Andy's Party, A small Business Mindset, case study help

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Read the attachment and A small Business Mindset Article to answer the question.

Case Study: A Small Business Mindset

Andy's Parties

Andy Ross completed his bachelor’s and master’s degrees at prestigious schools which led him to high profile positions in well-known firms, but after a few years his discontent grew. Although the pay was good and the benefits among the best offered, Andy felt something was missing. Newly married and in a nice home that put them at the edge of their financial capabilities, Andy’s desire to own his own business was all consuming. It was difficult to describe to his wife exactly why this was so important, yet it compelled him to search for a business concept that he and his wife could start and operate together. Then, when invited to a friend’s birthday party for their young child, it came to him; A themed birthday party business. Here is how they planned to advertise their business:

We do it all...from set-up to clean-up! Andy's Parties offers full-service, themed children's parties and enrichment classes. Our great theme parties include everything for a great party:

  • Great Games and Activities
  • Themed Craft Project
  • Themed Party Favors
  • Themed Paper Products
  • Piñatas and Invitations Included With Most Theme Parties
  • All food, drinks, and supplies
  • Set-up, clean-up, and more - all led by our fun and energetic staff!

Andy’s Parties offers approximately 30 theme parties, the most popular of which include Girlie Spa, Rockin’ Dance, Princess, Pirate/Treasure Hunt, Murder Mystery and Safari. Andy’s Parties’ packages are all inclusive and we subcontract non-core services such as bounce house rentals, professional entertainers (magicians, balloon-twisters, etc), and high-end adult catering.

Reasons to have an Andy's Party:

  • We do everything so you don't have to!
  • Our prices are very competitive with other party services and venues.
  • We have a party at your home - that alleviates any concerns about the chaos and safety hazards posed by larger venues with many strangers.
  • We have great experience with kids’ party services and also larger event planning.
  • We love our jobs and will ensure a fun party for your children and their friends!

Andy and his wife launched their business in 2004 by leasing a small space in a local retail center where they could offer daytime classes, host themed birthday parties for parents that didn’t want them in their home, and as a base for operations. They hired high school students to run the parties and provided them with extensive training. Over the past several years the business has flourished with over 1,000 parties a year with average revenues of $400 per party.

Assignment #1: Changing Mindset Case Study Analysis (16%)

Purpose:

An entrepreneur is someone who thinks and does something that they have not done previously.Entrepreneurship is about having a mindset that focuses on assessing a situation, designing alternatives and selecting a new way of doing something.

This assignment provides students an opportunity to look at a business situation and use an entrepreneurial mindset to answer questions about a case study presented in week 2.

This assignment has two parts.

In part 1, students will be provided a scenario that highlights several critical issues related to a corporate mindset versus that of a small business.

In part 2, students will read an article and provide a synopsis of the article as it relates to a learning organization.

Outcomes Met:

  • demonstrate an understanding of the small business environment and how to manage in a global marketplace
  • develop critical managerial skills and processes to assess and analyze key elements of emerging enterprise organizations

Instructions:

Step 1: Review “How to Analyze a Case Study” under Week 2 Content.

Step 2:  Create a Word or Rich Text Format (RTF) document that is double-spaced, 12-point font.  The final product will be between 4-6 pages in length excluding the title page and reference page.

Step 3: Review the grading rubric for the assignment.

Step 4:  Follow this format:

  • Title page with title, your name, the course, the instructor’s name;
  • Introduction;
  • Body, in paragraph form using headings:
  • Summary paragraph
    • Part 1
      • Use headings for the questions provided but do not include the questions in the paper
    • Part 2

Step 5:  In writing a case study, the writing is in the third person.  What this means is that there are no words such as “I, me, my, we, or us” (first person writing), nor is there use of “you or your” (second person writing).  If uncertain how to write in the third person, view this link: http://www.quickanddirtytips.com/education/grammar/first-second-and-third-person

Step 6:  In writing this assignment, students are asked to support the reasoning using in-text citations and a reference list.  A reference within a reference list cannot exist without an associated in-text citation and vice versa.  View the sample APA paper under Week 1 content.

Step 7:  In writing this type of assignment, students are expected to paraphrase and not use direct quotes.  Learn to paraphrase by reviewing this link: https://writing.wisc.edu/Handbook/QPA_paraphrase2.html.

Step 8:  Read critically and analyze the scenario provided under Week 2 Content. 

Step 9:  Document key facts from the scenario.  Consider making an outline to capture key points in the paper. 

Step 10:  Part 1:Answer the following questions after reading the case study:

a.)Using at least two references explain why an individual would choose to leave a good career to start a small business with no prior experience, no existing model to follow and without significant capital?

b.)Discuss at least three reasons why Andy’s Parties achieved success so quickly and has been able to sustain the business over the past 8 years when statistically most small businesses fail within the first few years?

c.)Discuss what Andy and his wife’s plans might be for their business going forward?

Step 11:  Part 2:

a.)Read “Why aren’t we all working for learning organisations?e-Organisations and People by J. Seddon and B. O’Donovan located under week 2 content

b.)Provide a synopsis (400-600 words) of the findings related to the article.

Step 12:Create the introductory paragraph.  The introductory paragraph is the first paragraph of the paper but is typically written after writing the body of the paper (Questions students responded to above).  View this website to learn how to write an introductory paragraph: http://www.writing.ucsb.edu/faculty/donelan/intro.html

Step 13:  Write a summary paragraph.  A summary paragraph restates the main idea(s) of the essay.  Make sure to leave a reader with a sense that the essay is complete.  The summary paragraph is the last paragraph of a paper.

Step 14: Using the grading rubric as a comparison, read through the paper to ensure all required elements are presented.This step is probably the most critical and can result in many lost points if instructions are not followed.

