TWU Paradigm Book

The Changing Paradigm

The Changing Paradigmis a publication of Texas Woman’s University School of Management.

Table of Contents

The Changing Consumer Paradigm .............................. 1

The Changing Management Paradigm ........................ 17

The Changing Organization Paradigm ......................... 37

The Changing Leadership Paradigm ............................61

The Changing Planning Paradigm ................................77

The Changing Problem-Solving Paradigm ...................93

The Changing Decision Making Paradigm .................109

The Changing Consumer Paradigm

“The customercan have any color

he wants so long as it’s black.”

– Henry Ford

2

Today’s savvy consumer wouldn’t appreciate this take-it-or-leave-it attitude.

The Model T rolled off the assembly line at the rate of one about every twenty-four seconds. Mass production facilitated the delivery of the goods but adaptation lagged.

3

Mass production has created an explosion of choice worldwide.

Progress in Management

4

The More Choices the Better

The proliferation of products, models, and styles shouldn’t be dismissed as extravagance — it improves the customers’ standard of life.

5

Mass customizing is the ability to simultaneously

mass-produce, distribute, and deliver

customized goods and services.

The rich have always enjoyed the luxury of custom made products.

Now personalized goods and services are increasingly available

within the budgets of the middle class.

The Phenomenon of Mass Customization

6

Produce the right stuff

Variety, an imperfect substitute for customization, represents the producer’s best guess about what consumers will buy — mass production’s response to the fact that tastes differ.

Customization eliminates the need for guesswork. Output and productivity aren’t the goal — offering the customer satisfaction is!

Mass Production Mass CustomizationProduce more stuff

7

The right stuff includes more of what we do

want — products and services customized to

our particular tastes.

What is the Right Stuff?

The Right Stuff increases8

More of the Right Stuff means less of the Wrong Stuff!

... treatment with immunity.

... repair with better design.

... danger with safety measures.

The right stuff also

includes less of

what we don’t want

— brought about by

preventative products

such as vaccines,

childproof caps, and

safety gear.

the quality of life. 9

Given the choice of

a standardized and

customized product at the

same price, which would

you choose?

As mass customization becomes part of everyday life, consumers will intuitively understand how it represents an improvement over

mass production.

10

Consumption Redefines Business TodayConsumers needs have broadened from the

concrete (food and clothing) to include the

abstract (insurance policies and travel). Customers

constantly redefine the products and services they

want and the forms in which they want them.

Many of today’s traditional industries find

themselves ill-suited for these new definitions

because they have perfected an inward-focus,

primarily based on efficiency and cost reduction. primarily based on efficiency and cost reduction.

11

Keys to the Future

Anticipation

Right time... Right place

Innovation

Creates true competitive advantage

Excellence

The base on which the future will be built

- Joel Barker, Futurist

12

Businesses Must Provide Real Value

Whatever customers want — they want more of it!

If they value low cost — they want it lower!

If they value convenience and speed — they want it easier and faster!

If they value state-of-the-art — they want the art pushed forward!

13

“I’d say if you have an organization and you are not moving toward customization on demand, you’ll have a competitor one day who will put you out of business.”— Alvin Toffler, Futurist

14

Mass Customization: There is no end in sight!

15

translucent fly sheetdivider - front(no printing)

translucent fly sheetdivider - back(no printing)

The Changing Management Paradigm

“We do have a productivity problem,

but there is nothing wrong with the

workforce.”

18

“Today’s need is for greater management productivity.”

~ Dr. W. Edwards Deming,the American whose work fathered

the Japanese productivity boom.

19

Productive employees are: • involved • committed • creative

... just like employees found everywherein effective business environments.

20

So, why is some workmanship sloppy and service poor?

The answer:

21

Managers Make the Difference

By rough estimates, fewer than 20% of today’s managers

manage in ways that encourage high productivity and

quality.

Productive managers know how to release the inherent

competence of people and bring this competence to bear

on the work that needs to be done. This is true, whether the

organization turns out hamburgers or technological marvels.

22

Managers Choose Diffusion or Focus

The creation of false complexities disables diffused organizations.• Scholasticism replaces common sense.• Formalism supersedes dexterity.• Organizational routines become tortuous.

