The People Vs The System – and Why The People Rarely Win

What if we overstate the effect of the people in our organisations, and we spend too much time addressing what they feel and think without addressing the more complex, systemic problems that influence how they perform or behave?

The supposition is prevalent the world over that there would be no problems in production or in service if only our workers would do their jobs as they were taught. Pleasant dreams. The workers are handicapped by the system and the system belongs to the management

W.Edwards Deming

‘It’s all about the people. Our culture. Our values’.

This is a common cry from companies everywhere – proudly announcing to the world that they only hire the best. Come and work for us and we’ll let you make a difference.

It’s seemingly a meritocracy then. The best companies simply recruit better, more motivated people. So we should be able to solve problems like the NHS , for example, just through better recruitment and retention policies?

There’s an elephant in the room here: what if we overstate the effect of the people in our organisations, and we spend too much time addressing what they feel and think without addressing the more complex, systemic issues that influence how they perform or behave?

According to W.Edwards Deming 95% of variation in the performance of a system (or your organisation) is caused by the system itself and only 5% is caused by the people. This is also known as Deming’s 95/5 rule.

Deming’s point , outlined in his famous Red Bead Experiment, was that in most processes any effect that the individual may have is swamped by the system they are a part of, in fact the variability they cause is just part of that system overall. As management owns the system, the workers themselves have little influence over the outcomes. When it comes to people vs the system, the system always wins.

In his book Beyond Command and Control, John Seddon states the change HR – or any people function – needs to make is obvious. “It needs to work on the 95% of the system that governs performance, not the 5% that doesn’t.” The starting place for these functions is after the systems have been redesigned. In practice, the typical HR function spends most of its time dealing with the fallout of performance failure, or training people for a battle they can’t possibly win.

One of the best posts I’ve read this week comes from Steve Blank, who tells of his frustration in attending an “innovation hero” award ceremony. His point is that rewarding people for ‘innovation’ and how they have battled against the system is actually just perpetuating the conditions in the system that prevent innovation. “The emphasis is on process, procedures, and sustainment of existing systems. Deviations from that which create chaos and diverge from the predetermined are not welcomed, let alone promoted, and funded. They are eliminated.”  Smart organisations recognise that people must be empowered to change the system – and instead of managers of process you need innovation leaders who shepherd ideas through an innovation pipeline.

I don’t 100% buy into the Deming rule – let’s remember that in his world he was talking from the perspective of a tightly controlled factory floor, assembling products. I don’t challenge the idea that the system affects performance, or that we pay too much attention to people problems. However, anyone who has worked in an organisation that has experienced a profound change in personnel has seen the disruptive effects (positive and negative) that people can have. They influence things way more than 5%.

For most of us our work is inseparably connected with the people who operate within the system. You can change a single person and suddenly the rules of the game have changed and everyone else operates in a different context. The same system maybe, but in a very different context.

However, overall this is why one-size-fits-all transformation approaches don’t work, and for good reason. Transformation measures need to be carefully calibrated to the complexity of different areas of the organisation. More attention needs to paid to complex systems and how they fit within the overall organisational design.

Many managers though don’t want to go here – it’s too much like hard work. It’s genuinely easier to focus on ‘leaderism initiatives’ and management BS than it is to change the system.

I contend that the root cause of a lot of this is short-termism. Of Boards and Execs are often focussed on backward looking performance metrics rather than sustainable goals that may take years to realise. Larger scale change dies or thrives from the top. Accordingly the role of Boards in understanding the process of transformation, and the innovation culture it requires to thrive, cannot be underplayed.

Will our organisations ever focus on genuine system change? The Net Zero and wider sustainability agenda might bring with it a shift to longer term thinking – of looking at change over a period of years , or even decades. To bring about these sorts of changes requires whole system change.

Whole system change is based on whole systems thinking, that the parts of a system are all connected and, therefore, influence each other. Rewiring this requires a commitment that few will be willing to make.

