What is missing from the existing methodologies?
Answer: The Human Factor
Mainstream management thinking, which is derived from processes associated with engineering and manufacturing, uses mechanistic models as the basis for understanding and designing organisations.
These models assume that a business can be understood and managed as a deterministic machine, where all types of requests and breakdowns can be known. Critically, where unambiguously defined and predetermined results can be achieved through implementation of predefined processes. Based on this assumption, once organisations have unique strategies, use the right business models and apply the right management methodologies, then they are well on their way to obtaining the results they are looking for. Of course, this will be the case if the competition is standing still, and if their customers and teams behave in line with their expectations and plans.
Current business environment
We cannot question the value that the structured approach to management and business design has brought us in the past the 50 years. The field of management is now significantly more mature. Moreover, we all have access to the same information to define our strategy as well as the same technology, business models and methodologies to implement it. If we are not certain about our own capabilities to do all of these, then we can hire a consultancy firm to help us. The only question is what does it take to gain competitive advantage when operating in an environment where everything is readily available to everyone? In our view, the place to look is our capability to mobilise our teams in such a way that they generate the correct actions faster and more efficiently than our competitors.
We believe that processes and companies can be observed and designed from three different perspectives: material, information and commitment processes. Practically all methodologies and business models focus on the first two, but they pay little or no attention to the latter.
Material processes have a long history and a universal tradition. They originated from transformational type of work, such as agriculture, construction and, more recently, manufacturing. They focus on storing, moving and transforming materials. Advancements in the field of manufacturing have resulted in significant improvements to these processes.
Even though information management is as old as business itself, the terms data processing and information processing are relatively new. They are often associated with computer-based operations, and they support us in improving automation, communication and decision making through activities such as collection, storage, retrieval, transformation and display of data. The introduction of new technology-based solutions such as CRM and ERP has significantly improved our ability to process data.
Today’s economy is largely reliant on service industries, but our style of management and coordination practices is more suited to a factory mass production environment. Our historical tradition of a hierarchical style of running a business has become ineffective. The value generators and the knowledge workers are not incentivised or given space to innovate. Furthermore, poor performance is hidden behind divided processes and hierarchies.
Managing and delivering a service means interacting with people, with an intention of making something happen which delivers defined value. It entails listening, negotiating, making declarations, requests, offers, promises and assessments. By bringing cohesion to these conversations, commitment processes enable the delivery of a superior service, thus building authentic relationships, enhancing customer expreince and enabling innovation while reducing operating costs.
History of conversation for action
Commitment process, which is also referred to as Lean Commitment Based Management, is more than 30 years old. It gained recognition in the 1980s, following the work of Fernando Flores (University of California, Berkeley) and Terry Winograd (Stanford University) titled ‘conversations for action’. This described a basic atom of work, and how work is initiated. It defined actions and commitments as a linguistic phenomenon, and it provided simple supporting structures. The work of Flores and Winograd has further evolved to address modern management challenges, and has been used by many large companies, some of which are ranked as FTSE 100 companies. The members of our team at Pathfinder have been practitioners and innovators of this discipline for more than 15 years. If you like to discuss this further with the author please email Saiid directly anytime.