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Why aren’t we all working for Learning Organisations? Professor John Seddon and Brendan O’Donovan © AMED 2010. ISSN 2042 – 9797. Copyright of this e-Organisations and People journal remains jointly with The Association for Management Education and Development and with the author(s). However, you may freely print or download articles to a local hard disk, provided they are for your personal and non-commercial use only. Please ensure that you acknowledge the original source in full using the following words ‘This article first appeared in eOrganisations and People Vol 17 No 2 in May 2010, and is reproduced by kind permission of AMED www.amed.org.uk. For permission to reproduce article(s) from this journal more widely, please contact the AMED Office: amedoffice@amed.org.uk, +44 (0) 1480-459-575. The views expressed in this journal by both editorial staff and contributors are not those of AMED or any of the organisations represented by the editors, but reflect the opinions of the individual authors only. ____________________________________________________________________________________________________________ e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 www.amed.org.uk Why aren’t we all working for learning organisations? Professor John Seddon and Brendan O’Donovan Abstract Revisiting Peter Senge’s work ‘The Fifth Discipline’ twenty years on, the authors reflect on why there are not more ‘learning organisations’ around us. They conclude that W Edwards Deming’s critique of Western management practices apply as equally to Senge’s ideas as they do to those of other theorists. By using Argyris’s model of ‘Double-Loop Learning’, the authors suggest a way for managers to switch from a ‘command and control’ to a ‘systems thinking’ mindset in order to achieve genuine organisational learning. Keywords: Senge, Seddon, systems thinking, learning organization, double-loop learning. In Peter Senge’s best-seller The Fifth Discipline (Senge, 1990), he popularised the idea of the ‘learning organization’. In the book, Senge defined learning organisations as: “… organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.” (Senge 2006 p3) Learning in this context has a specific meaning for Senge, which he terms ‘metanoia’, a Greek word meaning ‘a shift of mind’. A learning organisation is therefore: “… an organization that is continually expanding its capacity to create its future. “For such an organization, it is not enough merely to survive. ‘Survival learning’ or what is more often termed ‘adaptive learning’ is important 5.01 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 indeed it is necessary. But for a learning organization, ‘adaptive learning’ “For … an organization, it is not enough merely to must be joined by ‘generative learning,’ learning that enhances our capacity to create.” (Senge 2006 p14) survive. ‘Survival learning’ … must be Getting organisations to ‘shift their minds’ in order to produce both joined by ‘generative adaptive and generative learning was the intent of Senge’s work twenty learning,’ learning that years ago. Fortune magazine went as far as predicting that “the most enhances our capacity to successful corporation of the 1990s will be something called a learning create.” organization, a consummately adaptive enterprise.” (Fortune 1989, in Senge 1990). So why is it that these predictions do not appear to have materialised in 2010? Why do we not see examples of learning organisations all around us? We believe that the biggest clue as to why we are not all ‘learning organizations’ was given by W Edwards Deming, one of the original reviewers of the book back in 1990. As Senge commented after reading Deming’s review, he “slowly started to realize (Deming) had unveiled a deeper layer of connections, and a bigger task, than I (Senge) had previously understood” (Senge 2006 p x). Deming’s review said: “Our prevailing system of management has destroyed our people. People are born with intrinsic motivation, self-respect, dignity, curiosity to learn, joy in learning. The forces of destruction begin with toddlers – a prize for the best Halloween costume, grades in school, gold stars – and on up through the university. On the job people, teams, and divisions are ranked, reward for the top, punishment for the bottom. Management by Objectives, quotas, incentive pay, business plans, put together separately, division by division, cause further loss, unknown and unknowable.” (Deming in Senge 2006) It is our contention that Senge’s work did not tell managers how to tackle this “deeper layer of connections” that was necessary before they could become a ‘learning organization’. However, a combination of the works of Chris Argyris (Argyris 1999) on intervention theory and Deming’s own 5.02 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 systems perspective on management can provide us with a way forward. We will go on to explain this in more detail, and also to present a systems archetype for managing a generative transactional service. Command and control: the prevailing system of management One of the authors of this article (John Seddon) has worked extensively with service organisations and has developed his own term for the elements of Deming’s “prevailing system of management”. Seddon and Caulkin have defined ‘command and control’ management thus: “Command and control means regulation by management, with its battery of computer and other informational aids … where decision-making is distant from the work and based on abstracted measures, budgets and plans” (Seddon and Caulkin 2007 p12) “Command and control Command and control ideas have their roots in Taylorism (Taylor 1998 - means regulation by first published 1911) and the mass production innovations of Henry Ford management, with its (Ford 2003 - first published 1926) and Alfred Sloan (Chandler 1977). battery of computer and Command and control thinking continues to see organisations as top- other informational aids … down hierarchies, where work is designed in functions, managers make where decision-making is decisions and workers do the work. distant from the work and based on abstracted Managers make decisions using budgets, targets, standards; they seek to measures, budgets and control the workers with a variety of management practices: procedures, plans” rules, specifications, inspection and so on. The management ethic is to manage budgets and manage people. These features of a ‘command and control’ mindset manifest themselves in service organisations as an obsession with managing the activity of workers. This has been characterised as forming the ‘Core Paradigm’ for conventional service management (Seddon2008) and consists of three questions which preoccupy managerial decision-making in transactional service organisations such as financial services, telecommunications, IT services, police, local authority, government agencies and housing services.: • How much work is coming in? • How many people have I got? • How long do they take to do things? In this dominant management paradigm, managers think of their job as a 5.03 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 resource-management problem. It leads managers to do the following types of things in pursuit of improving service operations: • Reduce average activity time (through procedures, job aids, call coaching and targets) • Use I.T. to replace, support or control the service agent • Outsource activity to lower-cost organisations/economies • Increase functional specialisation (to reduce training costs) • Standardise work processes • Put similar work into back-office factories These are all examples of what Argyris and Schön would call the actions of a manager going through ‘single-loop learning’ (Argyris and Schön 1974). For Argyris and Schön, single-loop learning involves improving incrementally through learning new skills or capabilities, with managers perhaps learning to do something better but without challenging the underlying beliefs and assumptions behind their problems (see Fig 1). In Senge’s language, this is what he describes as ‘adaptive’ learning (Senge 2006 p14). Fig 1: Single-loop learning (from Argyris 1990 p92) So, the problem as it is conceived by managers in the ‘Core Paradigm’ is Managers assume that people need to be commanded and controlled how best to manage activity. Managers assume that people need to be commanded and controlled (Seddon 2003). Scripts, procedures, targets, standards, inspection and compliance govern the way that these organisations work. The managerial tactics listed above are all essentially concerned with managing cost. For example, a call centre manager might be tasked with reducing costs in line with an enforced efficiency target dictated higher up the hierarchy. In order to do this, he/she might decide to focus on service levels: how long it takes an operator to pick up the telephone. Also, by imposing a standard time on calls, the manager may 5.04 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 think that calls will be cheaper. But when the manager is then unexpectedly faced with rising costs due to rising ‘failure demand’ (Seddon 2003) as explained in greater detail below, he/she might decide to impose scripts on the workers. When this is equally unsuccessful, the manager may enforce greater inspection of work to ensure the workers are complying with the scripts, so as to ensure they reduce the time taken per call. We see that managers become further and further entrapped in the core paradigm described above, where their focus becomes fixed on making the worker work harder. The manager becomes ensnared in ‘single-loop’ learning, unable to see the deeper assumptions beneath their actions. Senge represented many of his ideas in a series of systems archetypes, saying that “the template shows the basic structural form of the archetype but lets managers fill in the variables of their own situation” (Senge 