Focused organizations produce more. The difference:• Simplify the work.• Simplify the management of the work.

23

Traits of Competent Management

• Positive

• Honest

• Involved

• Sense of partnership

• Provide growth opportunities

Competent managers believe the competency of most employees will generate high productivity — and they get what they expect.

24

Traits of Incompetent Management

• Distrustful

• Condescending

• Defensive

• Pessimistic

Incompetent managers perceive widespread incompetence and act accordingly — and they get what they expect.

25

Time for Change

Most managers accept that their operations must

change as fast as the environment they operate in

changes. If they do not, a gap will develop.

They will fall behind and eventually fail.

26

With old rules out the window, and with new management ideas and techniques appearing every day,the big question looms.

What works?

28

Survival and success depend on

Leadership.

But what will it take to be aneffective leader of the future?

29

Effective leaders provide directions not answers;no leader can have all the answers.

Smart leaders pose revealing questions that lead to genuine

innovations. This is especially true if diverse groups of people

answer them.

Effective leaders provide reasons for people to join an

organization, stay with that organization, and perform well.

They treat employees with respect and dignity, recognizing

everyone’s ability to do good work.

30

Effective leaders communicate value with their team members.

Valued team members concentrate on their work and not just on

keeping their jobs.

Effective leaders don’t blame; they learn.

No one knows the future—how a market will respond or whether a

new technology will work.

31

The best leaders get rid of self-imposed barriers.

The right mind-set is experimental—try, fail, learn, and try

again. The best teacher is always one’s own mistakes.

The best leaders hand out responsibility and not orders.

If all one does is give orders, then all one gets are order-

takers.

The best leaders protect their people from danger, but

expose them to reality. They help people see the world as

it is and not as they would like to see it.

32

Effective leaders are constantly getting ready for the future.

They maintain active training and educational programs. This

reduces the performance gap always present during periods of

change.

Great leaders recognize that even effective leaders are not

always in control.

But they are always in touch with their organizations. Most

importantly, they are always out in front.

33

Organizations need real leaders—not policy-manual

sleepwalkers. Leaders must develop more leaders. While the

outside world looks at financial results, the leaders must ensure

those results keep improving.

The keys to delivering hard performance are soft issues:

• How eager people are to learn

• How willing they are to make decisions

• How energized they are to act

Leadership sets the tone and influences behavior.

The Team with the Most and Best Leaders Wins!

35

The Changing Organization Paradigm

The fundamental mission of a business is

VALUE CREATION.Profit is a vital consequence of Value Creation — a result,but not a purpose.

38

To read a book,start at the beginning.

To run a business,start at the endand do everything possibleto reach it.

The most important job isthe one not being done!

39

Customers want products and services any time and businesses want to operate in real time.

Eliminating lag time will become the major focus of tomorrow’s managers.

Operations will be critical.Fancy pie-in-the-sky theorieswon’t work.

40

The Business Environment

• Glow with Achievement.

• Infuse the corporate atmosphere with Enthusiasm.

Conversely, organizations that seal their members up in airtight cubicles slip farther and farther behind their original growth potential.

Fortune first published their list of America’s 500 biggest firms in 1956. By 1996, only 29 firms on the first list still existed. Size does not guarantee continued success, but neither does a good reputation.

Organizations that develop effective internal processes…

41

“When the pace of changeoutside an organization

becomes greater than thepace of change inside the organization then the end

is near.”

- John R. Walter, chairman and CEOof RR Donnelley and Sons Company.

From THE CEO SERIES Business Leaders: Thought and Action.(http://wc.wustl.edu/csab/ceo/CEO08Walter.pdf)

The Truth about Organizing for the 21st Century

42

21st Century organizing is NOT:

• Brute-force flattening

• Cutting fat, downsizing

• Merely restructuring

21st Century organizing IS:

• Rejecting conventional wisdom

• Undoing the industrial revolution

• Transitioning to a service environment

43

Yesterday, building a better mousetrap would cause the

world to beat a path to your door. Today, you better have a

new one to replace it.

