Alchemy

There’s no such thing as alchemy.

Despite that, I have been disappointing senior managers for years by failing to produce gold out of dross.

Alchemy is still believed in, at the highest levels of organisations. There are senior managers who believe that the right combination of base ingredients, mixed in the right way, with the correct process, will produce gold. Yes, the purest gold.

 This is a metaphor of course. This blog deals in cheap metaphors and lists.  Today’s metaphor is as follows.

Senior management don’t think that actual heavy yellow gold will come from the right arrangement of crap in the right mystical process. That would be silly. Instead they very often believe that the right arrange of crappy data will produce golden knowledge with the right mystical graph. Or chart, or map, or special set of coloured symbols.

If you are lucky enough to work in performance management, then you will have regularly been asked to produce performance reports for senior management. This will disappoint them on a regular basis. It will disappoint because not matter what you do you will not, and cannot, produce the right arrangement of data on a page to unlock the secrets within. Because there are no secrets within.

In command and control organisations there is a massive disconnect between the work and decision making. Senior managers who make decisions about work are very far away from where it takes place. They will ask other people who also are very far away from the work to tell them what is happening in the work by providing them with “performance information”. These people, like me, are in a bind. They are being asked to produce something that doesn’t exist. i.e. the truth in a database. Truths are rarely in databases, but performance information is, so they are often confused.

Once taken out the database, they are tarted up with graphs, maps, performance symbols, traffic light colours. They are put into scorecards, added to risk matrices, exception reports and strategic away-day summaries. But what-ever happens to them, nothing changes. The golden knowledge is not unlocked and remains hidden. It’s not there.

Senior management get shirty. “Where’s our performance information?” they cry. “Add another column“, “make the information more strategic”, “link it to our corporate priorities”, “more maps!”.

But it doesn’t work because the secret isn’t hidden inside the performance information, and it cannot be teased out with the just the right arrangement on a page, like finding the mystical combination to the universe. You can’t find anything new in a room, no matter how prettily the data is arranged on a page. To find anything new, you’ve got to think new. Asking for the same old performance information is thinking old.

I like data, data is great. But any old data is stupid. I have had people ask me for “data”, like there is a big sack of out the back that I could rummage in and give them half a pound of in a bag. It’s not data that’s needed, it’s leadership. Without that any old data is good enough and none of it is, at the same time. Without proper leadership there can be no common shared understanding of purpose, and without purpose you can measure anything and everything.

With the right purpose, as defined by the customer, you can get the right measures.  The right measures will shine like gold even scrawled on the back of a fag packet.  The best and most useful measures I have ever seen were hurriedly brought together by staff whose work it measured. It was data not collected before, because it wasn’t centrally defined by government. It was shoved into badly coloured pie charts, crammed into badly labelled bar charts, piled into tables, all without labels telling you what it was or when it was collected. All the usual panoply of a usual useless performance report was missing. And yet, because it was truthful useful information measuring purpose, and with the intention of understanding and finding out, it was  better than gold it was the truth.

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24 Responses to Alchemy

  1. antz says:

    Thanks for the writing. It reminded me of another metaphor given by Ron Reinertsen at LSSC 2012: those hands-off managers are like those who sit in the baby car-seat (management post) of a vehicle (organization) with an imaginary steering wheel. Some of these managers are actually know the disconnection between their steering and the actual guidance to the moving vehicle (prospers of the organization) and they keep quite doing what they do; others think themselves are important in what they do to provide leadership, so from time to time they abuse their power with disruptions to the moving of the vehicles.

  2. antz says:

    Now I understand your point of “effectiveness trumps efficiency every-time: systems thinking, vanguard method & deming”. It is so true that effectiveness is the foremost thing before anything else, such as efficiency, can be considered, I must take back my previous comment on the slogan. Thanks again for your insightful analysis with this analogy, Alchemy.

  3. Another great post, right up until you mentioned the word Leadership. I’ve come to believe the myth of leadership as a magic bullet is part of the problem, not of the solution. Let’s all work together on building the effective organisation and thereby, success and wellbeing. See my recent post “Fellowship” for more depth.

    - Bob

    • ThinkPurpose says:

      To be clear, I’ve seen enough examples of “the great leader” to have been disabused of the notion quite a while ago.

      But I do believe in the function of “leadership”, a verb. But it arises out of a situation, it doesn’t arise out of exercise of office. “Dispersed leadership” is apparently what it is called, where it is a description of an event, when the situation is such that a person, or more than one person, is identified as a leader for that occasion when they [jargon alert] sense-make and path find. It can happen any time, from any person. It is a function of the context, the leader is identified because people act as if they are because they follow on that occasion. You can spot the leader because you can spot the “followers”.
      This is something I have seen my 8 year old do, with grown-ups, it isn’t a “trait” that is possessed but an event that emerges from within a group, and when the situation changes again the event dies down too. It certainly happens in the Fellowship of the Rings on many occasions.