1990 p17). We have represented the command and control view of service work as an archetype: All demand is treated as Sort by type Queue ‘work to be done’ Inspect Work to standard time Key measures: Activity and cost Fig 2: Command and control archetype for factory service management This archetype is a high-level representation. In practice, service organisations are much more complex but the complexities, nevertheless, follow this quintessential logic. Managers schedule resources according to the volumes of work coming into the system. Usually, the first step in the flow is to ‘sort’ the work by, for example, using interactive voice response [IVR] systems in telephony (“press 1 for x, 2 for y”) and with incoming mail the work is typically scanned and sorted into pre-determined electronic work queues, often breaking one customer 5.05 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 demand into a variety of sub-tasks, allocating each to its own queue. When work is done it is managed by ‘standard times’, the assumed time it takes to complete each task and resources are devoted to inspection to control the output to the customer. Often a customer demand into such a “… most possibilities for system is fragmented into many sub-tasks and consequently the flow of improvement add up to work crosses functional, organisational and geographic boundaries. For proportions something like managers imprisoned by what Deming called the “prevailing system of this: 94% belong to the management”, efficiency is assumed to be associated with controlling the system (responsibility of costs of activities. management) 6% special.” Deming’s insight: focus on the system The assumption is mistakenly being made that performance is all about people and their activity. It is, as Deming pointed out, to focus on the wrong things: “The fact is that the system that people work in and the interaction with people may account for 90 or 95 percent of the performance” (Deming, in Scholtes 1998 p296) “I should estimate that in my experience most troubles and most possibilities for improvement add up to proportions something like this: 94% belong to the system (responsibility of management) 6% special.” (Deming 1994 p xv) To escape this organisational prison, Deming instead advocated that management’s focus ought to be with the flow of work through the broader organisational ‘system’, rather than measuring and managing work in functional activities. Operating at this ‘system’ level achieves far more than focussing on the refinement of individual functions and/or processes. His famous “Figure 1” – a picture capturing the flow of work through a manufacturing organisation – became notorious because it was often the only visual aid he would use to orientate his post-war Japanese audiences as to what to pay attention to when considering their work as leaders. He believed that constancy of purpose to improve the system should be the cornerstone of management’s efforts; his figure served also to provoke 5.06 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 discussions of what the suitable method and measures of achievement of purpose should be. Figure 3: Deming’s famous “Fig 1 diagram” Production viewed as a system” (Deming 1982 p4) Counter-intuitive truths When one learns how to apply this key Deming insight (study organisations as systems), certain counter-intuitive truths are discovered. The industrialisation of services is the result of the management of workers’ activity which, as we have already discussed, is based on the assumption that activity equals cost. Moving work to call centres, the separation of front-office tasks from the back-office ‘factory’, the specialisation of tasks and the standardisation of work are all Paradoxically, one management activities driven by this basic belief in the need to manage discovers that the activity as cost. Paradoxically, one discovers that the consequence of consequence of … focus service managers’ focus on costs is that they inadvertently drive costs up: on costs is that they the number of steps it takes for a customer to get their demand satisfied inadvertently drive costs increases, with each unnecessary step adding extra costs to the up organisation and causing greater customer dissatisfaction (the “unknown and unknowable” costs Deming referred to in his book review). The process of realisation that comes with the discovery of such counterintuitive truths marks the first step for service managers towards what Argyris and Schön call ‘double-loop learning’(Argyris and Schön 1974). Double-loop learning goes further than single-loop learning by reshaping 5.07 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 the patterns of thinking and behaviour which govern why actions are taken (see Fig 4). We believe that double-loop learning is a necessary condition for the development of what Senge called ‘generative learning’ and thus essential in the progression towards becoming a ‘learning organization’. Fig 4 Double-loop learning (from Argyris 1990 p94) … managers must study their workplace and understand the underlying causes of the problems that they have, instead of For double-loop learning to take place, managers must study their workplace and understand the underlying causes of the problems that they have, instead of jumping to their well trodden, ‘core paradigm’-based solutions. Only in this way can the ‘governing variables’ behind their actions be surfaced and subsequently altered. jumping to their well trodden, ‘core paradigm’based solutions Managers find that studying services as systems often reveals other similar counter-intuitive truths: Demand is the greatest lever for improvement By measuring the type and frequency of demands into a service, one can start to understand how a service is currently performing. In service organisations, there are two types of demand: value demand and ‘failure demand’. Failure demand is “demand caused by a failure to do something or do something right for the customer” (Seddon 2003 p26). The industrialisation of services creates failure demand; often failure demand into services can run as high as 80% or more of the total demand. It is understood that things will always go wrong. Understanding 5.08 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 what is going wrong predictably leads to productive action – only predictable failure demand is preventable (Seddon 2009). Studying value demand enables services to be designed from the users’ point of view, enabling the user to ‘pull value’ – to get what they want. In that way, service improves as costs fall. It is the system that accounts for performance It is as Deming taught: 95% of variation in performance is due to the 95% of variation in performance is due to the system (Deming 1982). system (Deming 1982). This shows the futility of managing workers’ activity and re-focuses management on their responsibility to design a system that delivers what customers need. This shows the futility of managing workers’ Any failure to absorb variety will drive up costs activity An important feature of transactional services is the variety of demands they experience from their customers. Front-office/back-office splits (the common practice of separating the customer-facing part of an organisation from its back-office functions such as HR or IT departments in order to run the back-office like a production-line), specialisation of work and standardisation of work are all tactics which prevent services from absorbing variety and thus implementing these measures drives up overall costs (Middleton 2010). Systems thinkers set out to design a system to absorb the variety of customer demands. The correct approach is to train workers against demand, to put them in control of their work – doing it as well as improving it – and to design management roles that are complementary to the work, where action is required on the system. Argyris and Schön’s concepts of single- and What can be done to create learning organizations? double-loop learning Returning to the question of how we create more of Senge’s ‘learning explain how a command organizations’, it is our contention that it is the command and control and control outlook ‘prevailing system of management’ which prevents organisations from prevents managers from creating generative learning. Senge’s work does not tackle the subject of learning and improving how to overcome these dominant command and control management assumptions. Argyris and Schön’s concepts of single- and double-loop learning explain how a command and control outlook prevents managers 5.09 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 from learning and improving. Distinguishing between single- and doubleloop learning, Argyris explains that: “Single-loop learning occurs when matches are created, or when mismatches are corrected by changing actions. Double-loop learning occurs when mismatches are corrected by first examining and altering the governing variables and then the actions.” (Argyris 1999 p68) Command and control managers are trapped in the single-loop, never questioning their faulty governing variables. Systems thinking allows for double-loop learning. Helpfully, Argyris has also written about how to practically intervene to create double-loop learning: “Research on intervention suggests that it is possible to help individuals learn new theories-in-use and to create new learning systems. The intervention requires the creation of a dialectical learning process where the participants can continually compare their theories-in-use, and the learning system in which they are embedded, with alternative models. This requires that interventionists make available alternative models with significantly different governing values and behavioural strategies.” (Argyris 1999, p90) By recognising that there is a system of interaction which underpins one’s actions, it is possible to change and in the process become more open and self-aware. Seddon and Caulkin describe this process as the need to ‘unlearn’ before one can ‘learn’ the new way that a system should work, in “Systems thinking is only an ‘emergent, adaptive’ approach to change. truly learned by doing, by action learning: it is only “Systems thinking is only truly learned by doing, by action learning: it is by doing that managers only by doing that managers can unlearn, can find out for themselves can unlearn, can find out where their current beliefs about the design and management of work are for themselves where flawed, in order to put into place something that works systematically their current beliefs about better, and can systemically be further improved” (Seddon and Caulkin the design and 2007) management of work are flawed Elsewhere, Seddon has written about the practical method for studying and then redesigning a service (Seddon 2003). It is the authors’ belief 5. 