In our last post Understanding Uncertainty and Systemic Risk in Organizations we explained how management must involve the management of variation. Every single process, relationship and communication in our organization, whether we are aware of it or not, is affected by variation. If we ignore variation then we are not managing, and if we are not […]
Using Constraints as a Leverage Point for Sustainable Growth
Whether you’re aware of it or not, every organization has a constraint, something that currently limits output. Correctly identifying the constraint is the key to managing the entire organization in all its complexity with greater precision and predictability. As we have said many times, every human process, from getting to work in the morning to […]
The Importance of Understanding “Constraint” for 21st Century Organizations
Today’s post looks at ways to understand what “constraint” means for an organization and why we need to identify it and manage it in 21st century organizations. This is an extract from the business novel + website, The Human Constraint. May opened the window of her apartment to let in some fresh air. The morning was […]
Resource Optimization – Don’t Make the 100% Efficiency Mistake
Do you think getting everything in your system/organization to work at 100% is the right way to create maximum efficiency? Dr. Giovanni Siepe explains how we can learn from management science (and other sources) that there is a better way. Not too long ago I was reading about “Sukkot”, a holiday celebrated at the end […]
Freedom from the Trap of Silos through a Network of Projects
Many organizations still have traditional hierarchies and silo their people into functions. But the complexity of today’s reality needs something different. With the exponential growth of interconnections and interdependencies, a traditional organizational design can undermine productivity and sustainable growth. Here we summarize the organizational design we propose, based on two decades of international work, specifically applied to […]
You Can’t Cut Through Complexity – KPMG Got It Wrong
KPMG has the tagline “Cutting through Complexity” which suggests they really don’t understand complexity at all. In order to deal with complexity, we first have to understand it, and then we can manage it. How? What does complexity actually mean? “Complexus”, the Latin word for “complex”, roughly means “twisted together”. In other words, when several elements come […]
How Can Systems Thinking Help Organizations?
Question: I have an organizational situation that I need to address and I’m not sure how to go about it. I’ve been hearing a lot about something called systems thinking and I’m interested in understanding what it is and how I benefit from it addressing the situation at hand. Your thoughts on how to pursue […]
MBAs – Are They Killing Our Economy?
Dr. Deming said it years ago – MBAs teach students to raid companies, not to manage them. In her new book Makers & Takers: The Rise of Finance and the Fall of American Business, Rana Foroohar, assistant managing editor at Time, points a finger at business education. She states that in spite of the increase in people studying […]
Holacracy vs. Hierarchy? Try Managing Complexity
We recently saw introduced the notion of Holacracy in discussions about an innovative IT platform. Holacracy removes traditional managers and job titles. Zappos introduced it in the belief that this new structure would allow them to grow in a way that is less rigid and bureaucratic. While this may be a move in the right […]
How to Find Out What is Actually Making Money in Your Company (and What Isn’t)
If you knew accurately what is actually making money in your company wouldn’t that then influence all your decisions regarding cost and investment? Well, isn’t that what accounting is for? The problem is, traditional accounting fails to give a complete and correct picture of what is happening dynamically. Every company is trying to achieve a goal. Sometimes […]