      • I agree with all your comment (how could I not?) :) I’m just suggesting that the term “leadership” has acquired too much baggage and can itself lead (sic) folks into dysfunctional assumptions and behaviours.

  4. Anonymous says:

    I am not sure if you have come across Lean. If not, it may be relevant to your topic.

    Lean strips everything down to its bare essentials. Lean can be applied to performance reports too, which should be capable of being read and understood by anybody very quickly. Obviously visual displays are going to help in achieving this.

    But more that this, the displays should show target performance against actual performance. Nothing more. Anything else is irrelevant. Gaps between target and actual can them be investigated and the cause of the gap identified. Action can then be taken to eradicate the cause.

    Such a methodology can be applied to performance reports at all levels of an organisation, including at senior level. If senior management want strategic reports then the performance reports will need to plot actual performance against strategic targets. For each strategic target there should be one graph. Perhaps only 6 graphs will be needed to satiate senior management’s appetite.

  5. Anonymous says:

    As an addendum to my previous post, I have experienced similar issues with senior management. The truth is they did not know what they wanted.

    I think the best you can do is to ascertain their strategic targets. These targets should be SMART. If they are not then perhaps you should make them so. Then you need to put procedures in place to collect relevant data about actual performance in respect to the targets. Then prepare graphs. A horizontal line can be used to represent the target. Bars can be used to represent actual performance month by month. Bars above the line represent achievement of target. Bars below the line represent failure to achieve. Gaps should be investigated and measures taken to address the failures.

    Such a stark presentation enables them (and everyone else) to see immediately whether strategic targets are being achieved. No ifs, no buts. It is this stark reporting that should trigger appropriate corrective measures. Any measures that do not address the gap between actual and target is superfluous.

  6. I don’t think lean is relevant here. Lean does nothing to challenge the thinking that creates rubbish performance reports. It’s management thinking that needs to change. Lean can be applied to performance reports, yes. But you just get the same junk in a different format. Why make junk SMART and visible? The answer isn’t to tidy up the junk. There is no right way to do the wrong thing. The answer is the right purpose (as defined by the customer) and the right measures. Lean won’t take you there.

    • Anonymous says:

      Lean does challenge management thinking. With Lean, much traditional management thinking is thrown out of the window. That is why performance reporting under Lean is different. I don’t see how reporting actual performance against target performance can be dismissed as “tidying up the junk”

      As for customers, yes you are right. But are not senior managers internal customers from the viewpoint of the blogger?

  7. I’d be interested to know how you think lean changes traditional management thinking. From my experience, lean neat fits neatly into existing management thinking. It doesn’t challenge the traditional design of top down hierarchy, functional specialisms and procedures, a contractual attitude to suppliers and customers, decision making seperated from the work, outputs, arbiary numerical targets, standards, an obsession with cost and budgets and the assumption that motivation is entrinsic. People love lean because it’s all tools, tools, tools. Lean is easy because you don’t have to fundamentally change the way you think. You just have to add a few bits and pieces. Alongside Prince 2, EFQM, ISO9001, it’s just one more tool in the box.

    For management thinking to change, managers have to study demand and go through a normative learning experience. They have to see what is really going on in the work and be desperate and humble enough to change their fundamental beliefs about management. This is systems thinking.

    • Anonymous says:

      Many traditional management tools are rejected by Lean.

      For example, Lean says zero (or close to zero) inventories. Traditional management tools rely on EOQ models. This is pretty fundamental because production or service delivery is only triggered in response to a customer’s demand. It’s a pull systems as distinct from the traditional push system. A zero stock philosophy also requires “one piece flow” so that there is no (or very little) work in progress waiting in a queue between operations.

      As regards procedures and documentation, Lean insists on simplifying these. No wordy documents, just standard operating procedures, perhaps taking the form of an assembly diagram.

      Lean emphasises the importance of managers “going to see the problem”. I think it’s called Gemba which is the Japanese word for it but I would agree that using such words can be pretentious. I have always resisted adopting the Japanese lexicon because it risks turning Lean into something akin to a religious sect (eg Zen).

      Lean employs a very powerful but simple problem solving methodology which is universal in its application throughout all levels of an organisation. Lean defines a problem as the gap between what should have happened (the target or the standard) and what actually did happen. This can also be used as the basis for performance measurement. When gaps between standard and actual arise then investigation and correction should take place. I am sure you are aware of the PDCA cycle that models this process..