10 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 that attempts to create learning organisations which do not challenge the status quo of command and control will prevent the double-loop, generative learning which is an essential ingredient for continuous improvement: it is necessary for managers to unlearn before being able to learn a better way. The link between Thinking, System and Performance Within all organisations, we posit that there is a systemic relationship between the underlying thinking of the managers, the ability of the system to improve and performance to the end user. The ‘thinking’ of managers, as architects of their organisational systems, needs to be capable of double-loop learning if the goal of creating a learning organization is to be achieved (as illustrated in figure 5). Management Thinking System Performance Fig 5: The relationship between the thinking of management, the system and its performance (Seddon 2003 p10) In this analysis, it is critical that managers are able to make the transition from the prevailing system of management to systems thinking. The assumptions of the command and control logic remain deeply ingrained within Western management culture, developed as they were to solve the problems of the early pioneers of mass production. In modern service organisations, we no longer face the same problems that these solutions In order to change this were created to solve (Seddon 2003). The basic precepts of command mindset, managers must and control have remained unquestioned whilst the underlying paradigm learn to study their has outlived its usefulness. The problem is not a general problem of organisation as a system culture, but more specifically is one of management thinking. In order to change this mindset, managers must learn to study their organisation as a system, and to understand the true nature of the problems facing them. 5. 11 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 A systems archetype for a learning organization In keeping with Senge’s ideas about archetypes, the authors have proposed a systems archetype for transactional service organisations which can be contrasted with the command and control factory archetype in Fig 2. Fig 6: The systems archetype for transactional service systems (Seddon, O’Donovan and Zokaei 2010) By understanding the demands that arrive at the organisation from customers, it is possible to train workers against the high frequency, predictable value demands (things we know we are going to get a lot of) that are hitting the system. The consequences are shortened training times (for example from eight weeks to two weeks in financial services) and more productive employment of the worker. When the worker receives a customer demand for which he or she is not trained, the required expertise is ‘pulled’ as needed. In this way worker training is directly related to the requirements of the work. The worker aims to achieve single piece flow (to deal with each demand as it enters the system right through to resolution for the customer, before beginning with another demand) or, if the work has to be handed on to a flow, then the worker is focussed on passing it ‘clean’: it must be in such a state that the next person has everything they need to take the next step. Workers are allowed to develop measures which relate to the customer’s purpose and given control over them (one-stop capability, measures of end-to-end flow) and they consequently have the latitude to experiment with and improve the work design. 5. 12 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 Training workers against demand and ensuring they are responsible for what they do is preventative (the better alternative to inspection for compliance with command and control targets and specifications). All arbitrary measures (standard times, cost, targets, standards) are removed from the system and instead real measures are used to help managers and workers alike understand and improve the work. It is better to know the actual time it takes to complete transactions as ‘one-stop’; this improves resource planning. Similarly it is better to know the true experience of the customer for any work that goes through a flow (end-toend time or on-time-as-required) in order to improve the flow and, consequently, reduce costs. There are many published examples of these principles in use including ODPM (2005), Jackson, Johnstone and Seddon (2007), Pyke (2008), McQuade (2008), Middleton (2010) and Zokaei et al (2010). The examples documented in these studies show that it is possible to create genuinely generative learning organizations. Conclusion At its heart, the above systems archetype (Fig 6) is concerned with designing against demand, managing value rather than cost and “… the key to the creation genuinely generating organisational learning. This is in contrast with the of learning organisations actions represented in the command and control service management comes from enabling archetype, mired as it is in dealing with the old ‘core paradigm’ problems. managers to “shift their We would conclude by reiterating that the key to the creation of learning minds’ organisations comes from enabling managers to ‘shift their minds’ – Senge’s ‘metanoia’ put into practice. Our argument is that Deming’s statements in his 1990 review of Senge’s work continue to hold true: it is the dominance of the command and control management thinking which, 20 years on, still prevails and prevents the development of more generative learning. It is only by studying an organisation as a system and creating double-loop learning that we might finally see Senge’s ‘learning organizations’ stop being the exceptional and instead become the norm. Bibliography Argyris C 1990 ‘Overcoming Organisational Defences: Facilitating Organisational Learning’ Prentice-Hall: New Jersey, US Argyris C 1999 ‘On Organisational Learning’ Blackwell Publishing: London 5. 13 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 Argyris, C and Schön, D 1974 ‘Theory in practice: Increasing professional effectiveness’ Jossey-Bass: San Francisco Chandler AD 1977 ‘The Visible Hand’ Belknap Press: London Deming W E 1982 ‘Out of the Crisis’ MIT Press: Massachusetts Ford, H 2003 ‘Today and Tomorrow’ Productivity Press. Cambridge, MA. First published 1926. Fortune 3/7/1989, quoted in Senge, P 1990 ‘The Leader’s New Work: Building Learning Organizations’ Sloan Management Review, Fall 1990, Vol 32, no 1 Jackson, M, Johnstone, N and Seddon, J 2007 ‘Evaluating Systems Thinking in Housing’ Journal of the Operational Research Society no 59, 186–197 McQuade, D 2008 ‘Leading Lean Action to Transform Housing Services’ in Public Money and Management Vol 28 no 1 Office of the Deputy Prime Minister (ODPM) 2005 ‘A Systematic Approach to Service Improvement Evaluating Systems Thinking in Housing’ ODPM publications: London. Pyke, W 2008 ‘Is performance personal or in the system? ’ Management Services, Winter 2008, Vol. 52 Issue 4, p40-47 Scholtes, PR 1998 ‘The leader's handbook: making things happen, getting things done’ McGraw-Hill, London Seddon J 2003 ‘Freedom from Command and Control’ Vanguard Press: Buckingham Seddon J 2008 ‘Systems Thinking and the Public Sector’ Triarchy; Axminster Seddon, J 2009 ‘Failure Demand – from the horse’s mouth’ Customer Strategy Issue 1, Vol 2 Winter 2009 pp 33-34 Seddon J, O’Donovan B and Zokaei 2010 ‘Rethinking Lean Service’ Chapter for Warwick Business School textbook (forthcoming) Seddon J and Caulkin S 2007 ‘Systems thinking, lean production and action learning’ in Action Learning Research and Practice Vol 4 No.1 April 2007, special issue: ‘Lean Thinking and Action Learning.’ Senge, P 2006 ‘The Fifth Discipline’ Random House Business Books. Senge, P 1990 ‘The Leader’s New Work: Building Learning Organizations’ Sloan Management Review, Fall 1990, Vol 32, no 1 Taylor: FW 1998 ‘The Principles of Scientific Management’ Dover Publications: New York. First published in 1911 Zokaei Z, Elias S, O’Donovan B, Samuel D, Evans B and Goodfellow J 2010 ‘Lean and Systems Thinking in the Public Sector in Wales’ Lean Enterprise Research Centre report for the Wales Audit Office, Cardiff University 5. 14 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 Biographical Note John Seddon is an occupational psychologist who began his career researching the reasons for failures of major change programmes. Based on what he learned he developed his own methods for change, which he describes as a combination of systems thinking - how the work works and intervention theory - how to change it. He is a Visiting Professor at Cardiff and Derby Universities and author of ‘Freedom from Command and Control’ (2003). Email: John@vanguardconsult.co.uk Brendan O’Donovan is Head of Research at Vanguard Consulting, and has recently completed an MSc in Operations Management at Cardiff University. Email: Brendan@vanguardconsult.co.uk 5. 