I use the Department of Motor Vehicles (DMV) on purpose. We all know what it feels like to go into those organizations and attempt to be treated like a customer. In a recent move, I learned that not all DMVs are so terrible, but none of them are good. Good people trying hard can make a small difference but they eventually get ground down by the structure and incentives of a bureaucracy.
Department Mindsets Worked for Years
Departments as an organizational component were a result of the last industrial revolution. They enabled standardized work and standard jobs and the efficiency that comes from both. While marketplace and technology change remained relatively slow, which it did for years, this way of organizing produced a competitive advantage. Large bureaucracies enabled scale, they were efficient and efficient was enough.
Alfred Sloan exploited this method and other methods of “scientific management” to dominate the automotive market and produced the largest and most powerful company – General Motors – in the most powerful industry in the world at the time. Other companies in other industries copied the approach to create “the” management paradigm of the last century.
The department mindset is focused internally, waits for work requests and then fulfills those requests with standard processes. It produces a “statement-of-work” mentality where people perform the work as prescribed and don’t change unless or until the SOW is changed, regardless of whether it is working on not. Since people don’t understand the effects and consequences of their actions on customers, other departments and the rest of the enterprise they couldn’t tell if it was working anyway. That was up to someone else to know.
Customers of organizations like this are clear about one thing…they aren’t really the customer. No one is going to help them produce outcomes that are important for them, they are going to “do the procedure or process.” This approach is what you see if you visit your local DMV.
This approach worked until the rate of change increased and made it uncompetitive. We shouldn’t be fooled that because we still see this mindset in place that it is working. If it was working companies wouldn’t be so publicly looking to transform themselves, their management structures, their management, and their culture.
Jeff Bezos, CEO of Amazon, leads a company in this new mindset. One of the things he says to avoid is “proxies”. He wants his employees focused on completely satisfying their customers and doesn’t want them to use processes as a proxy, or as an excuse for not producing completely satisfied customers. He doesn’t want to hear, “Sure the customers weren’t happy, but at least we followed the process.”
Large Companies Announcing Cultural Transformation Efforts to Maintain Competitiveness
Today companies still need to be able to scale, but they also need to be able to adapt to constantly changing conditions. When they can’t, they go out of business and that has happened at an accelerating rate in the last ten years.
Speed and innovation will be thwarted by departments stuck in the “Department” mindset.
Company boards, big investors and senior executives know that they must transform their organizations or risk the same fate as other companies unable to bring new products and services to market with enough velocity to beat today’s competitive standards. If they don’t beat those standards they will go out of business. It’s only a matter of time.
The big challenge companies have is if the current “processes” aren’t working, what should they do? How can they change? What do their employees need to know now and how will they learn?
Success Will Require a “Business” Mindset
The intention of the “Business” mindset is to run your department or team as a “Business-within-a-Business”.
Businesses do the following:
- They constitute their mission and core offers that are valuable enough to help their customers and their business thrive
- They acquire, grow and maintain the tools, people, offers and capital they need to be successful
- They have a strategy for how to succeed, not a process or procedure
- They know who their customers are, they design solutions for them that are valuable and they take responsibility for selling these solutions and producing value with them
- They operate their business to fulfill its mission and satisfy its customers
- They build a set of accomplishments that enables their customers to trust and value them so that they accept new solutions more easily
- They account for and build their enterprise’s value, which shows up in profits or, in the case of internal organizations, benefits to customers that exceed the cost of producing them
Departments can do each of these as well but often don’t have the knowledge. Sente can help as our software, various other tools and templates and our services are all organized to help our customers adopt this new cultural mindset. We help your teams to start Working Together, Better.
Our Solutions are Built for a “Business” Mindset
Active Asset Management is described in more detail in a previous blog post, Active Asset Management: Transforming for the 4th Industrial Revolution.
We designed this approach out of the concern that we actually were a separately constituted business and we were going to invoice for our services. Every time we invoiced the customer it was another opportunity for them to assess satisfaction with the results we were producing. If they were satisfied we continued. If they weren’t, we could be “terminated for convenience”. It set up a powerful set of incentives.
Just because the incentives were in place didn’t mean we’d be successful, we’d have to have the skill to pull it off. To produce the value promised so that we could keep our customers satisfied.
For over twenty years we’ve produced these results time and again. Thousands of people have used our software and methodologies and many have won awards from their companies. Our software, methods, and services are built to help our customers bring products to market faster and at lower costs and they are also built to help those who use our solution to succeed in their jobs and career. We write about this in, Software Aimed at Outcomes: Built by Practitioners, for Practitioners.
Success in any Important Endeavor Requires Help
I’ll be forever grateful to two people for the skills that enabled us to succeed with our first customer and with those since.
I worked in Jack Welch’s GE where he demanded a culture of performance and learning. I am so grateful to Jack for the culture he produced in GE and the great leaders I had the opportunity to work for and learn from during my time there. It’s no surprise to me in hindsight that I met Toby Hecht at Jack’s GE. Toby was a top-performing instructor at Croutonville and I met him while taking a three-day course he led in one of the business units. There were maybe 30 of us who took that course and 10 of us who continued our education with Toby. For several years in a row, the region that had the most students learning from Toby won “region of the year” and produced the most MVPs. Toby is not an academic. He teaches us what he invented for himself to produce the business and personal success that he has. What I’ve listed above under “businesses do the following” I’ve learned from Toby and applied during my time at GE and now in my own company.
We are happy to help people and companies transform and, in addition to our offers, connect them to networks that can help them as well.
If You Really Want to Produce Big Results, We Can Help You
Ten to fifteen years after we started Sente I happened to run into the executive who first hired us. As I brought him up to date on what Sente was up to he said to me, “You know, you couldn’t have accomplished all you did with us and saved us all that money if we didn’t want the same thing.”
It seems so obvious but true. Producing great results is an active endeavor with constant attention to the production of outcomes and great coordination and commitment required on the team.
If You Want the Help…We Can Help!
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“What I like about Sente’s approach is how it has turned my engineers into businesspeople. They think it terms of investments and returns now.”
VP of Engineering