Sony introduces about 5, 000 new products a year. About 90%

of Miller’s revenues are from beers that didn’t exist a few

years ago.

Source The Digital Economy

44

Time-Based Strategy— bringing products

to market before competitors

When the ability to serve the market is equal,

the organization with lower throughput times will

require less overall investment.

Costs will be lower and operating margins higher.

Break-even time is the elapsed time between when

an idea arises and when it becomes capable of

generating net income.

45

Achieving high productivity and quality requires

a change in the fundamental processes that

compose an organization.

The key to competing is operational.

First, we must dismantle our operations.

Then, we must put them back together

in different ways to ensure long-term

competitiveness and profitability.

46

If we resist change,

others will grab our

customers; then

we become our

own worst enemy

(not the competition).

47

• Repeated mistakes

• Duplicated work

• Not knowing how to price service

Warning Signs

Customers buy solutions.

They don’t want drill bits; they want holes.

– when dismantling becomes necessary –

48

Make Fundamental Changesto Core Processes

Focusing on the

Management of WorkInstead of Operational Efficacy

To move the work involving

parts or paper through an

organization quickly, cut

out activities that smother

profitability.

by

49

First, build barriers to impede the

smooth flow of work.

Second, ignore the steps required

for the work to get done.

Third, arbitrarily arrange people

into groups that have nothing to do

with the flow of these steps.

Time:A Competitive Weapon

What would you do to deliberately make work difficult to accomplish quickly?

50

Barriers Make Work Wait

Work that waits

results in waste like

excess inventory, poor

quality, numerous

meaningless meetings,

lost lead time, and lost

people’s time.

This eventually results in a waste

of customers.

51

The Arranging-People-By-Functions Barrierproduces a workflow like this:

CustomerDemand

CustomerServices

The paper stumbles many times as it makes its way through the organization. Time required to accomplish the work increases proportionately.

Distribution

Accounting

Production

Production Engineering

Marketing

Research & D

evelopment

Purchasing

52

Organizational Barriersof people and equipment further impede the workflow.

CustomerDemand

CustomerServices

Rework

Quality Control

Multiple Signatures

Policies

Lack of Training

Weak System

Interface

Insufficient Resources

53

The “Us” and “Them” Barrier

CustomerDemand

CustomerServices

• Give “them” the title of hourly.• Title the “us” group as managers.• Designate the “elite” level as executives.

Elite

Us

Them

The “Us” and “Them” Barrier

CustomerDemand

CustomerServices

• Give “them” the title of hourly.• Title the “us” group as managers.• Designate the “elite” level as executives.

Elite

Us

Them

54

CustomerDemand

CustomerServices

Matrix BarrierReporting to more than one Boss

CustomerDemand

CustomerServices

Matrix BarrierReporting to more than one Boss

55

A fully barricaded organizationproduces a workflow like this…

CustomerDemand

CustomerServices

Maximum number of barriers

creates the optimum organization forusing up the most time and money

to do everything!

Results: Conflicts of interest retarding progress on work, minimal on-the-spot dialogue between groups, and a proportionate increase in reports and meetings.

56

Organizations typically organize themselves the same way whether they produce in batch, volume, or just one; or whether they make 10,000 varieties or just one!

... does this make sense?

57

Do we move people, walls, and machines? YES!

Do we change the organizational structure and responsibilities? YES!

Do we minimize or eliminate paper flow and remote controls? YES!

Do we retrain and cross train as a part of the implementation? YES!

Do we reduce inventory, overhead, and throughput time? YES... it follows!

Can this be done without interrupting the present flow of work? NO!

How to Revamp Operations

58

What Happens When We Revamp? By getting rid of self-imposed barriers, we accelerate: the flow of work, communications, and instructions.

In this way, we… … earn more money.

59

The Changing Leadership Paradigm

The key to leadership –

A flexible leader is not a weak individual or a pushover.

Going with the flow and bendingwith the turns in the riverbed,water carved out the Grand Canyon.

– Flexibility.

62

Flexibility means being“hard like water.”

63

“Experts” can foresee everycontingency and know what is bestfor... everyone.

