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October 29, 2005

The Future of Change

Author and management practices educator Sid Kemp posed a question of whether production quality really drives financial success. Due to competition, we can assume that not having quality might prevent success, but does having quality "cause" it? If not, then what is the rationale for the expense and intensity of continuous quality improvement, a competency-based change program? After all, if change is the only business constant, how does continuous improvement apply to the agility needed to compete? The easy answer is to continuously improve agility. The hard answer is to determine what that means and make it work.

Asked Sid, "a question came up while I was thinking about quality management and reading up about Japan -- famous for quality but ailing economically despite that. What kinds of focus, what changes, could we say will be *beneficial* for the next ten years, even if we don't know what we will be producing?"

On the one hand, a 10-year forecast is not so easy. China will be the most powerful country in the world but we don't know whether it will be good for just them or good for everyone. Certainly the U.S. is the only precedent, and the jury remains out on the subject of our "goodness". Nonetheless, since the climate change, the globalization of politics, and the information-economics revolution are all upon us, it stands to reason that we need more clairvoyance and more security without creating more divisiveness. The more we can find good reasons to cooperate with each other, the better off we will all be. The age of Win-Win is now or never, and its implications certainly mean at least a first step of "enlightened self-interest". The biggest threat is "the telling of lies". It will be interesting to see if the practice of education can evolve towards a focus on Win-Win awareness.

But Sid posed the challenge in particular: deciding Beneficial Focus and Beneficial Changes vs. the uncertainty of future market requirements and product/service categories. The issue calls for considering the relationship between performance management and value management.

First, we define "beneficial". It has several flavors. But if we assume above all that we intend to keep our professional operations self-supporting (for continuity) and attractive (for growth), then we can work from the general notion that "beneficial" things are things helping us to achieve those two goals.

Then we break it down into the supply and demand issues that pertain to both goals.

FOCUS:
On the supply side, there are aspects related to our being Producers and Providers. We use and build the environment and the items in it.
- We should be good at doing that, as in being mindful of our intent and relevance in our time and place, so the perspective is one of Competencies.

On the demand side there are aspects of our being Partners/Community Members (collective) and Stakeholders (individual). We receive and are affected by the output of our acts and the acts of others.
- We should meet the requirements of our relationships, and meet the needs of being individuals, so the perspective is our Responsibilities.

In the picture below, we see how Competency and Responsibilities cross-reference, creating four focal areas: Ethics, Values, Roles and Missions.

Ethics: intent vs. requirements (sets position within a quality network. We used to say "chain" instead of "network" but we now know better. Quality network includes legal, cultural, industrial and other institutional players, reflecting regulations, norms, practices, etc.)

Values: intent vs. needs (sets position within a demand network)

Roles: relevance vs. requirements (sets position within a supply network)

Missions: relevance vs. needs (sets position within what we've usually called a value network)

So the idea would be to map attention to those four issues against the two goals:
(1.) keeping our operations self-supporting; and,
(2.) keeping our impact attractive.
This 8-part mapping creates a model for defining "the way we want to be."

As an exercise, I began assigning big company names to the four focal points, as examples of companies that promoted the issue or violated the issue. For example, Enron clearly violated the Ethics issue; Phillip Morris's marketing wants us to believe that it is promoting the Ethics issue; and a company that send free AIDS drugs to Africa is definitely promoting it. Dell is a master promoter in the Mission area; WalMart is a promoter in the Roles area but a violator in the Ethics area. Disney is a master promoter in Roles. Ford Foundation is a master promoter in the Values area. Microsoft violated Ethics but promoted Roles and wants to be seen as a Value promoter. Etc.


CHANGES:
There will be changes that are intended or unintended, and needed or not needed. So, there are four basic types of change:
- intended & needed (e.g. goal fulfillment)
- intended & not needed (e.g. innovation)
- unintended & needed (e.g. luck)
- unintended & not needed (e.g. discovery)

These four types of change can occur within any of the four Focal Areas. So, the 4x4 cross-referencing here gives 16 points of change. Across the possible changes, our overall question remains "which ones should we expect, and which should be prioritized?"

We can only make educated guesses as to which cases of the resulting 16 kinds of changes will emphatically occur and be "critical"... With enough information we could start working out our guesses the same way meteorologists work out forecasts. This tells us right away how intensive and daunting the effort would be.

So the challenge will be generally like this:
1. Understand where (and why) we want to be positioned in terms of the four "focal areas"
2. Master an ability to monitor responsibilities and detect trends that are relevant to the scale of our operations
3. Master an ability to rapidly acquire and deploy effective knowledge (not just data or info) for building competencies that will support and align the desired positions

In the end, there will be some emotional maturity required, to keep a grip on the idea that something helping you reach a goal is Beneficial even if its immediate consequences involve some pain or don't offer gratification. And furthermore, just because something is beneficial doesn't mean you're going to reach your goal; instead, you proceed with the idea that you won't reach your goal without the benefits. Finally, gratification and benefit are not the same thing, and there may be many gratifications (planned or unplanned) that occur but should not be confused with benefit. As I admitted to Sid, I love martinis, but they're bad for the brain cells and the liver.

Posted by Malcolm Ryder at October 29, 2005 8:12 AM

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