      Problem solving is not the domain of a separate department containing experts. Problems are solved by front line staff usually in teams using the methodology described above.

      I believe Lean, if it is adopted correctly (not very likely in many UK organisations, I grant you), makes for flatter organisations, more empowered, motivated and satisfied employees. It should also restore the psychological contract between employer and employee (ie job security) which has been eroded over the last 30 years.

  8. Anonymous says:

    @thinkpurpose

    Of course the writer of the piece you referred me to is correct. However, even with the year’s data it is not known whether the data convey a good or a bad story. Only by comparing the time series with a standard or a target can we know that.

    • ThinkPurpose says:

      I would suggest that there is no such thing as a good story or a bad story.
      There is the purpose of the system, the measure is derived from that, and then the right data in a control chart would show how well the system is performing according to that measure. But whether it is a “good” or a “bad” story, that’s a judgement call. Yes, I am familiar with lean, the fifth principle of which is to pursue perfection for-ever. That’s the only target, measures in charts showing over time how close the system is to achieving that.
      If these measures in the relevant type of chart are stimulating different and better questions then great. They are working. If they are working, then I would suggest that is a good story. If they cause people to look at a graph and allocate whether that is “good” or “bad” then they are not working and that’s a bad story

      • Anonymous says:

        When I did an internal audit on our Finance department, I prepared a graph showing the time to process a purchase invoice from its receipt through to its payment. Had that department not had a performance standard (one working day) then the graph, which covered the last 12 months, would not have conveyed much. Nor would my audit have been very useful.

        As it turned out, I was able to plot the monthly time series against the target (shown as a horizontal line) and although there was a small amount of random fluctuation around the target it was apparent that the department was performing as required. Without the target being plotted the graph would have been much less useful, maybe even useless. The Finance director simply wanted to know whether the process was working to his expectations. The graph communicated the story to him in seconds. Had the process not been working as planned (ie to the standard), then an investigation would have ensued and the cause of the problem identified and eradicated.

        Lean does not really see the need for elaborate control charts because variation is perceived to be a bad thing. That said, the use of a control chart does actually confirm that a single data series is not enough – it must have a comparator series (the control limits). However, Lean would typically see the use of control charts as over-engineering.

        The moral of the story as far as I am concerned is that every process must have a meaningful performance measure. Otherwise it is impossible to measure and report on its performance. Some departments in my organisation do not have meaningful performance measures. This makes them very difficult to audit, to report on, and to make improvements. To me, the target or standard, is essential to performance reporting. Without one, it is pointless.

      • ThinkPurpose says:

        Have you read any accounts of organisations that have “gone systems thinking” and amongst other things dropped numerical targets?
        They don’t do it because they are told to, but because they learn for themselves how targets have negatively affected the way they work and consequent performance. I am not going to try and persuade you of the universal correctness of this but am interested if you have read these stories and if so what your thoughts are.

  9. Anonymous says:

    No, I haven’t read them but I will try to. I was unaware that there was such an approach. i will try to get back to you once I have read the articles.

    • ThinkPurpose says:

      I’ve got loads stored, will email some your way when I find them. I have your email address.
      There’s a really good book came out few months ago about different places that changed the way they did things including police forces, fire brigade, council and health services. Called Systems Thinking case studies volume 2. It is about a specific method but each bit has been written by the actual staff involved so it’s not some puff-piece. Feels authentic.

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  11. James says:

    Pitching in, here’s a link to a really interesting paper about the effects of targets on public services, entitled:
    On Target?—Public Sector Performance Management: Recurrent Themes, Consequences and Questions, by Simon Guilfoyle

    http://policing.oxfordjournals.org/content/early/2012/02/07/police.pas001.short?rss=1

    Google that title fi the link doesn’t work.
    Anonymous said: I don’t see how reporting actual performance against target performance can be dismissed as “tidying up the junk”

    I’d say you could be ‘tidying up the junk’ if the assumptions of the original target remain unquestioned.
    Plans and forecasts are useful if they help you to deal with real work. But assuming things have gone wrong because real performance isn’t the same as planned performance misses the point of the plan. It can be like seeing that someone brought an umberrella on a rainy day, and then criticising them for doing so because the forecast said it would be sunny.

    • Anonymous says:

      @James

      Your point about targets and standards is taken account of in the PDCA cycle.

      The P stands for Plan, which is the setting of standards and targets (not forecasts, which are statements about uncontrollable events).

      The D stands for Do which this the execution of the work.

      The C stands for Check. Here the work is checked against the standard or target to ascertain whether the work was performed to standard.

      The A stands for Adjust. This is where either the standards/targets are adjusted because they are wrong or the performance is corrected so that standard is achieved.

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