Centralized leadership suffers fromwhat Nobel Prize winning economist Friedrich Hayek called: “Fatal Conceit.”

This philosophy...

... Leads to Disaster!

Traditional Leadership Assumption:

64

The Reality:Knowledge needed for sensible business leadership is generally dispersed among many people.

A firm that develops better waysto tap into their people’s knowledge gains the advantage.

65

An organization is a mini-society.

The move toward Customer-Focused Operations

relies on everyone being properly informed to…

… Contribute to Decisions.

66

Only so much productivity comes outof reorganization and technology.

Productivity leaps come from theminds and hearts of people.

Strategy and Technology... Promise.

People and Processes... Deliver.

67

It is no longer enough for employees to...

... Come to work everyday.

... Work hard at assigned tasks.

68

Call on people to use their brains.

People – — want to be counted on and counted in.

— do their best in partnerships.

— gain meaning from effective involvement.

69

Group Participation: • Increases talent and expertise when addressing a problem.

• Provides different perspectives in solving a problem.

• Increases the buy-in to a proposed solution.

70

• Uses and promotes common sense.

• Doesn’t seek only no-risk opportunities.

• Doesn’t gamble only on... long shots.

• Is synergistic — not bent on a single direction

Looks at the world as it is, not as they would like to see it.

Group Leadership:

71

Buy-In must be Built-In

The Phenomenon of Half-life Excitement 1. Begin with an idea you are excited about.

2. Take it to your staff.

3. About 50% of your staff will be as excited about it as you are.

4. When presented to each organizational layer, the excitement diminishes by 50% —

until it is reduced to the noise level of all the other messages moving around in the organization.

72

• The project is perceived as being important by team members and people outside the team.

• There is a sense of urgency.

• Success is measurable or recognizable.

Characteristics of Effective Groups

73

Selection ofGroup LeaderA team leader is a participant who:

• Has reasonably good skills in working with individuals and groups.• Has sufficient time available to allocate to team leadership.• Views team leadership as important… ”ownership.”

74

Selection ofGroup MembersA group member is aparticipant who:

• Understands the inner working of the process.• Views team membership as important…”ownership.” • Has sufficient time to participate in the project.• Represents each area affected by the process.

75

The Changing Planning Paradigm

The reason we are too busy to plan today is because we did not plan yesterday!

Planning determines whether or not we will be in a time bind tomorrow.

Planning allows us to gain lead time — something we can never go back and get.

Planning — the single most important use of time

78

“Action Plans” deal with…. opportunities.

“To-Do Lists” deal with… problems.

Urgency versus Importance

79

Obviously, we have to take care of problems…

... we won’t succeed until we learn to make time for opportunities as well.

80

Time...

... our most precious possession.

We can allocate time many ways.However, there is only one

intelligent way.

Stand back from the work and determine what we would like to accomplish.

Make sure we invest our time in things that will help us accomplish our objective.

81

Analyzing the to-do list:

The question is not:How useful is what I am doing?

The question is:What is the time-benefit ratio?

82

Time-benefit analysis allows us to eliminate low-payoff time investments.

These are the time investments, which keep us busy but do not move us toward our objectives.

83

The key to individual success is tolerating ambiguity.

Every individual with whom we work is unique.

Every situation will demand its own solution.

Accept that there are some things we will never understand.

84

Success dependson many factors...Luck, Training, Experience.

But the common denominatoramong effective leaders is howthey used their time.

85

The Planning Focus

• Coordinate planning toward defined objectives.

• Assess to what extent these objectives are attainable.

The alternative is random behavior!

86

The Purpose Focus

Conventional Approach… Accept the problem as given. - Evaluate what we are trying to do. - Analyze who is affected.

Global Approach… Expand the problem in scope. - Think “Ultimate Purpose.” - Begin with the initial perceived purpose. - Work toward the broadest purpose that meets criteria.

87

The Uniqueness Focus

Replace short-term solutionswith Strategic Thinking.

Replace rigid mythswith Flexible Assumptions.

88

The saying…“I’ll believe it when I see it.”

Should be written…I’ll see it when I believe it.

Effective planning requiresthis shift in thinking.

