When things go wrong in an organisation, managers in a mass-production arena usually criticise 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, 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.
System factors such as these account for over 90 per cent of the variation in service performance. 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 individuals, so systemic changes are needed if there are to be breakthrough improvements. In the Customer Value Enterprise® model, changing the system is the responsibility of those who work in that system.
The mass-production paradigm contrasts significantly with the Customer Value Enterprise® paradigm, and there is no continuum from one to the other. Yet in practice most organisations currently work using mass production. So how can one flip from one paradigm to the other?
To make this shift takes strong leadership that allows staff to work in both ways for a short space of time while transitioning from one to the other. With a lot of courage, tenacity, honesty and clarity of purpose, staff and managers can drive the organisation from one paradigm to the other. This allows staff to experience both paradigms – and the flip, when it happens, is very quick.
Three major components are necessary.
- First, collect data about how your organisation responds to real - not perceived - needs – of your customers.
- Second, assess how your organisation performs end-to-end in achieving customer purpose. Once staff have collected the data, they can discuss it with managers and talk more easily about change.
- Third, as well as gathering data, staff need to appreciate what the reality is like. As they grasp this experience, 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 relies on learning the principles of all three and bringing them together. Because they are so interdependent, change will occur only when all three are addressed at the same time.