One commonly hears that we live in an increasingly complex world. This has the implication that the work of management becomes increasingly difficult, because complex systems behave in non-linear ways. What “non-linear” means is that things do not continue to happen in the way that they did in the past. The traffic jams seem to suddenly become much worse than we were used to. The predictable patterns of demand, like the year-end spike in sales, do not happen like before. The load on a justice, education or health system changes for reasons that are difficult to fathom.
In this world where we as leaders and managers need to find a way through this confusing, mis-behaving mess, there is another problem.
In recent years, research in the neuro-sciences has shown that we are not very good at making the kinds of decisions that are required in this complex world. Daniel Kahneman, his colleague Amos Tversky, and by now many other researchers, have shown that we, all of us, are not very good at making effective decisions when faced with complex problems.
In his book “Thinking Fast and Slow” Kahneman explains that we have two modes of decision-making. One of these is a quick and easy way of assessing and deciding what to do which works well under relatively well-known circumstances. When you hear the screeching of tyres nearby, you don’t debate the rights and wrongs of negligent drivers, you instinctively jump out of the way.
The problem is that the instinctive way of making decisions does not work well in a complex world. The other mode of decision-making, which is hard and slow, is required to develop an adequate understanding of complex problems. What is important to understand about this second way of thinking is that it isn’t just about the technical know-how required to understand the problem. The fact that it is hard to do makes our brains “lazy” according to Kahneman. Maybe it is a bit unfair to put it that way because it has also been shown that it is physically exhausting to do complex problem-solving.
Nevertheless, as a generalisation, it is mostly true that we have become addicted to instinctive and intuitive ways of making decisions. We often use it when it is not appropriate which leads to all kinds of biases creeping into our decision-making. There are many well-documented biases. Here are just a few:
- Confirmation bias: When past successes hide the risk that success may not continue into the future;
- Narrative bias: Concocting a story that “explains” events after they have happened;
- Loss aversion: Our tendency to over-react to losses compared to gains of the same value;
- Over-confidence: Thinking that you know more than you actually do
Do yourself a favour – look up these biases. You will recognise a few that you indulge in yourself.
So what is the countermeasure to this bleak scenario?
In my (unbiased?) view the countermeasure is lean management. A countermeasure is never a perfect solution, but nevertheless I think lean management is the best way to close the gap between the management challenge and our fallible problem-solving capabilities.
I say this because lean management, if correctly done, is based on consistent, systematic application of the Plan-Do-Check-Act (PDCA) cycle in all the work we do. PDCA in turn is based on the scientific method. We know that over time science has made amazing progress possible, so using a similar approach for management should also work well.
PDCA is the continuous checking of the plans managers implement to achieve the results they, and the stakeholder they represent, desire. In essence, this is no different to an everyday application of the scientific method which consists of empirical testing of theories against what happens in the real world.
A theory is little more than an “if ….. then ….” statement. Management decisions are working theories that: If we implement [insert the management decision] then [insert the desired result] will happen. By implementing the decision the management plan (theory) is tested and in due course we will know whether it worked or not.
The challenge with all of this lies in the two words “systematic” and “consistent”.
Why do we need to use the PDCA cycle systematically? Because if we don’t, we are likely to fall back into the quick and easy way of making decisions by jumping to conclusions. So we need principles and techniques to guide our decision-making, and we need to use them systematically, otherwise they won’t work.
And why do we need to use the PDCA cycle consistently? Because there is no silver bullet that can solve complex problems in one shot. It takes many tests of the plans we implement to learn what works best, which of course takes time. In addition, entropy causes deterioration of system performance all the time. That’s why it is necessary to improve continuously.
We know how hard it is to break old habits. Arguably the hardest habit to change is the way in which we think. In the true sense of the word “lean” we need to train the muscle in our head to think differently. We have learnt that it helps to have a coach to achieve that systematic and consistent best practice.
Fortunately there are those who have gone before us and can now guide us on this journey. We will soon gather at the Lean Healthcare Summit on 7 September in Johannesburg, where some of the world’s leading practitioners of lean management in healthcare will share their insights with us.
I am personally looking forward to catching up with Dr John Toussaint’s thoughts on principle-based lean management and Dr Stefan Metzker’s take on the post-modern complexities of healthcare. I look forward to seeing you there.
P.P.S. The final 2017 cycle of public workshops will be held in Cape Town and Johannesburg in the coming months. Register for our Introduction to Lean, Lean Management the A3 Way and Lean Transformation and Kata workshops on our website.