Class Struggles
Best in Class! How often do we run into the term? I believe it’s a term that has lost much meaning. I suspect that overuse, or selective playing around with what “class” we pick, or the unreliability of rating organizations render it useless too often. In the world or process improvement it is applied to a goal setting step for evaluating how large a gap there is to close and subsequently chartering projects and resources to close that gap. There are some pitfalls to the approach:
• If the “class” we are selecting as a benchmark is a poorly performing one, we may be aiming at becoming the “best of the worst” or “the cream of the crap”.
• If becoming best in class for a unit within an organization does nothing to positively impact the performance of the total organization, we may be investing in meaningless improvement.
• The goal may become obsessive, a powerful distraction, directing attention and resources away from value adding opportunities.
• The customer, shareholder, or taxpayer does not benefit.
The last bullet is very important. Most organizations are not created with a primary purpose to have functions, departments, employees, IT systems, training centers, enterprise applications, procurement groups, or resources of any kind. That’s not why enterprises exist.
• If they are commercial organizations, they exist to deliver goods and services that financially profit so that they can earn the trust of their investors through returns. Yep, they are around to make money. The best ones do it legally, ethically, with respect to all stakeholders, no adverse externalities, and with a vision to create new value. They deliver value to customers and returns to investors.
• If they are a public service organization, they exist to fulfill a mission to deliver beneficial outcomes to their stakeholders (taxpayers and public at large). The best ones are effective, efficient, ethical, agile, focused on delivering benefits and positive societal outcomes, responsive to their public, and transparent. They spend public funds and deliver positive and beneficial outcomes.
• Purpose is fulfilled when value is delivered. There is a value stream that threads what delivers value and it provides the ruler with which to measure what is appropriate or lacking.
So, resources, systems, functions, departments, assets …, within the organization should exist and operate in order for the organization to thrive. That means that goals for units or entities within the organization have real value and legitimacy to the extent that they can verifiably contribute to the organization’s value proposition. Of course, this is unlikely since significant waste abounds and gaps in performance are forever with us.
The issue is not whether to improve or not. The question is how much, by whom, and to what ends. Where should we set the bar? How good is the good we should be? In a relay race, how would we decide where to focus our efforts? How do we create the appropriate focus, discipline and follow-through? Of course, most groups aspire to be the best at what they do, but unfortunately, it is overly focused on only what they do. It would be tragic, if not ridiculous, to claim success within a unit where the organization or enterprise is tanking. Our operation was successful, but the patient died.
Thoughts?