We are living in times when we need radical solutions to big problems. 

The world is , as Seth Godin said , begging us to be remarkable.

We have an opportunity to be more different, more memorable and make more change than we ever have.

Who wants to win the race to mediocrity instead?


Photo by Susan Q Yin on Unsplash

Why Do Bad Ideas Spread So Easily?

Bad ideas can spread much more easily than good ones.

And in a world of complex problems – it’s understandable why people reach for ideas that sound like easy solutions.

So it’s important to understand how bad ideas spread as you can use the same tactics to spread your good ones.

Bad ideas can spread much more easily than good ones.

Why? Well as Seth Godin has said no one truly “gets” your idea unless:
a. the first impression demands further attention (it’s interesting)
b. they already understand the foundation ideas necessary to get the new idea (it’s not overly complex)
c. they trust or respect the originator (it’s believable)

This helps explain why online ideas spread so fast as they’re often interesting, simple and believable. But none of that means that they are good.

In a world of complex problems – it’s understandable why people reach for ideas that sound like easy solutions.

In the past week the UK Government launched it’s anti-obesity strategy which includes urging GPs in England to prescribe cycling as part of a new drive to tackle obesity in response to the coronavirus pandemic.

A trial for a similar scheme in Yorkshire concluded in November 2019 with positive outcomes. More than 61 per cent of participants in the trial reported their fitness had increased and more than one-third continued to cycle regularly after the 12-week programme had concluded.

From an innovation perspective it’s a huge leap from one pilot to national roll out but the scheme has all the makings of a spreadable idea. Interesting. Simple. Believable.

Time will tell whether it solves the problem but you can almost see the knee jerk mental dots being joined: Fat people = lazy, Cycling = good and relatively cheap, Doctors = Trusted. Combine all three and we are sorted.

But of course, obesity is a complex issue and there are many interconnected reasons people may be overweight, one of which is poverty.

As Naomi Davies wrote in response to my post on constantly looking for problems “My fear is we conflate obesity with mental models of laziness and work avoidance and attack a problem that does still exist …but pushes us towards solutions that have little impact & can be harmful.”

These mental models (many of which are prejudices that we all hold) help spread ideas quickly. I reckon I could sell an idea quite easily to encourage the poor to buy bags of potatoes, or even grow their own, rather than spend money in chip shops. However the premise is deeply flawed – and would be destroyed by effective problem definition.

One other factor that helps spread a bad idea is something we have a lot of at the moment: panic.

Panic and anxiety are both born from fear, and are not necessarily bad things. Fear is the oldest survival mechanism we have, it encourages us to take action and helps us learn to avoid dangerous situations in the future through a process called negative reinforcement.

However , the short term innovative tactics we saw in the early days of the pandemic like getting people to work from home, changing medical and care practice at short notice, cannot be used to solve complex problems that require deeper consideration, evidence and testing.

These logical ideas are slowed by taking the time to process evaluate and reevaluate. Emotional responses are immediate and not slowed by thought. Right now a lot of our companies are super high on emotion and low on logic. We don’t like living with uncertainty so we rush to solutions – manna from heaven for the spread of bad ideas.

The notion that good ideas automatically trump bad ideas is totally untrue.

So it’s important to understand how bad ideas spread as you can use the same tactics to spread your good ideas.

  • Make your idea interesting – what is the problem it’s solving and how and why are people’s lives going to be better or easier as a result? This should certainly not be a report more like something that would fit on Twitter. It should demand further attention.
  • Make it as simple as possible to understand – or build it upon things people are already familiar with. If your idea is about helping tackle climate change or sustainability for example – most people have a basic grasp of this issue. Use a picture of that turtle with a plastic straw up its nose and everybody gets it.
  • Make it believable so consider who pitches the idea. It needs to be the most trusted or passionate person you can find. Put your ego aside – it doesn’t have to be you.
  • Don’t panic. Dumbed-down emotional ideas spread faster than logical ideas, but bad ideas crowd out the good. Do you want your company working on loads of ideas or a couple of really great ones?

