It’s the way we work… not the people

John Seddon argues that command and control cultures are failing organisations and that HR should drive forward new ways of working


For some years, the HR profession has described itself as being ‘at a crossroads’, with perennial conferences questioning its future role. The question itself is predicated on disquiet within the HR community of the value of services provided to organisations: do opinion surveys, Investors in People, involvement, competencies, communications, motivational programmes, and so on, actually work?


While these practices may be carried out with good intent, do they really make a difference? Well, yes, but the problem goes a lot deeper. Many if not all of the services provided by HR professionals are based on flawed assumptions or responses to symptoms rather than tackling the disease. It is our underlying organisational theory that is at fault. The pressing requirement is to re-think that theory and in that endeavour the HR professional could and should take a central role.


Our organisations are designed and managed according to the principles and practices of command and control management. Top-down functional hierarchies manage the work, while often being limited to a budget. In a variety of ways, and however we might wrap it up, workers simply ‘do as they are told’.


It is a way of managing that became the norm after the introduction of Henry Ford’s mass production system. Two central tenets of the command and control philosophy are that decision-making should be separated from work and that people can be held accountable for the work they do. The idea has led to a plethora of ‘people-centred’ HR policies and practices.


Quality theorists W Edwards Deming, who developed a 14-point plan for management, and Joseph M Juran, who established a theory of quality management, argued that as much as 95 per cent of the causes of variation in performance are attributable to the system – the way work is designed and managed, and not the people. If this is true, performance appraisal, incentives and ‘people make a difference’ programmes in their various forms are working on the 5 per cent at best, and having a damaging, demoralising effect at worst.


This argument is demonstrated by the most modern example of mass production: the call centre. Call centres have grown because of the availability of new technology and management’s pre-occupation with cutting costs. It is attractive to a command and control thinker to treat telephone work as a functional specialism, distinct from other work and manageable in telephone ‘factories’.


While the idea is to save money, managers of call centres frequently encounter increased costs, a worsened service and low staff morale.


Call centre employees are often judged by their levels of activity with managers performing inspections; they want employees to spend less time on calls and/or take more calls, offer a good service and be happy in their work.


It is easy to illustrate how the major causes of variation in agent performance in a call centre are inherent in the system – the way the work is organised. By managing ‘people’, the managers are focused on the wrong things. They should be dealing with variations in the nature and complexity of the calls, the usability of information technology – which is all too often designed from an internal perspective, not a customer perspective – the procedures or work flows that come out of the call centre, agent knowledge versus customer demands, and so on.


Only actions on these, the causes of variation, will improve performance. And the result is always a significantly improved service running at a lower cost. It is to re-focus management roles on the 95 per cent described by the quality theorists. The job of management should be to work on the improving the system.


All of the current HR effort (training, appraisals, surveys) supporting people management is of little or no true value and likewise the HR effort in managing the dysfunctional consequences (absence, poor performance, and so on) does a poor job of tackling the symptoms.


When managers learn to see their call centres as a system, rather than a top-down functional hierarchy, they appreciate the value in studying the organisation from the outside-in.


There are two kinds of demands customers place on call centres: value demands (the things we want customers to call about), and failure demands (demands caused by a failure to do something or treat the customer properly).


It is not unusual to find failure demands running at 50-70 per cent at call centres, and it is a major cause of variation in agent performance and a huge cost in terms of both service and efficiency. While managers remain pre-occupied with the questions: ‘how many calls are we receiving?’ and ‘how many staff do I need and how do I get them to do more?’, they remain oblivious to the major opportunities for improvement.


Management’s measures in call centres are all concerned with activity and its associated costs. Following Ford’s example, we have built service ‘factories’ often overseas. The appeal of outsourcing to India, for example, is to lower costs, but as W Edwards Deming said, some costs are invisible in management’s accounts. If we outsource failure demand to India, the consequence will be to increase costs.


The secret to saving money at the same time as improving service is to design against demand – if you learn how to give the customer exactly what they want, and only that, you learn how to give high quality service at the lowest cost.


The kinds of behaviour required to take advantage of these opportunities are outside the experience of most organisations’ cultures. Managers are locked in to their functional, budget-based, hierarchical measures and roles, workers are locked in to their specified activities, inspectors inspect and HR people are employed to maintain the status quo, developing people in line with the principles of command and control and applying palliatives as required.


When a systems solution is applied, the consequence is a re-think of HR policy and practice. In a call centre, this means changing training to be designed against demand, removing inspection and replacing it with prevention-based procedures. It also requires changing the role of management, and this means managers removing all counter-productive measures and replacing them with those that help in understanding and improving performance – for example, measures of demand and flow. As a consequence, capacity and customer service will improve, costs will fall, control is regained and, last but by no means least, morale is boosted. The solution requires that people are put back at the heart of the enterprise.


While Ford’s system doubled workers’ wages and halved the cost of making cars, it brought with it unintended consequences. The growth of unionisation, job property rights and associated pay issues became the stuff of HR in the last century. And while more recent improvements have seen attempts to humanise the workplace, modern call centres have earned the sobriquet ‘sweatshops’.


The current design of our call centres ignores the reality that the problems lie in the work, not with the workers. To change today’s enterprises in a beneficial and sustainable way is a strategic issue. People’s ingenuity needs to be harnessed in the pursuit of the organisation’s purpose, something that, paradoxically, command and control management prevents.


HR’s role should be to chart a route to a different philosophy – for this requires a change in management thinking – and as the system evolves, HR services provided to the enterprise will be changed. It won’t happen overnight, but it will happen, because money talks (eventually).


John Seddon is author of Freedom from Command and Control: a better way to make the work work, published by Vanguard Education.


Command and control v systems thinking

















































Factor 


Command & control thinking


Systems thinking

 Perspective  Top down, hierarchy  Outside-in, system
 Design   Functional  Demand, value and flow
 Decision-making   Separated from work  Integrated with work
 Measurement   Output, targets, standards  Capability, variation
 Attitude to customers  Contractual  What matters?
 Attitude to suppliers  Contractual  Co-operative
 Role of management  Manage people and budgets  Act on the system
 Ethos  Control     Learning
 Change  Reactive, projects  Adaptive, integral
 Motivation  Extrinsic  Intrinsic

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