15 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 Why aren’t we all working for Learning Organisations? Professor John Seddon and Brendan O’Donovan © AMED 2010. ISSN 2042 – 9797. Copyright of this e-Organisations and People journal remains jointly with The Association for Management Education and Development and with the author(s). However, you may freely print or download articles to a local hard disk, provided they are for your personal and non-commercial use only. Please ensure that you acknowledge the original source in full using the following words ‘This article first appeared in eOrganisations and People Vol 17 No 2 in May 2010, and is reproduced by kind permission of AMED www.amed.org.uk. For permission to reproduce article(s) from this journal more widely, please contact the AMED Office: amedoffice@amed.org.uk, +44 (0) 1480-459-575. The views expressed in this journal by both editorial staff and contributors are not those of AMED or any of the organisations represented by the editors, but reflect the opinions of the individual authors only. ____________________________________________________________________________________________________________ e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 www.amed.org.uk Why aren’t we all working for learning organisations? Professor John Seddon and Brendan O’Donovan Abstract Revisiting Peter Senge’s work ‘The Fifth Discipline’ twenty years on, the authors reflect on why there are not more ‘learning organisations’ around us. They conclude that W Edwards Deming’s critique of Western management practices apply as equally to Senge’s ideas as they do to those of other theorists. By using Argyris’s model of ‘Double-Loop Learning’, the authors suggest a way for managers to switch from a ‘command and control’ to a ‘systems thinking’ mindset in order to achieve genuine organisational learning. Keywords: Senge, Seddon, systems thinking, learning organization, double-loop learning. In Peter Senge’s best-seller The Fifth Discipline (Senge, 1990), he popularised the idea of the ‘learning organization’. In the book, Senge defined learning organisations as: “… organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.” (Senge 2006 p3) Learning in this context has a specific meaning for Senge, which he terms ‘metanoia’, a Greek word meaning ‘a shift of mind’. A learning organisation is therefore: “… an organization that is continually expanding its capacity to create its future. “For such an organization, it is not enough merely to survive. ‘Survival learning’ or what is more often termed ‘adaptive learning’ is important 5.01 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 indeed it is necessary. But for a learning organization, ‘adaptive learning’ “For … an organization, it is not enough merely to must be joined by ‘generative learning,’ learning that enhances our capacity to create.” (Senge 2006 p14) survive. ‘Survival learning’ … must be Getting organisations to ‘shift their minds’ in order to produce both joined by ‘generative adaptive and generative learning was the intent of Senge’s work twenty learning,’ learning that years ago. Fortune magazine went as far as predicting that “the most enhances our capacity to successful corporation of the 1990s will be something called a learning create.” organization, a consummately adaptive enterprise.” (Fortune 1989, in Senge 1990). So why is it that these predictions do not appear to have materialised in 2010? Why do we not see examples of learning organisations all around us? We believe that the biggest clue as to why we are not all ‘learning organizations’ was given by W Edwards Deming, one of the original reviewers of the book back in 1990. As Senge commented after reading Deming’s review, he “slowly started to realize (Deming) had unveiled a deeper layer of connections, and a bigger task, than I (Senge) had previously understood” (Senge 2006 p x). Deming’s review said: “Our prevailing system of management has destroyed our people. People are born with intrinsic motivation, self-respect, dignity, curiosity to learn, joy in learning. The forces of destruction begin with toddlers – a prize for the best Halloween costume, grades in school, gold stars – and on up through the university. On the job people, teams, and divisions are ranked, reward for the top, punishment for the bottom. Management by Objectives, quotas, incentive pay, business plans, put together separately, division by division, cause further loss, unknown and unknowable.” (Deming in Senge 2006) It is our contention that Senge’s work did not tell managers how to tackle this “deeper layer of connections” that was necessary before they could become a ‘learning organization’. However, a combination of the works of Chris Argyris (Argyris 1999) on intervention theory and Deming’s own 5.02 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 systems perspective on management can provide us with a way forward. We will go on to explain this in more detail, and also to present a systems archetype for managing a generative transactional service. Command and control: the prevailing system of management One of the authors of this article (John Seddon) has worked extensively with service organisations and has developed his own term for the elements of Deming’s “prevailing system of management”. Seddon and Caulkin have defined ‘command and control’ management thus: “Command and control means regulation by management, with its battery of computer and other informational aids … where decision-making is distant from the work and based on abstracted measures, budgets and plans” (Seddon and Caulkin 2007 p12) “Command and control Command and control ideas have their roots in Taylorism (Taylor 1998 - means regulation by first published 1911) and the mass production innovations of Henry Ford management, with its (Ford 2003 - first published 1926) and Alfred Sloan (Chandler 1977). battery of computer and Command and control thinking continues to see organisations as top- other informational aids … down hierarchies, where work is designed in functions, managers make where decision-making is decisions and workers do the work. distant from the work and based on abstracted Managers make decisions using budgets, targets, standards; they seek to measures, budgets and control the workers with a variety of management practices: procedures, plans” rules, specifications, inspection and so on. The management ethic is to manage budgets and manage people. These features of a ‘command and control’ mindset manifest themselves in service organisations as an obsession with managing the activity of workers. This has been characterised as forming the ‘Core Paradigm’ for conventional service management (Seddon2008) and consists of three questions which preoccupy managerial decision-making in transactional service organisations such as financial services, telecommunications, IT services, police, local authority, government agencies and housing services.: • How much work is coming in? • How many people have I got? • How long do they take to do things? In this dominant management paradigm, managers think of their job as a 5.03 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 resource-management problem. It leads managers to do the following types of things in pursuit of improving service operations: • Reduce average activity time (through procedures, job aids, call coaching and targets) • Use I.T. to replace, support or control the service agent • Outsource activity to lower-cost organisations/economies • Increase functional specialisation (to reduce training costs) • Standardise work processes • Put similar work into back-office factories These are all examples of what Argyris and Schön would call the actions of a manager going through ‘single-loop learning’ (Argyris and Schön 1974). For Argyris and Schön, single-loop learning involves improving incrementally through learning new skills or capabilities, with managers perhaps learning to do something better but without challenging the underlying beliefs and assumptions behind their problems (see Fig 1). In Senge’s language, this is what he describes as ‘adaptive’ learning (Senge 2006 p14). Fig 1: Single-loop learning (from Argyris 1990 p92) So, the problem as it is conceived by managers in the ‘Core Paradigm’ is Managers assume that people need to be commanded and controlled how best to manage activity. Managers assume that people need to be commanded and controlled (Seddon 2003). Scripts, procedures, targets, standards, inspection and compliance govern the way that these organisations work. The managerial tactics listed above are all essentially concerned with managing cost. For example, a call centre manager might be tasked with reducing costs in line with an enforced efficiency target dictated higher up the hierarchy. In order to do this, he/she might decide to focus on service levels: how long it takes an operator to pick up the telephone. Also, by imposing a standard time on calls, the manager may 5.04 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 think that calls will be cheaper. But when the manager is then unexpectedly faced with rising costs due to rising ‘failure demand’ (Seddon 2003) as explained in greater detail below, he/she might decide to impose scripts on the workers. When this is equally unsuccessful, the manager may enforce greater inspection of work to ensure the workers are complying with the scripts, so as to ensure they reduce the time taken per call. We see that managers become further and further entrapped in the core paradigm described above, where their focus becomes fixed on making the worker work harder. The manager becomes ensnared in ‘single-loop’ learning, unable to see the deeper assumptions beneath their actions. Senge represented many of his ideas in a series of systems archetypes, saying that “the template shows the basic structural form of the archetype but lets managers fill in the variables of their own situation” (Senge 1990 p17). We have represented the command and control view of service work as an archetype: All demand is treated as Sort by type Queue ‘work