Never underestimate ideas. The health of our society and that of future generations depends on us all making ill-conceived, bad or just plain stupid ideas unfit for those who spread them.


Photo by Franki Chamaki on Unsplash

Does Benchmarking Really Save Companies From Failure?

Even in the very best organisations, bad practice is waiting just around the corner.

In 2014 General Motors began the recall of the Chevrolet Cobalt which would ultimately affect nearly 30 million cars worldwide.

The problem was with the ignition switch which could shut off the car while it was being driven, disabling power steering, power brakes – and, crucially, the airbag.

The issue had been known to GM employees for a decade. A sixteen-year-old girl had died in a frontal crash in 2005, the first death attributed to the defective switches.

A redesign of the ignition switch went into vehicles a year later, but a simple mistake – the engineers failed to alter the serial number – made the change difficult to track later.

Ultimately the flaw would kill 124 people, and seriously injure 275 others.  Not recalling the vehicles sooner was deemed affordable in the pursuit of profit.

During this time, General Motors was leading its sector in customer satisfaction. At the same time as their cars were devastating families, they were picking up heaps of industry awards.

It’s common after the emergence of any scandal, be it VW, Oxfam, Mid Staffordshire, for us to call for tighter regulation, greater consumer controls, and transparency of performance.

But does any of this help prevent complex system failure?

The latest call is from the Social Housing Green Paper which has been published in response to the Grenfell tragedy and has been billed as a “fundamental rethink” of the system.

The government has suggested the introduction of new league tables, which would effectively name and shame landlords to highlight bad practice. The ‘power’ would shift more towards tenants and enable them to see how their landlord ranked compared with the average.

There’s also been talk of an industry wide Charter and an increasing focus on benchmarking.

Can You Benchmark Your Way Out Of A Crisis? 

Best practice and benchmarking are often just a race to be first at being average. The chances of someone else’s best practice working in a different environment is unlikely.

Not only is it unlikely but the very act of best practice and benchmarking can drive standards down. It encourages all organisations to think alike. At sector level it creates groupthink, and we all know groupthink is the avowed enemy of innovation.

Within organisations, a culture of following best practice can quickly become a culture that is frightened of doing new things. In times when we need radical solutions to big problems – trying to be more like each other is a criminal waste of time.

When Good Companies Go Bad

It’s tempting to think that tighter regulation and scrutiny prevents system failure but there’s little actual evidence it does.

There’s a problem with managing risk retrospectively: you’re always looking behind you, and often looking in the wrong places.

F1507A_IW_LOOKINGFORRISK

This graphic from a HBR study shows auditors are rarely looking at things that could bring companies down.  Policies don’t destroy companies, toxic cultures do. But cultures are rarely audited as it’s pretty much impossible to do – it’s easier to tick boxes.

When things go wrong in organisations it’s often the result of a complex web of perverse incentives, simple mistakes and a culture of people looking the other way.

It’s almost never because there’s a singular Bond villain type saying “I’m going to do this on the cheap even though it’s bad for customers and will probably kill folk”.

Redefining Trust In A Digital Age

There’s rarely a simple solution to complex problems but I see a huge opportunity for companies to rebuild relationships around principles of trust and transparency – and this won’t be achieved by charters and following a herd like regression to the mean.

The network effect of technology has created a way for people to share experiences more quickly, and to more people with more detailed information than ever before.

Today, any customer can go behind an organisation’s flattering customer satisfaction scores with a simple Google search.

To rebuild trust organisations must adopt new behaviours to reduce the gap between organisational rhetoric and the reality.

At Bromford that means pushing ourselves ever more local and away from the corporate centre – building relationships based on openness, respect, and accountability.

