What would you Improve

Regarding accountability, it is managers first who must be accountable for providing an environment in which practitioners can subscribe to a defined process without conflict or dilemma. Practitioners work in systems and in cultural settings which have far more impact on their individual ability to follow process. Too many organizations think that improvement can be attained by instituting some process without changing the policies, metrics, and underlying operating "thoughtware."

The true accountability for non-compliance is, 9 times out of 10, systemic; not in the sphere of control or even the sphere of influence of most practitioners. Before enforcing consequences, the systemic cause of non-compliance must be understood and corrected first.

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I wish I could find the quote and source that I'm trying to think of in response to your post. It goes something like...

"The fastest way to accomplish something is to do it once. The cheapest way is to do it right the first time."

I don't really think that the "notion that quality costs more" is really all that pervasive these days. But unfortunately, that does not stop people from paying inordinate attention to costs and resource utilization. I suspect the reason is that people see costs as one of the few things that they think they can manage, as they seem to be a direct effect of indivual or local decisions. "It's tough to manage demand, so let's focus on costs. The larger value chain system is too complex to manage as a whole, so let's manage the hell out of the links. After all, cost improvement (weight reduction in the chain metaphor) is as valuable in one link as it is in another."

This is a artifact of what is known in the Theory of Constraints as "cost world thinking." It is a remnant of the good old reductionist thinking that characterized most of management thinking in most of the last couple centuries. It is reflected in classic allocation schemes of cost accounting, in the more onerous remnants of misapplied ideas of the much-aligned Frederick Taylor, and in PM, the emphasis on keeping "on track" by focusing on task due dates, or on the pressure to multitask in multi-project environments -- all misguided attempts at trying to manage a system by managing the parts. You can't blame most managers for thinking this way, or behaving accordingly by focusing on costs, since their typically rewarded for the local performance of their link of the chain.

The antithesis to this too common cost world thinking is the "throughput world." In this understanding of systems, the focus is on the goal -- the purpose of the system (pulling weight for the chain). Improvement is defined by achieving more "goal stuff" and is limited by the constraint of the system (the weakest link). Appropriate behavior on the parts of the stronger non-constraining links is NOT to lean down to match the capacity and capability of the weak. Doing so, if it were possible, would only result in an unmanageable, chaotic system, brittle and sensitive to breakdowns everywhere.

Instead, management in the throughput world is one of subordination to the constraint...doing whatever one can to support the ability of the constraint to do more, or at least not wasting the performance of the scarce, valuable constraint.

What's interesting is that you really can't live in the cost world all the time without feeling the pain in terms of quality and throughput. But without exposure to throughput world "thoughtware," pressures to focus on local performance keep management in an unsatisfactory state of either oscillation or compromise between the two.

How IT and the business align is a matter of where the organization's constraint is and where, strategically, it should be.

"The best way to sell this to the management account type" is to show how the local pains that they feel are an outgrowth of the unsatisfactory compromises or oscillations that result from trying to live and work in the cost world and demonstrate possibility of alleviating it through a throughput focus.

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Regarding the outcome of focusing on the cost side of the business equation, Michael wrote: "The downsizing craze probably cost the econamy trillions but the trillions were in lost opportunities."

Here's a few quote from a recent NY Times article (free registration required to access link that might not be there due to the Times' practice of archiving stories for paid access after a period of time) that got me thinking...

"By cutting back the hours of workers without reducing the workload, employers pushed up the nation's annual growth rate of productivity by 1.1 percent in the second quarter..."

"Rather than keep idle employees on the payroll, companies now lay them off and cut overtime so quickly that output per hour in the second quarter continued to rise despite almost no increase in production."

"It is easy in the United States," said Robert J. Gordon, an economist at Northwestern University, "to get sharp and sudden declines in hours by laying off workers..., and this contributes to healthy productivity growth in hard times."

What it got me thinking about was that this "productivity growth" number, which is usually interpreted as the productivity of the nation is really only the productivity of the working part of the nation. Taking a bigger picture, whole system view would require factoring in the layoffs of the thousands of creative, potentially productive people. I wonder what the real change in the nation's productivity is? Total output versus total resouce looks a lot different than total output versus utilized resource.

Being New Jersey based, near the home of AT&T, Lucent, Avaya, Telcordia, and as a former employee of that industry, I've watched local business headlines full of layoffs. The lost opportunities associated with the idling of 10's of thousands of creative, potentially productive is staggering. (I almost said "criminal.")

On the "correlation between workmanship and cost..."

hmmm . . . I wonder if the real correlation is between workmanship and value, and therefore those who provide it can charge more, thereby translating into higher "cost." Yes, sometimes, workmanship takes more time, and therefore consumes more resource (costs more), but if the value of the workmanship wasn't compensated in the market, the effort wouldn't attract those resources, except perhaps for those for which the workmanship is a calling (artists come to mind) and are willing to subordinate their comfort/compensation to their calling.

That said, I'm with you on the preeminince of Value.

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I guess the gist of the article is that we've gotten real good at managing the bottom line by "managing" costs. My feeling is that the failure to manage the top line effectively -- the failure to create and communicate the value of the output -- the failure to innovate in both the product and its marketing has seemingly forced companies into this cost world focus. I said "seemingly" because I think that the acceptance and relative ease of layoffs and downsizings and restructuring has drained limited management attention and time from driving innovation for the top line.

On top of that, the mass psychosis known as the dot.com bubble of a few years ago (has it been that long) allowed a lot of them to get away with it...

...for a while.

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