Organisation Leaders - Two Options for Improvement Leadership

I4Excellence was established with the intent of bringing together improvement capabilities and improvement leadership in organisations - from research and experience, we know it's the only way to build and sustain Continuous Improvement.  For his first blog post, Steve Fannon reviews and reflects on a brilliant paper which explains two fundamental choices for improvement leadership.

Here's the situation: There's a problem or performance gap.  Targets are at risk, customer delivery performance is in jeopardy - Something needs to change in order to close the gap.  What do leaders and managers do?  What should they do?  Repenning & Sterman (2001) propose that there are two available approaches; work harder or work smarter.

Many things have changed in the last 20 years.  Individual attention spans have reduced dramatically, and a journal paper of this kind gets little attention in a world full of 'information noise' and simple 'soundbites'.  Around eight years ago, as an improvement leader in a large organisation, I became aware of this paper.  I was battling daily in a 'work harder' leadership structure with selective 'work smarter' characteristics.  I only had the attention span to snack on and graze-over this important work, and gave it little time, yet I was living it on a daily basis.  My attempts to engage and lead 'work smarter' approaches were often ignored and overlooked, and over the years, the situation took it's toll..  My objective here is to release insight from this work in a short review article... and maybe convince you to read the full paper - it's so fundamentally important for organisation improvement.

It's also been some time since Deming (1994) shared his 'System of Profound Knowledge', describing the importance of 'Systems Thinking' amongst four key focus areas for management and leadership - something also overlooked today.  Repenning and Sterman (2001) use Systems Thinking to describe the impact of choosing one of two approaches to improvement leadership.  They describe their simple model with a 'Causal Loop' diagram - a really simple but powerful tool for describing consequences within a system.  This model also captures workplace psychology - another key focus area in Deming's 'system'.

So, back to those two alternate decisions faced by leaders who need to improve performance of the organisation; work harder or work smarter.  'Work smarter' is one of those terms that has become tainted through over-use, and therefore joined the lexicon of 'business speak bingo' long ago, so we'll rename that choice in this article as "Invest to Improve".

Key references:

Original paper:  Repenning, N.P., Sterman, J.D., 2001. Nobody Ever Gets Credit for Fixing Problems that Never Happened: Creating and Sustaining Process Improvement;  California Management Review, Volume 43 No. 4, 2001.

Deming, W. E., 1994. The New Economics For Industry, Government, Education;

Kotter, J. P., 2012. Leading Change: Why Transformation Efforts Fail; Harvard Business Review Press.

Power, B., 2011. Uniting the Religions of Process Improvement. Accessed Sept. 2021 at https://hbr.org/2011/03/uniting-the-religions-of-proce

Choosing the 'Work harder' approach - here, managers assume the underlying cause of gaps to target to be individuals not working hard enough (we won't call them leaders for this reason).  Based on this assumption, the approach applies a management style that ramps-up the pressure, the overtime, the chasing and status reviews to maximise effort.  This sets aside maintenance, and other 'overheads', including improvement activity to focus on output, catch-up and output targets.  It works in the shorter term, but there's a high price to pay.

The outcome of this approach is called 'better before worse' by Repenning and Sterman because that's exactly what's achieved.  The management pressure ramps-up focus, effort, and it has a positive impact on results... the management team then assume that further improvement needs more of that approach.  Teams are put under more pressure, subject to more progress reviews - extra-ordinary effort and time is invested by the people, results improve further.  The cycle repeats, but eventually hidden cracks start to show.  Teams are cutting corners to meet output demands, deviating from standard process, covering-up issues and doing whatever it takes to cope in this environment and deliver output... but this approach also has a natural limit. 

There are only so many hours in a week, so much maintenance that can be skipped, only so much that people can or will be able to take in this environment.  From a system perspective, corners have been cut, standards compromised, and process discipline lost - the system is no longer stable and predictable as it was.  Both things together create the longer-term drop in output performance.  The system is sick, and the organisation culture compromised by mistaken beliefs, and the necessary coping strategies of the workforce.

