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Why LEAN Management Fails in 2017?

21-01-2018

Let’s look at what are the key three reasons why management is failing in 2017?

And let me start with the history. (1890-1940)

At the turn of the century, the most notable organizations became large and industrialized. Often, they included ongoing routine tasks that manufactured a variety of products.

The United States highly prized scientific and technical matters, including careful measurement and specification of activities and results. Management tended to be the same. Frederick Taylor developed the “scientific management theory” which espoused this careful specification and measurement of all organizational tasks.

Tasks were standardized as much as possible. Workers were rewarded and punished. This approach appeared to work well for organizations with assembly lines and other mechanistic, routinized activities. And you can find many elements of so-called “scientific management theory” active today in the majority of the organizations around the world.

I am talking about specifications, standards, budgeting, KPI planning, tracking, and reporting.

As the years passed-by, eventually, unions and government regulations reacted to the rather dehumanizing effects of these management methods. As a result, many companies have established HR departments.

And it helped to bring in some valuable ideas into companies. For instance, it became obvious that instead of only commanding it is also important to learn to delegate, use career development as a motivating factor, coaching, mentoring, etc.

The problem we encounter today is

that management assumes people are not willing or not capable to perform. Therefore, they make the majority of the decisions "at the top". Moreover, managers, today use a bunch of tools to control people: budgets, appraisals, quotas, policies and procedures, disciplinary programs, etc.

Meanwhile, the time is running and a big part of the “workforce” simply loses hope. Therefore, they start to look for something else. Just look at the next chart. It will give you some feeling about the trends in the self-employed industry!

There is a massive gap in the scientific management theory. Management assumes all the workforce is unmotivated, cheating, incapable to think or to deliver business results without being pushed. Meanwhile, according to Forbes, more than 35% of the active workforce in the US are already self-employed. And this is the reality.

Furthermore, all the freelancers are not only capable to deliver on their occupational strengths or professional services. They can also figure-out how basic accounting works, where to find customers, how to take care of them, how social media marketing works, etc.

It all proves that scientific management theory is not working very well for the situation in 2017.

And this leaves us with the first major point of where management fails. They fail to understand that every person, everyone, all of us have good intentions and are capable of delivering value. People want to be challenged and recognized. Moreover, they prefer to do the thinking and decision making themselves.

The second problem

with nowadays management comes from the same roots. It was completely acceptable at the beginning to “use a stick”. In various ways.

Ruddiness, control, psychological pressure and even physical punishments used to be quite common not only at work but also at home and in schools.

Fortunately, companies have evolved these methods as the time was passing by. Today you will hardly find physical punishment practices at work (at least in western Europe and the US). Nevertheless. you will still find a number of tools to put the psychological pressure on.

Strict standards, specifications, threatening to fire you if you don’t obey them. Even LEAN practitioners helped to develop the use of visual micro-management boards.  Employees report lagging measures on which they have no impact. Managers demand actions if KPI was red. You are in trouble if you are late with the deadline.  What it all does – effectively causes a very strong emotion, called FEAR.

Safety

Looking further back into our history, we will see that people were living in the caves, in one-family groups. And they did not take too long to figure out, that sharing one bigger cave between few families makes things SAFER.

Did it make everything just easier? No. No, because there are lots of disagreements, different ideas, mindsets, norms, etc., but it is much safer to sleep when your “room-mate” is watching the entrance.

It is much safer to go hunting for that strong animal in the group, than doing it alone. And this craving for safety exists today to the same level as back then. We live in the cities because we know there is another job if I lose that one, there is also a doctor, teacher, fireman, etc. that will help me when the hard times come.

 

We even agree to pay massive taxes to be safe, to keep the police and armed forces operational. And this brings me to the second biggest problem of management: fear is destroying organizations.

Unfortunately, the majority of management practices encourages fear every day. Layoffs, yearly “performance review” process, micromanagement on KPIs, outsourcing of positions, etc. etc.

Every time you scare your employees, they stop to collaborate, create, innovate, develop, laugh, support each other. They will immediately shift to a self-protection mode. Will not take any risks. And they will not go that extra mile. Most probably they are already looking for another job, as fear directly contradicts everyone's craving for safety.

 

And the third big problem

with management in 2017 is that we still can’t focus on our customer. There is this huge gap in the ability to listen to what are your customers saying, sometimes screaming towards you.

There is entire array of different examples of how companies fail to fulfill the ever-changing and growing demands or wishes of their customers. Remember the last situation when you had to call a customer service center, because you either have not received what you have ordered, or there were some quality issues.

What was the most important for you when you called them?

Normally, people want to be heard, they want someone to listen to them about the issue they have experienced. Moreover, people prefer to talk and tell the story once. To one person. And furthermore, we all expect someone will do what it takes to fix the issue.

Meanwhile, more than 70% of all the call centers around the world will use some weird auto-voice-response system. It proves that management's wish to “save costs” is much more important than the customer satisfaction.

And this is only one example out of millions. I personally think this is happening due to the accounting system that companies use since 19th century without bigger changes.

The cost of one lost customer

is extremely hard to calculate. It is even harder to identify how much negative impact will that customer drive while communicating with his family and friends. And there is no way to track how much additional profits happy customer will drive.

But there is this logical fact, that if a company does not have customers, it cannot exist as a company. The sooner management can adopt that idea and let it flourish through the way they work, the faster they will get out of trouble.

Serving the customer needs provides a purpose for your teams. Furthermore, it brings in new customers, lets you understand if your processes are capable to deliver towards customer needs. And finally, it brings you revenues and fulfillment.

To summarise,

three biggest problems of management in 2017:

  1. Management has negative assumptions about people.
  2. Using fear to control the workforce.
  3. Setting direction yourself without focusing on the customer.

 

By Mindaugas Kulikauskas, Holistic Lean Management Coach



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