The Great Waste - The Underutilization of Human Potential

Arguable one of the greatest wastes in corporations past and present is the gross underutilization of people’s talents skills and knowledge.  In our knowledge-based economy, effectively developing and applying intellectual capital is the key to creating value.  This waste of intellectual capital of tacit knowledge is what I call the Great Waste.  Of all the types of lean waste this waste likely has the largest economical and social cost.

Turf wars, politics, red tape, budget nepotism, envy, ego, greed, cronyism, short-term thinking, and rapid changes in strategic direction for no apparent reason must be removed from the culture and replaced with the fuel, the tools, the resources, and the attitudes that drive the innovative process. Any organization, whether a for-profit business, a nonprofit organization, a government agency, or an academic institution, that has a culture where there is a direct or indirect, explicit or implicit, stated or whispered vested interest in keeping things exactly the same to produce continuity and to win the elusive prize of job security will surely die a slow death and will never be a place where creativity is cherished or innovation is harvested.

Cultures of innovation are places where creativity is celebrated, rewarded, and cherished at all levels in the organization. When teams are truly inspired and passionate about their work, they are much more likely to discover and to dream without the fear of “extra effort” or discretionary time (e.g., time and effort expended in the workplace beyond what is typically expected) that innovation can flourish and valuable crops can grow.

We've all heard stories about people leaving organizations who didn't value them.  The concept that people don't leave companies as much as they leave their bosses often rings true in most separations. This is unfortunate for many reason.  Particularly troubling to me is the lack of value placed in employee's tacit knowledge.  For example Below is a post I read several days back from an employee leaving a particular firm.  

"After 10 years, Today is my final day at XYZ Company! I honestly thought I would retire from XYZ but the past year has been less than easy. All in all, I'm just sad! Sad that things weren't handled differently, sad that a job I truly loved has become so hard to even get out of bed and want to come to, sad that no manager will ever hold a candle to the one I've already had, sad that my mom devoted her entire career to one company that has crumbled without her, sad that the close net family environment we had has disbursed into all different directions, and sad that power and greed made some people I trusted show their true ugly colors! As I move on to a new adventure, I choose to remember the good times and the amazing people XYZ brought into my life. We have shared way to many laughs and tears, attended each others weddings and showers and have watched our children grow. We have celebrated birthdays (dancing on pianos), supported each other through marathons, retirements and divorces. Through cancer treatments, pregnancies, surgeries and deaths. We were a family! I have been blessed to work with my mom, my sister, my best friend, and with the many other life long friends I have met through work. I will miss seeing so many of you day in and day out... Please stay in touch!"

This is a post from someone who loved his company.  Someone who figuratively considered his co-workers his family.  So much so that he recalls personal outside of work events that showed his commitment to this firm and his family.  What was his potential?  What could have brought to the firm had he been fully allowed to provide his value.  Granted there are two sides to a story but anytime an employee with this type of commitment leaves it's a failure of the firm.  Why did this employee not have the opportunity to be fully engaged?  What customer value is now forever lost because of the inability for this employee to be engaged?

There is a world of difference between doing a job and wanting to do a good job. There is a world of difference between wanting to do a good job and really putting your back into it. There is another world of difference between hard work and dedicated hearts and minds. Do you want people to go the extra mile in your company? Do you want them engaged in their work , putting their heart and soul into what they are doing, dedicating themselves to the success of the operation, and making a strong commitment to achieving the best results possible? If your answer to those questions is ‘yes’, then let’s ask what are you, and what is your organization , doing to make people want to do that bit more. What does your leadership do to capture their hearts and minds?

The problem according to the book Employee Engagement and the Failure of Leadership is that "anything resembling employee engagement is rare. In a 2008/ 9 study of 600 UK organisations 8 , the Work Foundation found that: 49% found sickness and absenteeism an issue 33% had problems with staff retention 33% felt staff underperformed 25% experienced ‘presenteeism’ - de-motivated uninterested staff A 2008 Gallup study found 9 that only 29% of US employees could be said to be engaged while 17% are actively disengaged. The 2009 Ipsos Loyalty Study found 10 less than 30 % of US employees to be loyal to their company while even fewer thought their employer deserved any loyalty." West, David (2012-03-15). Employee Engagement and the Failure of Leadership

It is not that people don't want to get involved. A few employees no doubt have no interest in whatever they do but the great majority are anxious to believe in what they spend a rather large slice of their lives doing. The issue is that management just makes it so difficult. Senior management, in particular, has become one of the major factors hindering employee engagement. Senior managers appear to inhabit a different world.

As Drucker argues in Management Challenges for the 21st Century 132 "Knowledge worker productivity is the biggest of the 21st century management challenges. In developed countries it is their first survival requirement. In no other way can the developed countries hope to maintain themselves, let alone maintain their leadership and their standards of living."

You have to decide one thing first. Are you committed to the planning, organizing, directing and controlling paradigm or not? If you believe that what is happening today is a passing phase and that the world will get back to stability, logic and order quite soon, then there is a vast array of planning models— and indeed talent planning models—available to you. 