Shift in Thinking

89

Ask the Right QuestionThe only relevant discussions about the future are those where we shift the question:

From:

To:

— Will something happen?

— What would we do if it did happen?

90

“That’s impossible”

is a statement not about truth, but about paradigms.

The only way to discover the limits of the possible is to…

Go beyond them.

Having found out what is possible, you are in a position to anticipate it.

91

The Changing Problem-Solving Paradigm

What is happening?Write down what led to the belief there is a problem.

Where is it happening?Don’t assume that what’s happening applies across an entire

organization.

When is it happening?Don’t jump to a conclusion that the situation is of a continuous nature.

How is it happening?Document the process presently employed.

We Have a Problem.

94

CAUTION: Resist the temptation to suggest any change during the fact gathering stage.

Who is involved?In complex situations, a large number of individuals can be involved.

What is the required performance?List what would indicate that the situation has been corrected.

95

Now that we know:• What is happening.

• When it is happening.

• How it is happening.

• Who is involved.

• What the required performance is.

We have the basis for developingthe Situation Definition.

Situation Statement

96

What’s Impacting?

Many factors causePerformance Deficiencies:

• Lack of proper delegation/control

• Inefficient or obsolete processes and procedures

• Lack of resources

• Poor communications

• Cumbersome organizational structure

• Obsolete job descriptions

• Poor work location

• Inappropriate timing

• Lack of clear policy

Plan to resolve the situation:Determine how to correct each factor.

97

Basic Characteristics of Complex Problems

• Difficulty deciding applicable data • Incomplete information • Conflicting objectives • Influential participants • Link to other complex problems • Exist in a turbulent environment • Require irreversible commitments

98

Symptoms – Effects – Causes

Symptoms• The visible parts of the problem that provide the first clues• Never explain; only manifest a problem

Effects• Trigger a need to resolve a problem• Represent the impact of the problem• Include symptoms

Causes• The reason for effects

99

Changing the problem- solving paradigm allows us to perceive things we were unable to perceive before.

Behaving in new ways requires thinking in new ways.

100

The Impossibility Question

What is impossible to do, but if it could be done would fundamentally change your business for the better?

The single most important thing you can do to hunt for your next paradigm is to begin to take action.

~Joel Barker, Futurist

101

Principles of Problem Solving

The Uniqueness Principle:Each problem requires a unique solution.

The Purpose Principle:Focusing on purposes helps identify the real problem.

The Solution-After-Next Principle:Evaluate short-term solutions with respect to longer-term goals.

— Breakthrough Thinkingby Dr. Gerald Nadler

102

Uniqueness Principle

Strategic thinking replaces short-term solutions.

Rigid myths change to flexible assumptions.

Meeting customers’ needs brings success.

Involving stakeholders makes implementation easier.

103

The Purpose Principle

• Does not ask, “What is the problem?”

• Does ask, “What is the purpose of working on this problem?”

• Does not accept existing constraints. Past experiences can constrain present activity.

• Results in fewer cases of finding a solution to the wrong problem.

104

Solution-After-Next PrincipleStates that: • All decisions have implications that extend into the future.

• The immediate solution is merely a transitional step.

• Compromises tend to have a forward bias.

Key benefit • Participants have a “mountain-top experience.”

105

Summary of Principles • Solve each problem… from scratch. • Focus on purposes…. not on what exists. • Work backwards… from the solution that is wanted. • Build a solution-finding team. • Consult with all stakeholders from the beginning. • Build future improvement into the solution.

106

Principles ThinkingThe purpose is not to avoid risk. Every action has consequences and involves risk.

The purpose is to arrive at a solution, which will minimize unnecessary risks.

The purpose may not always produce the right solution, but it improves the chances of being right.

107

The Changing Decision-Making Paradigm

A decision is not a mental

commitment to follow a

course of action.

Decisions and Decision Making

A decision is the actual

pursuit of a course of

action and an irrevocable

allocation of resources.

110

Deciding to “do nothing”is to avoid positive action.

When nothing is done, implementation is immediate.

111

v

The Right Way and the Wrong Way to Make Decisions

The right way will not always produce the right answer, but it improves the chances of being right.