to be done’ Inspect Work to standard time Key measures: Activity and cost Fig 2: Command and control archetype for factory service management This archetype is a high-level representation. In practice, service organisations are much more complex but the complexities, nevertheless, follow this quintessential logic. Managers schedule resources according to the volumes of work coming into the system. Usually, the first step in the flow is to ‘sort’ the work by, for example, using interactive voice response [IVR] systems in telephony (“press 1 for x, 2 for y”) and with incoming mail the work is typically scanned and sorted into pre-determined electronic work queues, often breaking one customer 5.05 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 demand into a variety of sub-tasks, allocating each to its own queue. When work is done it is managed by ‘standard times’, the assumed time it takes to complete each task and resources are devoted to inspection to control the output to the customer. Often a customer demand into such a “… most possibilities for system is fragmented into many sub-tasks and consequently the flow of improvement add up to work crosses functional, organisational and geographic boundaries. For proportions something like managers imprisoned by what Deming called the “prevailing system of this: 94% belong to the management”, efficiency is assumed to be associated with controlling the system (responsibility of costs of activities. management) 6% special.” Deming’s insight: focus on the system The assumption is mistakenly being made that performance is all about people and their activity. It is, as Deming pointed out, to focus on the wrong things: “The fact is that the system that people work in and the interaction with people may account for 90 or 95 percent of the performance” (Deming, in Scholtes 1998 p296) “I should estimate that in my experience most troubles and most possibilities for improvement add up to proportions something like this: 94% belong to the system (responsibility of management) 6% special.” (Deming 1994 p xv) To escape this organisational prison, Deming instead advocated that management’s focus ought to be with the flow of work through the broader organisational ‘system’, rather than measuring and managing work in functional activities. Operating at this ‘system’ level achieves far more than focussing on the refinement of individual functions and/or processes. His famous “Figure 1” – a picture capturing the flow of work through a manufacturing organisation – became notorious because it was often the only visual aid he would use to orientate his post-war Japanese audiences as to what to pay attention to when considering their work as leaders. He believed that constancy of purpose to improve the system should be the cornerstone of management’s efforts; his figure served also to provoke 5.06 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 discussions of what the suitable method and measures of achievement of purpose should be. Figure 3: Deming’s famous “Fig 1 diagram” Production viewed as a system” (Deming 1982 p4) Counter-intuitive truths When one learns how to apply this key Deming insight (study organisations as systems), certain counter-intuitive truths are discovered. The industrialisation of services is the result of the management of workers’ activity which, as we have already discussed, is based on the assumption that activity equals cost. Moving work to call centres, the separation of front-office tasks from the back-office ‘factory’, the specialisation of tasks and the standardisation of work are all Paradoxically, one management activities driven by this basic belief in the need to manage discovers that the activity as cost. Paradoxically, one discovers that the consequence of consequence of … focus service managers’ focus on costs is that they inadvertently drive costs up: on costs is that they the number of steps it takes for a customer to get their demand satisfied inadvertently drive costs increases, with each unnecessary step adding extra costs to the up organisation and causing greater customer dissatisfaction (the “unknown and unknowable” costs Deming referred to in his book review). The process of realisation that comes with the discovery of such counterintuitive truths marks the first step for service managers towards what Argyris and Schön call ‘double-loop learning’(Argyris and Schön 1974). Double-loop learning goes further than single-loop learning by reshaping 5.07 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 the patterns of thinking and behaviour which govern why actions are taken (see Fig 4). We believe that double-loop learning is a necessary condition for the development of what Senge called ‘generative learning’ and thus essential in the progression towards becoming a ‘learning organization’. Fig 4 Double-loop learning (from Argyris 1990 p94) … managers must study their workplace and understand the underlying causes of the problems that they have, instead of For double-loop learning to take place, managers must study their workplace and understand the underlying causes of the problems that they have, instead of jumping to their well trodden, ‘core paradigm’-based solutions. Only in this way can the ‘governing variables’ behind their actions be surfaced and subsequently altered. jumping to their well trodden, ‘core paradigm’based solutions Managers find that studying services as systems often reveals other similar counter-intuitive truths: Demand is the greatest lever for improvement By measuring the type and frequency of demands into a service, one can start to understand how a service is currently performing. In service organisations, there are two types of demand: value demand and ‘failure demand’. Failure demand is “demand caused by a failure to do something or do something right for the customer” (Seddon 2003 p26). The industrialisation of services creates failure demand; often failure demand into services can run as high as 80% or more of the total demand. It is understood that things will always go wrong. Understanding 5.08 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 what is going wrong predictably leads to productive action – only predictable failure demand is preventable (Seddon 2009). Studying value demand enables services to be designed from the users’ point of view, enabling the user to ‘pull value’ – to get what they want. In that way, service improves as costs fall. It is the system that accounts for performance It is as Deming taught: 95% of variation in performance is due to the 95% of variation in performance is due to the system (Deming 1982). system (Deming 1982). This shows the futility of managing workers’ activity and re-focuses management on their responsibility to design a system that delivers what customers need. This shows the futility of managing workers’ Any failure to absorb variety will drive up costs activity An important feature of transactional services is the variety of demands they experience from their customers. Front-office/back-office splits (the common practice of separating the customer-facing part of an organisation from its back-office functions such as HR or IT departments in order to run the back-office like a production-line), specialisation of work and standardisation of work are all tactics which prevent services from absorbing variety and thus implementing these measures drives up overall costs (Middleton 2010). Systems thinkers set out to design a system to absorb the variety of customer demands. The correct approach is to train workers against demand, to put them in control of their work – doing it as well as improving it – and to design management roles that are complementary to the work, where action is required on the system. Argyris and Schön’s concepts of single- and What can be done to create learning organizations? double-loop learning Returning to the question of how we create more of Senge’s ‘learning explain how a command organizations’, it is our contention that it is the command and control and control outlook ‘prevailing system of management’ which prevents organisations from prevents managers from creating generative learning. Senge’s work does not tackle the subject of learning and improving how to overcome these dominant command and control management assumptions. Argyris and Schön’s concepts of single- and double-loop learning explain how a command and control outlook prevents managers 5.09 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 from learning and improving. Distinguishing between single- and doubleloop learning, Argyris explains that: “Single-loop learning occurs when matches are created, or when mismatches are corrected by changing actions. Double-loop learning occurs when mismatches are corrected by first examining and altering the governing variables and then the actions.” (Argyris 1999 p68) Command and control managers are trapped in the single-loop, never questioning their faulty governing variables. Systems thinking allows for double-loop learning. Helpfully, Argyris has also written about how to practically intervene to create double-loop learning: “Research on intervention suggests that it is possible to help individuals learn new theories-in-use and to create new learning systems. The intervention requires the creation of a dialectical learning process where the participants can continually compare their theories-in-use, and the learning system in which they are embedded, with alternative models. This requires that interventionists make available alternative models with significantly different governing values and behavioural strategies.” (Argyris 1999, p90) By recognising that there is a system of interaction which underpins one’s actions, it is possible to change and in the process become more open and self-aware. Seddon and Caulkin describe this process as the need to ‘unlearn’ before one can ‘learn’ the new way that a system should work, in “Systems thinking is only an ‘emergent, adaptive’ approach to change. truly learned by doing, by action learning: it is only “Systems thinking is only truly learned by doing, by action learning: it is by doing that managers only by doing that managers can unlearn, can find out for themselves can unlearn, can find out where their current beliefs about the design and management of work are for themselves where flawed, in order to put into place something that works systematically their current beliefs about better, and can systemically be further improved” (Seddon and Caulkin the design and 2007) management of work are flawed Elsewhere, Seddon has written about the practical method for studying and then redesigning a service (Seddon 2003). It is the authors’ belief 5. 