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| In the book titled Re-Creating the Corporation, Ackoff uses a powerfully brilliant analogy to define the meaning of system. As part of a thought-experiment, Ackoff asks his reader to imagine that in the reader's garage there exists the best-in-class of every automobile-part ever created. The best engine, the best transmission, the best wheels, tires, etc, all are cleaned, labeled, and neatly arranged on the floor of the garage, suggests Ackoff as he prepares his reader for the Socratic question of the millennium: | ||||||
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"Do you have a car?" asks Ackoff. |
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| Clearly, as Ackoff observes immediately, the answer is no. The reader does not have a car, Ackoff explains, because a car is a system. A system is defined not by its parts, continues Ackoff, but by the manner in which those parts interact with each other. | ||||||
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| In the book titled The Measurement Nightmare, Smith observes that conflicts are clear evidence that many measurements are inappropriate, within businesses. As Smith explains, a conflict exists whenever a worker or a manager must choose between, a) doing that, which the individual knows to be in the best interest of the business, and b) doing that, which maintains some measurement at values that upper management requires. | ||||||
| Occasionally, individuals resolve such conflicts by opting to do what's best for the business, even if their choices compromise some measurements and subsequently put the individuals and their immediate organizations at risk of punitive responses from upper management. However, not all managers and workers behave quite so courageously, nor does any manager or worker behave so courageously every time that such a conflict surfaces. For reasons that extend beyond the scope of this piece, when they face such a conflict, most individuals forgo what's best for the business, and instead they comply with upper management's measurements. Therefore, Smith suggests, we can conclude that those measurements, which create conflicts for managers and workers, actually limit performance and ought not be used. Rather, such inappropriate measurements should be replaced with the correct measurements. | ||||||
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| When upper management monitors measurements, it does so, because the measurements bear information regarding the degrees to which the corresponding jobs are being fulfilled. Upper management correctly perceives the corresponding jobs as necessary and properly defines these in a manner that enables the jobs to sustain the performance of the business at desired levels. When upper management monitors inappropriate measurements, it does so, again, because the measurements bear information regarding the degrees to which the corresponding jobs are being fulfilled. Upper management correctly perceives these jobs as necessary as well. | ||||||
| However, any measurement, which upper management monitors, also defines the allowable interactions, between the corresponding job and the remaining jobs within the business. The workers, the managers, the groups, the departments, and the divisions of a business are the parts that make up the many systems of people, within the business. By defining the interactions that are allowable among the various jobs, each combination of measurements, which upper management chooses to monitor, fuses the various parts into systems with unique designs; the degrees to which the resulting systems operate effectively are determined by the degree to which upper management is aware of the appropriate interactions among the affected jobs, at the time that upper management chooses which combination of measurements to monitor. | ||||||
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| Further, upper management, who chooses the combination of measurements for which others are to be held accountable, determines also the organizational structure of a business. In doing so, upper management codifies the designs of the systems of people, which it creates with its choices of measurements. Consequently, not only do the resulting systems of people perform exactly as upper management designs them to perform, but they do so sustainably, indefinitely, even irrevocably. The resulting systems and their limited performance persist every bit as long as the organizational chart of the corresponding business persists. | ||||||
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Of all the programs that businesses have
undertaken to
improve their performance, such as the
Total Quality Management programs of the
1980s, the Business Process
Reengineering programs and the Six Sigma
programs of the 1990s, the Theory of
Constraints programs and the Lean Six
Sigma programs of the 2000s, many have
yielded degrees of improvement that
could be believed only by those directly
involved. However, none of these
programs has altered the organizational
structure of any business, so far as I
can tell. Consequently, the
measurements, the corresponding designs
of the people-systems, and the mediocre
performance of the latter, all have
persisted, codified permanently in the
unchanging organizational structures of
their businesses.
Show me anyone, who claims that performance is not sustainable, and I'll show him all the businesses that have sustained their mediocre performance for decades. |
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| Ackoff, Russell L., Re-Creating the Corporation - A Design of Organizations for the 21st Century. New York: Oxford University Press, 1999. Amazon e-book format (the e-book format uses location-pointers for reference), accessed April 2009. <back> | ||||||
| Smith, Debra, The Measurement Nightmare: how the theory of constraints can resolve conflicting strategies, policies, and measures. CRC Press, 2000. <back> | ||||||
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