When Deming proclaimed costs are not causes he was trying to make quite obvious and clear (to those willing to listen) that focusing on outcomes is no way to manage and improve a system. Focusing on results will not cause better results; only focusing on and understanding the system of causes will lead to lasting improvement. However, in spite of the hundreds of thousands of business minded people attending his seminars, to this day management of and by outcomes (aka metrics, analytics) remains the go-to practice. I suppose Yogi Berra was right, if people don’t want to come out to the ballpark nobody is going to stop them! Continue reading
We’ve all heard in so many ways by so many that the customer is important to (our) business. Why is the customer important to business? Simply, the customer is the one who purchases the goods or services that a business sells; customers can bring profit to a business! That is to say, customers are instrumental to revenue generation that in turn can lead to profit. So all you customers out there must feel pretty important, huh? Continue reading
In spite of the persuasiveness of the business minded about both the management prowess in business and superiority of markets to serve the needs of citizens—privatize society—there are a few contradictions hidden in plain sight that we must heed.
The business minded contend competition is required for a business enterprise to innovate and/or to provide quality to its’ customers. That is to say, business leaders need to be forced to foster creativity and provide quality. The underlying assumption is that the business minded do not care enough or are responsible enough to provide the organizational environment for creativity and quality to emerge—they need to be acted upon to do the right thing.
Business leaders, at times vehemently, resist regulation claiming they don’t need someone (especially government) overseeing to ensure they conduct business in a socially responsible way. That is, they claim they are quite competent and should be trusted to conduct business responsibly—only they know what’s best—hence they don’t need others to act on them to do the right thing.
The contradiction is striking! Out of one side of their mouth business leaders say they need outside forces to do what’s right and yet out of the other side they say they don’t need outside forces to do what’s right.
What underlies this contradiction is an addiction, where profit is the substance of choice and the measure of (their) life. And as with all addictions greater and greater quantities are needed to bring satisfaction. It is this self-serving compulsion for increasing level of profit that is the basis of both arguments. Hence to them there is no contradiction—it is all the same and quite rational.
Yet another contradiction advanced by the business minded is that (free) markets are efficient and most effective, except of course when it comes to what business leaders desire. The captains of business/industry know full well their wants mustn’t be left up to the market to satisfy—markets aren’t as efficient and effective as they tout—hence their quid pro quo lobbying to fix the market in service to their particular desires.
Can the captains of business/industry be trusted to act responsibly or to provide sound guidance in the governance of society and the providing social services to citizens when the business of their business is their very own profit? Should capitalistic principles dictate the practice of democracy–a grand contradiction?
It should not be surprising that this manner of governing society is as irrational in regards to the common good as it is, given the influence profiteers have upon policy. A system—be it a society or a business enterprise—led or governed in this way is an addictive system and thus not sustainable. All addictions have the same future, thus continuing with such contradictions is self-destructive.
In an HBR Blog Network article Gianpiero Petriglieri, Associate Professor of Organizational Behavior and Director of the Management Acceleration Programme at INSEAD, spoke to the question are business schools clueless or evil? Professor Petriglieri’s answer is “business schools are neither clueless nor evil. They are—like most students that flock to their classrooms—in transition. Overtly working to improve their competence and image and covertly wrestling with questions about identity and purpose.” Continue reading
The Justice Department’s $3 billion judgment against GlaxoSmithKline for criminal actions in their marketing of prescription drugs is a minor penalty to pay relative to the tens of billions they made in the process. Chock it up to the cost of doing business! What did GlaxoSmithKline do? The business of GlaxoSmithKline involved the promotion of drugs for unapproved patient populations and for unapproved purposes and lobbying doctors to prescribe their products by offering trips, tips and other perks in return. Seemingly they don’t believe in markets. They don’t believe markets will be effective and efficient in satisfying their needs, so they interfere with it. Clearly, there is no trust in markets here! Continue reading
Doing More For Less (of us)
Getting the most out of people is not a bad thing but in the extreme it translates into squeezing the life out of them. As Deming exclaimed, “beat horses and they will run faster—for a while.” Doing more with less implies squeezing more and more out of people until they drop. Continue reading