process in a variety of ways and therefore see it from different perspectives.”

Get data to the right people at the right time. That means focusing on Key Performance Indicators that matter most and ensuring that the right people are viewing them.

Establish new roles to smooth processes. The lean initiative may be best served, for example, by creating a new coordinating position to boost efficiency.

Align interests to drive momentum. The McKinsey consultants like gainsharing arrangements to embed the concept of continuous improvement, build morale, and sustain enthusiasm.

Hansen and Stoner also offer suggestions on how to change employee mindsets.

Get staff to focus on the consumer. This may be a challenge for a public agency with no competitors, but a good technique is to have employees follow a customer through the entire process of interacting with the agency/employer and to experience bureaucratic frustrations.

Break down silos. Make sure units know what other units are up to or create shared metrics to help units better understand shared goals.

Inspire employees to overcome risk aversion. The public sector may be allergic to performance measurement and risk but managers can change that perception. “Managers should thank employees for trying new approaches,” the authors write, “and focus on solving problems rather than assigning blame for mistakes.”

A Leaner Pubic Sector, by Maia Hansen and John Stoner; McKinsey on Government (Number 4, Summer 2009)

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I often wonder why some management theories seem to have great legs and others can’t get out of the stable. How do paradigms shift?

To find out, Nick Oliver of University of Edinburgh studied the adoption of Japanese “lean” manufacturing methods in the UK, in a couple of unconventional ways. First, he was a participant-observer in a one-day seminar by lean guru Dr. Eliyahu Goldratt. Second, he studied the response of the UK engineering community to the publication of a report questioning the financial benefits of lean manufacturing methods.

Oliver found in these two cases that the language used to discuss lean ideas sounded a lot like the language used in religious conversions, and the responses to criticism of the methods were similar to responses to religious blasphemy. So much for rationality.
Oliver concluded that factors such as the aesthetics of ideas, their intuitive appeal, the method by which they’re delivered, and the characteristics of their promoters all influence their acceptance at least as much as hard evidence of their efficacy.

There is a payoff for change management practitioners. If the author is to be believed, purveyors of new ideas (such as org change) should project “expertness”, trustworthiness, and personal dynamism. As for the ideas themselves, there should be local demonstrations of applicability and they should somehow predict events and/or solve problems previously considered to be intractable.

Rational choice or leap of faith? The creation and defence of a management orthodoxy; Nick Oliver; The Learning Organization Journal (2008, vol. 15, no. 5, 373-387)

Email me for a copy of this paper: Alan [at] AlanMorantz.com

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