Laughter may be a sure sign that a paradigm shift has occurred. The new world, the one that Lawrence Klein could not plan, is not a world in which management knows and employees obey. It is a world in which the idea of control, job descriptions and skill sets are about as useful as an investment in sub-prime mortgages. If you are willing to accept the new paradigm, then you will accept the need for development and growth and factor this into your management. You will accept a degree of job hopping but seek to make this happen within the company.

The skills employees seek are not specific to a job according to David West. "They are more what we might call personal skills or even what Stephen Covey might call habits. The knowledge based organization will look for resources who: 

• foster thought processes 

• ask questions 

• experiment 

• solve problems 

• improve things 

• value ideas, efforts, and contributions 

• be self-regulating 

• observe insightfully 

• innovate constantly 

• be articulate 

• take initiative 

• have pride in the community 

• show kindness 

• exude confidence 

• excel in teamwork 

• share successes 

• do what they say they’ll do 

• pay close attention to every idea 
  

• follow up "

• LET PEOPLE BELIEVE If the pay is poor, the conditions of employment unfriendly, the supervision untrained, the management uncaring, job security unlikely and status low then it is obvious you have a prescription for staff turnover and absenteeism. No such jobs? Don’t be so sure! 

• In 2010, the CIPD reported that employee satisfaction was at an all time low. 

• Intrinsic motivation is so much more important than extrinsic. 

• There is a world of difference between doing a job and doing a good job. 

• There is a world of difference between doing a good job and putting your heart and soul into it. People do want to feel engaged. 

• The great majority of employees are anxious to believe in what they spend a rather large slice of their lives doing. 

• The trouble is that management just makes it so difficult. 

• Ensure that people in the organization are doing things that enhance their lives. 

• If you are a manager, ask yourself why you stay in your job. If you love your job, ask yourself how you can engender the same feelings in the people who work for you. 

• Employee engagement is not a program that someone (HR?) can take care of while line management get on with the job (which would be what exactly?) 

• Unless you are prepared to change the way you lead, you will end up with just another program. Such programs, with the exception of TQM, have no effect whatsoever on engagement. People are now immune to programs. 

• The attempt to engage employees in their work is not a process isolated from management and leadership. It is management and leadership. It is primarily what managers are for. 

• The only correlation with employee engagement is with a company culture which genuinely prizes people and their involvement. 

• Engagement depends upon organizational values, culture and management style. 

• If you are convinced that top down management is right, then keep clear of employee engagement.

You see, the specific job skills that people have today may well be relevant today. They are unlikely to be as relevant next year and will quite possibly be irrelevant a year after that. If you stick to job skills and job descriptions, redundancies are almost inevitable. However, the mental skills of asking questions, experimenting, problem solving, improving, observing , taking initiative and the personal attributes of idealism, creativity, caring, imagination and ethics are always relevant. If you think that the change rate will continue; if you think that control is no longer the be-all and end-all; if you think that training is out but learning is in; if you think that planning is a joke but opportunism is where it’s at, then you have to find enquiring minds with strong ethics. That’s talent.

Again according to David West, "Employee engagement is the single most serious issue in management today. Its apparently inexorable decline will soon spell the end of Western economies. If you cannot compete on price (and the West cannot) you must compete on creativity and quality. Without employee engagement, neither of these is possible. 

Employee engagement is not the result of some initiative quite detached from leadership. It is not something that someone (HR?) can take care of while line management get on with the job (which would be what exactly?) 

The commercial organisation is the primary way that we bring together people, investment and raw materials to create economic growth, products, jobs and, equally importantly, human well-being and satisfaction. Profitability enables this social purpose. Such organisations are not for short term gains or making CEOs rich, attitudes which have brought capitalism to a crisis point. 

Most employees in most organisations seek to do their best, often in spite of management, much of which disengages people, adds useless cost and serves as grist to the cynics’ mill. This applies equally to not-for-profit and public sector organisations. 

The only way is ethics. If employees are to feel engaged with a company, they need to feel proud of it. Only a company that takes a positive view of ethics can expect employees to find compelling purpose in their work." West, David (2012-03-15). Employee Engagement and the Failure of Leadership (248-249). St Laurence Press. 

How IT Can Stay Relevant Utilizing Lean Principles

Today in business it's not uncommon to see a diverging opinion of the value information technology (IT) delivers. Often the gap is fueled because IT executives have unique sets of challenges and complexities which cause them to focus on different deliverables from that which their business counterparts expect.  Most IT leaders evolved through the traditional IT ecosystem and haven't gained the business experience which their peers have in focusing on value delivery.  This chasm is commonly the cause of the movement for IT leaders to get a "seat at the table" or "more in tune with the business." I completely understand this effort but i've always been a bit humored at the effort to have an executive work towards just getting a seat at the leadership table.  Unfortunately it's very common in technology to keep the leader hidden in the closet keeping everything running.  Regardless, IT is more relevant than ever but must adapt it's value position or it will find SAAS providers invading their domain.

