Picking Winners

Picking Winners

Sadly, most organizations plod along with the same chronic problems, year after year, decade after decade, from one CEO to another. Problems such as these generate daily misery for workers and trouble for all other stakeholders:

  • Poor or slow decision-making
  • Low employee engagement
  • Organizational dysfunction
  • Cutthroat corporate culture
  • Poor at preventing problems (but great at reacting to problems)
  • Cost more important than safety
  • Delivery more important than quality
  • Company more important than customer
  • Waste, unevenness, and unreasonableness

Why are most CEOs averse to fixing these and other chronic problems?

Business is competitive, often making use of sports and war analogies, and so leaders’ focus is easily turn towards enemies or rivals that must be vanquished. Leaders need enemies to defeat and are uninterested in solving chronic problems because they have no easy solution — at least that is their preconception, no easy solution. So why bother trying?

The leaders of organizations believe they must appear in control (another preconception), and to them chronic problems are like an ever-present low- grade bacterial infection or omnipresent mild virus with no easy cure. What CEOs cherish most is the freedom to pick which problems to work on, and so they pick the problems that are most likely to be winners and thus make them look like winners. The last thing leaders want to do, having won the grand prize of becoming president or CEO, is pick problems that are losers and become associated with losing. The winning streak must continue at all costs despite any trouble that it causes for others, and so problems that have the odor of losing are to be avoided.

That includes Lean transformation.

A “war” on waste, unevenness, and unreasonableness is not winnable because it is impossible to achieve zero waste, unevenness, and unreasonableness. But a “war” against the competition (or customers or suppliers) is winnable. These are the problems that leaders pick to solve. They are the winning problems, which I presented in my book, The Triumph of Classical Management Over Lean Management, as the “CEOs Wealth Creation Playbook” (Table 1-2, page 34).

Lean management restricts CEOs freedom to pick winners. The facts that Lean exposes show the extent to which the company is losing on the “battlefield” — the genba, loaded with massive amounts of waste, unevenness, and unreasonableness. But even more troubling is that fact that CEOs lose their freedom to respond to problems in ad hoc or discretionary ways. With Lean management, CEOs must adhere to particular learned ways of thinking and doing things. This robs CEOs of their ability to give orders (command) and appear as a genius or bold hero in the eyes of peers, investors, and the press (control). Few CEOs will subject themselves to such indignity.

A CEO who admits the existence of massive amounts of waste, unevenness, and unreasonableness faces more than embarrassment. It directly challenges their power and authority and intrinsically makes them the loser for agreeing to lead such a shabby and inglorious organization. Rather than seeing Lean management as an opportunity to eliminate waste, unevenness, and unreasonableness, it is a curse to avoid; an enemy that cannot be defeated in three to five years. Victory is unachievable, so the only possible outcome is losing.

This does not preclude the uptake, in limited ways, of certain popular Lean methods and tools in organizations, which we know is widespread in corporations. But we also know that their use is almost always restricted to people at lower levels in the organization to improve the efficiency of certain processes in an otherwise classically managed organization. Most CEOs are bonded together by the viewpoint that this limited use of Lean by the people at the bottom of the organization may produce some useful benefits without exposing them, in any way, to the dishonor and disrespect that comes from losing. By doing so, they protect the institution of leadership and invigorate and extend the existence of classical management, both of which are seen by CEOs as instrumental to economic progress. That’s a big win.

Note: One can also say that because of the need for a predetermined outcome (winning), and due to social pressure for said outcome, a free market for management ideas does not exist. Hence, as we routinely observe, most efforts to transform organizations fail and certain remnants (methods and tools) become subsumed into classical management practice to help assure the status quo, thus delaying efforts to make the world a better place.

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