The wrong way is to make an unverified assumption as to what needs to happen and then jump into action based on the perception of what will make it happen.

112

v

The Basic Ingredients ofDecision Making and Their Substitutes

The Basic Ingredients

• Facts

• Knowledge

• Experience

• Judgment

The Substitutes

• Information

• Advice

• Experimentation

• Assumption

Nutrition Facts Serving Size 3 oz. (85g)

Amount Per ServingCalories 38

Total Fat 0g

Cholesterol 0gSodium 0gTotal Carbohydrate 0g

Dietary Fiber 0gSugars 0g

Protein 0g

Vitamin A 270% Vitamin C 10%•Calcium 2%Percent Daily Values are based on a 2,000 caloriediet. Your daily values may be higher or lowerdepending on your calorie needs:

Total Fat Less than 65g 80gCalories 2,000 2,500

Sat Fat Less than 20g 80gCholesterol Less than 300mg 300mgSodium Less than 2,400mg 2,400mgTotal Carbohydrate 300g 375gDietary Fiber 25g 30g

Iron 0%•

Saturated Fat 0g0%0%0%2%3%8%

Calories from Fat 0As Served

% Daily Value

113

Decision Making

The ultimate aim is to bring about change.

Facts should indicate:

• Whether change is necessary.• Whether change is a possibility.• What change is possible.• What alternative is likely to be most effective.

114

What specific concerns need to be resolved?

What are the specific issues of the broad concerns?

What are the issue’s specific priorities?

Which specific process should be targeted for improvement?

Get the Specifics

115

Set Priorities

Elements to examine: 1. Seriousness

How important is this issue? 2. Urgency

What is the time deadline to resolve it? 3. Growth

If we do nothing, what will happen to the seriousness?

116

If this “problem” is dealt with,will further action be needed?

If the answer is yes — then onlya symptom is being dealt with.

Actions to relieve the symptoms only “buy time.”

Do not be deluded into thinking the problem is solved and change will occur.

How to Spot Symptoms

117

The Meaning of Numbers Numbers are not natural realities. They are artificial constructs of the human mind.

A Number Represents... a Count.We can count nothing until we shut our eyes to the reality that no two things are the same in every possible respect.

118

Obtaining MeasurementsRequires:

• Identifying a measurement objective.• Knowing the kinds of factors that will yield an acceptable comparison in terms of the objective.• Knowing key aspects of these factors that are suitable for measurement.• Selecting and defining a suitable unit(s) of measure.• Developing an apparatus for actual measurement.• Selecting and training an observer.• Applying the measurement tool by the observer.• Analyzing the measurement result in reference to the objective.

119

Big Decisions vs. Small Decisions

• Decision making is not fundamentally affected by magnitude!

• There is no direct correlation between magnitude and difficulty.

• The process simply requires greater care in major matters.

120

Decisions and Decision Makers

Those who make major decisionshave more going for them thanthose who make minor decisions.

Over and above personal qualification, they have greater access to support.

This works to minimize the possibilityof making grave mistakes.

121

Decision making requires –

A healthy tolerance for disorder.

A healthy distrust of pervasive harmony.

122

A leaderand decision maker…

“Someone you will choose to follow to a place you would not go by yourself.”

~ Joel Barker, Futurist123

The Guiding Characteristics of Decision Making •Reversibility - The speed with which the decision can be reversed - The difficulties involved in such a reversal

•Uncertainty - An unavoidable factor - The need to manage the effects

•Futurity - The degree of involvement beyond the present

124

Reversibility

• Consider the possibility that our decision may be wrong!

• What course of action will be open to us to correct the situation?

• When something goes wrong, we can react in one of two ways:

1. “What do we do now?” 2.“It’s time to go to… Plan B.”

125

The Trap of Certainty… … when “YOUR” paradigm becomes “THE” paradigm.

When a person states that something is:

Possible… You are almost certainly right.

Impossible… You are very probably wrong.

126

Futurity

The future is made upof two parts:

1. Foreseeable

2. Unforeseeable

Although no one can control future events, decision making concerns itself with the

foreseeable future.

127

TWU Paradigm Book

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