Simon Terry has written a couple of great posts lately, this and this, which have got me thinking about the way companies are organised and what can be done to improve performance. Specifically, this paragraph got me thinking.
In an era of rapid change and high levels of connectedness, what matters is not an individual’s stock of knowledge. The value of an individual stock of knowledge is falling as new knowledge is being created fast, search costs are reduced and there is an increasing focus on collaborative knowledge work.
Individuals are important in organisation life, obviously. We are the ones that do the work, that have and gather knowledge, and generally keep the wheels of enterprise turning. The skills that people have, however, may not be as important as has always been thought when it comes to improving performance. W. Edwards Deming, the chap that is credited with the Total Quality Management (TQM) philosophy, had a unique way of looking at the power of a system over the people that are within it.
The Appreciation of a system involves understanding how interactions (i.e., feedback) between the elements of a system can result in internal restrictions that force the system to behave as a single organism that automatically seeks a steady state. It is this steady state that determines the output of the system rather than the individual elements. Thus it is the structure of the organization rather than the employees, alone, which holds the key to improving the quality of output.
What I love the above statement, is the idea of the steady state. This is, essentially, the performance that an organisation is built to deliver. Things do tend to automatically refer back to a certain pace, or certain hum, at work. I’ve felt this, and I’m willing to bet you have too. People refer back to this, because it’s how work is done in the organisation. It’s the way things happen, and the way things are achieved. It’s the culture of a place.
If you’re looking to improve the performance of something, then this piece and others like it seem to indicate that training or getting better people won’t make much difference. People will perform in the way that the system in which they’ve been placed encourages them to.
The Squiggly Line 
In base economic terms the “system’ also determines how many people you need to support it. The history of company reorganisations, particularly large companies and government organisations, is affected by new technology that requires less people to maintain it to produce a certain level of goods and services. The system changes often evolve slowly and it can take management a while to determine the over staffing. The staff retrenchments that result are of course never pleasant but in time the organisation settles and the steady state continues..
Thanks Doug! Is there a way to avoid that cycle of technology replacing people, and then people being removed?
“People will perform in the way that the system in which they’ve been placed encourages them to.” … indeed I’d go so far to say a team or organisation is perfectly designed to deliver the outcomes that it’s experiencing. ie. if things are dysfunctional or below par, thats the natural outcome of the current state of the system. The natural consequence is that if we want/need to achieve different outcomes we need to tweak the system.
Agreed, Derek. I especially like the focus on making said tweaks to a system. I think a good system actually constantly tweaks itself 🙂