Choosing the 'Invest to Improve' approach - here, faced with the same performance gap scenario, but leaders recognise that the system isn't currently capable of delivering the target, or catching-up losses resulting from problems.  Leaders identify that the system needs to be improved, and that time and effort will be required to do that.  Leaders also recognise that there is a trade-off in short-term performance because of this investment of time and resources by the team.

Described as the 'worse before better' approach, there is an inevitable time lag in output performance before the benefits of improvement activity start to have an impact... and this is key challenge for proponents of the 'Invest to Improve' approach.  Because worse comes before better, this approach isn't going to have an instant impact and close that performance gap.

Hitting the limit of the 'Work harder' approach - When ‘work harder’ reaches breaking point… then what?  There are a whole series of scenarios that may then follow.  Perhaps it's time for a leadership move or promotion (before the performance drop-off is found out)?  Maybe management recognises an urgent need to recruit more staff (to work hard in the sub-optimal, non-standard process with short-cuts and corrupt practice).  There may be an Increasing need to deal with the dissatisfaction and burn-out of existing employees.  It's possible that management will recognise a need to re-structure the organisation – maybe off-shore or out-source?

What's unlikely to happen is a sudden realisation that improvement is missing, the wrong choice was made, and recognition of the need for a 'U-turn' to take the 'Invest to Improve' approach.  This is due to psychology - management are heavily invested in 'work harder' and have the mistaken belief that this approach was effective. The authors also reference that... humans are not good at recognising a cause vs effect relationship when there's a 'lag' between cause and effect.  A change of approach will only happen if the management / leadership change.

So both options for performance improvement have their drawbacks, but the key problem with 'work harder' is that the issues are longer-term, and few things can be done to mitigate them - it's a route to corruption of the performance improvement culture.

Delay in realising performance benefit - Active Change Management is the primary countermeasure for this issue, and the Kotter 8-Step approach to effective Change Manager can be an important tool here (pictured).  Amongst the most important of those steps is 'Build a coalition', 'Develop a Vision', 'Communicate the Vision' and 'Generate Quick Wins'.

CI Leadership capability required - The knowledge, skills, behaviours required to lead a CI environment are quite different to those required to do improvement activity. This has been widely overlooked since the work of Deming, Juran and others in the 20th century. Organisations need to recognise: their leadership and management teams need to up-skill in a different way to their improvement practitioners. Senior leadership need to 'fly the flag' and sponsor improvement as a core principle, while mid-level leadership teams need to lead effective improvement environments - where improvement activity can succeed and deliver results.

The improvement approach must be effective - There won't be a second chance, and yet there remain many separate improvement 'religions' (Power, 2011) which serve to confuse things. Some stick firmly to their improvement 'religion', and many seem fickle and overly eager to follow the next new thing; over-hyped and exploited by management consultants, business publications, and seeking to discard all that went before - useful or not! Leaders must see through this, don't believe the latest hype, find out - seek to understand what works best for which situation and why, and recognise no single 'religion' has all the answers. The organisation should adopt the right balance of methods in a holistic 'Excellence' approach... Operational Excellence, Process Excellence, Business Excellence, Service Excellence - whatever it is, make it the right blend of methods for your organisation.

Given that there are also challenges ahead when taking the 'Invest to Improve' route to performance improvement, what are the key considerations and counter-measures for these issues?..

To conclude... I hope this article can bring some recognition of the clever work of Repenning and Sterman in their original paper and make their insight accessible to others. I hope my own interpretation and contemporary commentary can help leaders to stop and think about their choice: Work harder or Invest to Improve. I also hope it helps those leaders make the best choice.

For those seeking support in their own pursuit of 'Investing to Improve', please contact me at I4Excellence. We have a research-led understanding of improvement leadership and many years' experience of improvement methods and tools. We can support with improvement strategy development, identification of learning needs, and delivery of learning programmes. Peer review, coaching and technical support for improvement activities are all at hand.

Steve Fannon.

Chartered Engineer, Lean Six Sigma Master Black Belt, CI Leader, Consultant, Trainer, Coach.