10 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 that attempts to create learning organisations which do not challenge the status quo of command and control will prevent the double-loop, generative learning which is an essential ingredient for continuous improvement: it is necessary for managers to unlearn before being able to learn a better way. The link between Thinking, System and Performance Within all organisations, we posit that there is a systemic relationship between the underlying thinking of the managers, the ability of the system to improve and performance to the end user. The ‘thinking’ of managers, as architects of their organisational systems, needs to be capable of double-loop learning if the goal of creating a learning organization is to be achieved (as illustrated in figure 5). Management Thinking System Performance Fig 5: The relationship between the thinking of management, the system and its performance (Seddon 2003 p10) In this analysis, it is critical that managers are able to make the transition from the prevailing system of management to systems thinking. The assumptions of the command and control logic remain deeply ingrained within Western management culture, developed as they were to solve the problems of the early pioneers of mass production. In modern service organisations, we no longer face the same problems that these solutions In order to change this were created to solve (Seddon 2003). The basic precepts of command mindset, managers must and control have remained unquestioned whilst the underlying paradigm learn to study their has outlived its usefulness. The problem is not a general problem of organisation as a system culture, but more specifically is one of management thinking. In order to change this mindset, managers must learn to study their organisation as a system, and to understand the true nature of the problems facing them. 5. 11 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 A systems archetype for a learning organization In keeping with Senge’s ideas about archetypes, the authors have proposed a systems archetype for transactional service organisations which can be contrasted with the command and control factory archetype in Fig 2. Fig 6: The systems archetype for transactional service systems (Seddon, O’Donovan and Zokaei 2010) By understanding the demands that arrive at the organisation from customers, it is possible to train workers against the high frequency, predictable value demands (things we know we are going to get a lot of) that are hitting the system. The consequences are shortened training times (for example from eight weeks to two weeks in financial services) and more productive employment of the worker. When the worker receives a customer demand for which he or she is not trained, the required expertise is ‘pulled’ as needed. In this way worker training is directly related to the requirements of the work. The worker aims to achieve single piece flow (to deal with each demand as it enters the system right through to resolution for the customer, before beginning with another demand) or, if the work has to be handed on to a flow, then the worker is focussed on passing it ‘clean’: it must be in such a state that the next person has everything they need to take the next step. Workers are allowed to develop measures which relate to the customer’s purpose and given control over them (one-stop capability, measures of end-to-end flow) and they consequently have the latitude to experiment with and improve the work design. 5. 12 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 Training workers against demand and ensuring they are responsible for what they do is preventative (the better alternative to inspection for compliance with command and control targets and specifications). All arbitrary measures (standard times, cost, targets, standards) are removed from the system and instead real measures are used to help managers and workers alike understand and improve the work. It is better to know the actual time it takes to complete transactions as ‘one-stop’; this improves resource planning. Similarly it is better to know the true experience of the customer for any work that goes through a flow (end-toend time or on-time-as-required) in order to improve the flow and, consequently, reduce costs. There are many published examples of these principles in use including ODPM (2005), Jackson, Johnstone and Seddon (2007), Pyke (2008), McQuade (2008), Middleton (2010) and Zokaei et al (2010). The examples documented in these studies show that it is possible to create genuinely generative learning organizations. Conclusion At its heart, the above systems archetype (Fig 6) is concerned with designing against demand, managing value rather than cost and “… the key to the creation genuinely generating organisational learning. This is in contrast with the of learning organisations actions represented in the command and control service management comes from enabling archetype, mired as it is in dealing with the old ‘core paradigm’ problems. managers to “shift their We would conclude by reiterating that the key to the creation of learning minds’ organisations comes from enabling managers to ‘shift their minds’ – Senge’s ‘metanoia’ put into practice. Our argument is that Deming’s statements in his 1990 review of Senge’s work continue to hold true: it is the dominance of the command and control management thinking which, 20 years on, still prevails and prevents the development of more generative learning. It is only by studying an organisation as a system and creating double-loop learning that we might finally see Senge’s ‘learning organizations’ stop being the exceptional and instead become the norm. Bibliography Argyris C 1990 ‘Overcoming Organisational Defences: Facilitating Organisational Learning’ Prentice-Hall: New Jersey, US Argyris C 1999 ‘On Organisational Learning’ Blackwell Publishing: London 5. 13 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 Argyris, C and Schön, D 1974 ‘Theory in practice: Increasing professional effectiveness’ Jossey-Bass: San Francisco Chandler AD 1977 ‘The Visible Hand’ Belknap Press: London Deming W E 1982 ‘Out of the Crisis’ MIT Press: Massachusetts Ford, H 2003 ‘Today and Tomorrow’ Productivity Press. Cambridge, MA. First published 1926. Fortune 3/7/1989, quoted in Senge, P 1990 ‘The Leader’s New Work: Building Learning Organizations’ Sloan Management Review, Fall 1990, Vol 32, no 1 Jackson, M, Johnstone, N and Seddon, J 2007 ‘Evaluating Systems Thinking in Housing’ Journal of the Operational Research Society no 59, 186–197 McQuade, D 2008 ‘Leading Lean Action to Transform Housing Services’ in Public Money and Management Vol 28 no 1 Office of the Deputy Prime Minister (ODPM) 2005 ‘A Systematic Approach to Service Improvement Evaluating Systems Thinking in Housing’ ODPM publications: London. Pyke, W 2008 ‘Is performance personal or in the system? ’ Management Services, Winter 2008, Vol. 52 Issue 4, p40-47 Scholtes, PR 1998 ‘The leader's handbook: making things happen, getting things done’ McGraw-Hill, London Seddon J 2003 ‘Freedom from Command and Control’ Vanguard Press: Buckingham Seddon J 2008 ‘Systems Thinking and the Public Sector’ Triarchy; Axminster Seddon, J 2009 ‘Failure Demand – from the horse’s mouth’ Customer Strategy Issue 1, Vol 2 Winter 2009 pp 33-34 Seddon J, O’Donovan B and Zokaei 2010 ‘Rethinking Lean Service’ Chapter for Warwick Business School textbook (forthcoming) Seddon J and Caulkin S 2007 ‘Systems thinking, lean production and action learning’ in Action Learning Research and Practice Vol 4 No.1 April 2007, special issue: ‘Lean Thinking and Action Learning.’ Senge, P 2006 ‘The Fifth Discipline’ Random House Business Books. Senge, P 1990 ‘The Leader’s New Work: Building Learning Organizations’ Sloan Management Review, Fall 1990, Vol 32, no 1 Taylor: FW 1998 ‘The Principles of Scientific Management’ Dover Publications: New York. First published in 1911 Zokaei Z, Elias S, O’Donovan B, Samuel D, Evans B and Goodfellow J 2010 ‘Lean and Systems Thinking in the Public Sector in Wales’ Lean Enterprise Research Centre report for the Wales Audit Office, Cardiff University 5. 14 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2 Biographical Note John Seddon is an occupational psychologist who began his career researching the reasons for failures of major change programmes. Based on what he learned he developed his own methods for change, which he describes as a combination of systems thinking - how the work works and intervention theory - how to change it. He is a Visiting Professor at Cardiff and Derby Universities and author of ‘Freedom from Command and Control’ (2003). Email: John@vanguardconsult.co.uk Brendan O’Donovan is Head of Research at Vanguard Consulting, and has recently completed an MSc in Operations Management at Cardiff University. Email: Brendan@vanguardconsult.co.uk 5. 15 ____________________________________________________________________________________________________________ www.amed.org.uk e-ORGANISATIONS & PEOPLE, MAY 2010, VOL 17. NO 2
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Running Head: THE BENEFITS OF RUNNING ONE’S OWN SMALL BUSINESS