  • It means abandoning paternalism and the ‘we know best’ culture that has dogged the social sector for generations.
  • It means creating a culture where people do the right thing for the customer and call out inconsistent behaviours regardless of hierarchy.
  • It means establishing trust building as the number one goal, rather than the relentless pursuit of efficiency and profit.

I’m pretty sure General Motors, VW, and Oxfam would have been near the top of any industry league table.

You can’t regulate relationships and you don’t build trust with a Charter.

The market is , as Seth Godin said , begging us to be remarkable.

Who wants to win the race to mediocrity anyway?

Best Practice, Benchmarking and the Race to Mediocrity

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We must be different. We must be lopsided. No more herdlike regression toward the mean – we must find the things at which we’re great, and build on those – Tim Kastelle

A few years ago my organisation adopted a new way of working. We implemented it , with the help of consultants, as it had achieved glowing praise during a regulatory inspection at a similar organisation.

It was held up as an example of that most intangible of things: best practice.

We all had lots of meetings about it. We all had training. And we all did a lot of work to prepare for the arrival of this system that promised to change the way we worked forever.

You can probably guess what happened next.

Nothing changed.

In fact I don’t think I ever used it. Not once.

The problem with buying in solutions that have performed brilliantly in other organisations is that most of the time, they just don’t work.

That’s not to say they never worked. They may well have worked for somebody else, somewhere else. They may well have worked at another time. But it’s highly unlikely that you’ll be able to just port successful practice from one place to the next. 

The public sector predilection for best practice and benchmarking is quite perverse when you think about it.

  • Imagine starting up a new business and the first thing you decide to do is figure out who is operating in a similar space as yourself.
  • Having found them you both start a club and invite others, who are also like you.
  • Then you all start comparing your practices, processes and results and eventually work out who’s the best.
  • Then you copy them.

That’s absolutely not the route to greatness.

If everyone strives to do the same thing the same way, they will end up close to average.

Best practice and benchmarking are just a race to be first at being average. 

A quick caveat: best practice can work in some scenarios. Usually very simple repeatable ones. Chris Bolton points this out in his excellent post, but goes on to say, “The chances of someone else’s best practice working  in your complex environment (particularly if it is forced onto you) seems unlikely.”

Not only is it unlikely but the very act of best practice and benchmarking can drive standards down. It encourages all organisations to think alike. At sector level it creates groupthink , and we all know groupthink is the avowed enemy of innovation.

Within organisations a culture of following best practice can quickly become a culture that is frightened of doing new things.

I’ve heard many in my own sector say “We aren’t brave enough to do the things that (insert someone innovative) are doing, we’d rather watch and learn.”

This is a terrible mistake.

If you watch them and they fail – they have all the learning and you have none.

And if they succeed it means you have failed to keep up with them, and you still have zero learning.

Rather than regressing towards the mean let’s learn by being responsibly creative.

Try visiting lots of people who are unlike you.

The more unlike you they are the more you should visit. Connect with people via social media who are the polar opposite of you. If you are just hanging around with the sector crowd you will become more average with every passing day.

This a slide from Creating a Culture That’s Innovation Ready showing some of the organisations that we have visited and done business with over the years.

Screen Shot 2015-01-28 at 20.14.53

We haven’t attempted to be like any of them but it has been a massive generator of new practices, ideas and possibilities. Never go away and try to copy them though , always adapt the idea to your own culture.

Try learning by doing.

Most of these ideas are best tested by adopting a safe to fail approach: small-scale experiments that approach issues from different angles.  We will always learn more by making our own mistakes than comparing each others (usually flattering) benchmarking scores.

Try being an organisation that only you can be. 

We are living in times when we need radical solutions to big problems. Trying to be like each other is a criminal waste of time.

The market is , as Seth Godin said , begging us to be remarkable.

We have an opportunity to be more different, more memorable and make more change than anyone else.

Who wants to win the race to mediocrity instead?

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