Over the last 10 years there has been a positive movement within IT organizations to focus on value delivery (agile, kanban, lean).  Consistently we hear of two types of IT, firefighting IT and what I will call innovative IT.   Firefighting IT is waking up daily mapping the fires they will fight just to keep the lights on or the business running.  What a horrid way to live your life.  Innovative IT on the contrary positions themselves as a value add to their business peers by continually finding ways to innovate.  Or

in other words an IT organization that strives to continually improve and deliver value to the organization.  Firefighters live the IT of the 90's.  Often it's not always their fault they spend time keeping sins of the past running.  Old technology which requires life support is a drain on innovation. Firefighters are so busy keeping the plates spinning they never have time to say yes to new projects.  The majority of IT groups find themselves in this second group and socializes themselves as a cost center.  Firefights justify their value through concepts such as Total Cost of Ownership (TCO) or at best a cost benefit analysis.

Innovative IT sees themselves as part of their business and always looking for opportunities to improve their value delivery through seamless integration within the business value streams. This effort requires effective management systems that prioritize work and align daily activities with those goals and objectives that are most important to the organization. The focus of management is to create stable processes and standardized work which consistently deliver value to the customer.  To be sustainable it must be simple to understand and execute, providing guidance while not getting in the way. It cannot be too controlling or rigid; otherwise, it will suppress creativity and learning, hindering improvement and innovation.  Wow, you say.  Great to think that way but impossible to do.  Not true, you can do this and you can make your mark but utilizing lean concepts.

Steve Bell and Mike Orzen in their book Lean IT elegantly define this concepts by saying "Lean IT engages people, using a framework of Lean principles, systems, and tools, to integrate, align, and synchronize the IT organization with the business to provide quality information and effective information systems, enabling and sustaining the continuous improvement and innovation of processes. Lean IT has two aspects: outward facing, supporting the continuous improvement of business processes, and inward-facing, improving the performance of IT processes and services." Bell, Steven C. (2012-01-04). Lean IT: Enabling and Sustaining Your Lean Transformation

This is a hard balance, IT organizations are always faced with threats from outside and inside.  They have to consistently protect themselves from risks that can literally produce threats to their organizational livelihood (think Target).  Additionally SAAS  based tools such as SalesForce.com have created scenerios where IT may be defending its existance from providers who can continually deliver cheaper and better (For more on this).  Finally, IT groups have developed a complexity about them that makes it hard to manage let alone innovate.   These challenges are not lost on most IT executives.  In an effort to deliver software faster (faster value delivery)  agile has become an industry in its own.  Although agile is an exceptionally valuable tool it tends to reside more in the activities in the value stream and less a responsibility of leadership (this is open for debate but for this discussion I will leave it alone).

When new leaders or managers come along and try to innovate they are often countered with comments such as "This is the way we've always done it." or "Our business is different."  The pace of change in IT is exponential relative to the business change so not only must IT provide service today.  They must support the legacy of yesterday while planning for tomorrow.  Additionally they are akin to rebuilding the jet while in flight every time they plan to initiate a new technology or process.  It is no question why IT and their business partners can be misaligned.  Based on these constraints there is not a better group to utilize lean principles then IT.  

Lean IT enables a simplified, visible track for business process change throughout the organization, focused on delivering value to the customer. Lean IT is identified through (PPT)

1. People - Only through people do we (working in cross-functional teams) identify the problems and their root causes, which are often found in the process itself and not the technology.
2. Process - When the process is improved (and often simplified), the people may find that the supporting systems can also be streamlined or removed altogether. And when system changes are required to support the process improvement, the future state of the process (defined by the team) helps to articulate system requirements, while the team guides their design, selection, development, implementation, maintenance, and support.
3. Technology - To focus of your team is through IT but it can only be done first through your people and your processes. 

The focus of Lean IT as described above will need to be your lighthouse constantly.  PPT can never take a back seat to the perceived threat of the day.   There are countless books and consultants who can show you the tools to create a lean framework.  Be warned the tools don't maintain your journey towards lean IT.  Again Steve Bell says "You must create a system of lean management which in turn shifts your culture.  A cultural shift will support long term sustainability towards lean.  Introducing Lean

management and information systems requires discipline, time and reflection. Lean principles are even more difficult to embrace, yet they eventually come to influence behavior throughout the enterprise. Values and principles must have time to become internalized within the unique culture of each organization. Nonetheless, it is difficult to begin with values and principles alone, because they are intangible. In order to achieve a sufficient escape velocity and trajectory, an organization should launch with a focus on problem-solving tools, then bounce off the atmosphere established by successful pilot projects , giving the organization time, momentum, and confidence to develop sustaining systems and principles.  Bell, Steven C. (2012-01-04). Lean IT: Enabling and Sustaining Your Lean Transformation

Look for more on this subject on the essential systems required for a lean IT transformation.  Please let me know your experience and if you are looking for a great resource of information please take the time to read Lean IT.