Every kind of organization aspires to achieve its goal with increasing effectiveness. In order to do so, it has to do two fundamental things:
It has to grow because every living organism is either growing or its dying.
It has to innovate because the reality it interacts with is constantly evolving.
To make matters more complicated, the way in which this evolution comes about is not always predictable. This means that the organization is constantly investing time and energy trying to adapt to the stimuli that come from the outside world as they crop up.
So on the one hand, organizations are busy trying to grow and innovate to keep up. But on the other hand, in order to achieve its goal with increasing effectiveness an organization has to preserve its own identity and capitalize on all that it has created in the past (legacy).
Trying to really understand the effects that the changes in the outside world have on our organization and how this happens is a difficult, sometimes impossible task. So what happens? People within the system react by resisting change and sticking to their own positions.
We then find ourselves in an impasse generated by very deep and consolidated mental models (assumptions) that we can verbalize as follows:
1. The factors that really limit our growth cannot be managed by us nor can they be overcome.
2. There is no body of knowledge, method or tools that allow us to grow while managing and directing change.
That’s why organizations get stuck and can’t see a way forward.
A solution for evolving organizations
Every organization everywhere that has any track record is stuck to some degree in this dilemma of grow and innovate versus preserving identity. However, there is an operational solution to emerge from this state of impasse. It began as an intuition based on solid theory provided by W. Edwards Deming and Dr. Eli Goldratt, then its validity was tested over 20 years on the field in very different sectors. We can summarize the solution as:
– understand the behaviour of the system and make it predictable;
– armed with this knowledge, decide where to put the factor that is limiting the performance of the system (the constraint) and manage it.
This operational solution is embodied within the management thinking, method and best practices of the Decalogue approach. The Decalogue is a system of knowledge based on science, psychology, and certain ethical pillars:
- self-determination in people;
- their responsibility towards themselves and the world;
- co-operation as a way of behaving which protects and satisfies the needs of all involved.
Understanding and managing a system/organization effectively requires determination, knowledge and continuous practice. When these prerequisites are met, then an organization gains the ability to determine its own path through inevitable change and to generate value over time for all the stakeholders involved.
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About the Author
Angela Montgomery Ph.D. is the author of the business novel+ website The Human Constraint. This downloadable novel uses narrative to look at how the Deming approach and the Theory of Constraints can create the organization of the future, based on collaboration, network and social innovation. Angela is partner and co-founder of Intelligent Management and co-author with Dr. Domenico Lepore, founder, and Dr. Giovanni Siepe of ‘Quality, Involvement, Flow: The Systemic Organization’ from CRC Press, New York.