THE BENEFITS OF RUNNING ONE’S OWN SMALL BUSINESS
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THE BENEFITS OF RUNNING ONE’S OWN SMALL BUSINESS

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Introduction.
Leaving Your Career To Start Your Own Small Business.
The main reason someone attends school is to acquire good grades that would enable him
to join some of the best colleges. In college he or she strives to graduate with honors. They
eventually get employed in some prestigious firm with a prestigious pay with some very good
benefits. Things are smooth and most people are always content working for someone else but
some people realize that there is something missing in their lives. It is at this point that they
decide to leave their well-paying career and embark on a small private business.
Running your own business, no matter how small it is allows you to be your own
employer rather than a corporate employee (Graham, 2011). One becomes his own boss and he
acquires employees who do the tasks that are required. Running one’s own business comes with
power to execute a business plan to one’s own liking. The business is the sole responsibility of
the entrepreneur and whether it flourishes or fail is up to him or her. This sense of responsibility
brings out the best in people and someone who was a lazy employee all of a sudden becomes
motivated and determined.
The potential income from running one’s own business cannot be understated (Kane,
2011). Leaving a well-paying job that comes with a steady income to run a business can be a
pretty daunting task. This is because regular income is not a guarantee. To avoid such
uncertainties one should carry out a proper market survey to determine the trends and market
structure in his field of interest. In this way, he will be prepared for such uncertainties. This is
not to dismiss the fact that there is a lot of money to be made in running a...


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