How do you maximize the performance of an organization?

 

Wait, wait…don’t tell me!

I went to business school, I know! 

 

Be A Technocrat

I learned to use reductionist analytical thinking which informs me that the performance of the organization is the sum total of the performance of each department which is in turn is the sum total of each person’s performance.  Therefore, the answer is that you have to maximize the performance of each employee.

 

How is this done? Give people objectives to work toward (preferably S.M.A.R.T goals) and rank each on their results and make getting a raise (or even possibly keeping their job) contingent upon them accomplishing the measurable objective. This is why the performance appraisal system is so essential, it is the management mechanism that affords objective control for those seeking to maximize performance. The important thing is to give everyone stretch goals so that the summation of everyone achieving his/her goal maximizes the organization’s performance.

 

Further if any one doesn’t measure up then management must rid the organization of them. No one wants losers, rank-&-yank bloodletting is the way to top performance.  The higher performing organizations are ones that rid the organization of the lowest and retain the best and brightest—everyone will be above average.

 

This is how people who haven’t an understanding of both living systems and variation, those who lack systems and statistical thinking skills, not only would answer but practice as well.

 

No Substitute for Knowledge

Those who do understand know performance is both an emergent and variable would find this answer quite laughable if it wasn’t so harmful. More to the point, organizations depend upon relationships, and their productivity is a function of the relational system, which is largely management’s responsibility.  While else do you think Deming was relentless in proclaiming that 95% of problems come from the system!

 

As illustration let’s keep it simple and assume the organization has two employees, persons A & B and a manager following a system of management practice.  Algebraically the performance of the organization P(Org) would be:

 

P(Org) = P(A) + P(B) + P(AxB) + P(MgtSystem) + P(AxMgtSystem) + P(BxMgtSystem) + P(AxBxMgtSystem) + e

 

It is important to note that performance is dependent upon both tangible and intangible factors so to make this equation a bit easier to express the intangibles (such as culture, meaning) have been subsumed into the MgtSystem term.  In other words, modeling performance in algebraic terms leads to objectifying the very human experience of work.  I am not advocating that this be done in practice; this is only for illustrative purposes in this argument.

 

Continuing, we have one equation and seven unknowns, an equation that can’t be solved for the value of any term.  If you doubt this, I suggest you check out any high school algebra text.  Yet this is exactly what is believed doable through performance appraisals.

 

So what does traditional management theory suggest as practice?  Reduce the equation!  What?  Yeah, reduce it!  Simply erase the terms you don’t want, don’t care about or don’t know how to deal with—especially those intangible touchy-feely human factors like, relationships, meaning and joy-in-work.  This leads to the following:

 

P (Org) = P(A) + P(B)

Once the messy human terms are ignored it becomes so clean and neat, it just all adds up!  Now all one need do to maximize the organization’s performance is command and control A & B to set stretch goals and attain his/her performance goals.  Voila!

 

But what happened to the influence of the system of management?  Well, it is generally assumed—as with all sources of authority—it’s the worker who performs the work and those in authority stand above it all to objectively monitor and judge or evaluate performance through the appraisal system.  So even if it is included as depicted in the following, each is independent and hence each doesn’t subtract from or impact the other—it is additive.  A’s or B’s performance is their performance irrespective of what else is happening or not happening—you’re on your own independent individualism is operative.  Hence any concern for anything else except you attaining your goal is unnecessary and unwanted.

 

P (Org) = P(A) + P(B) + P(MgtSystem)

 

Management by the numbers, holding people accountable through carrot-&-stick methods makes it all quite objectively straightforward and arithmetically simple. Any idiot can do it, and usually does!  So there you have it!

 

But in light of the simplicity of the either/or thinking with management by exception don’t you find it just astounding that so many organizations are poorly managed? Just maybe they haven’t done enough bloodletting to rid themselves of all those below average people.  Clearly there is more work to be done!

 

What’s a better approach?  Practice management with an understanding of and care for people as human beings, then apply systems thinking to understand the deep interconnections and pattern of relationships and statistical thinking to understand the variation in the effects that emerge from the system. This is critical since to understand the causes of the variation in effects an understanding of the variation caused is paramount—knowing whether the situation is a common or assignable cause situation is essential for appropriate action. By acquiring this knowledge of the system coupled with having care and concern for people, those in authority will understand the harm they inflict upon people and the organization with the continued use of the merit and performance appraisal system.