 The subject of this lesson is not something that a student has to learn to become an effective person. It is something learned because it opens a door to future actions that are beyond anything currently envisioned. Consider the engineer who spent 25 years designing submarines for the Navy. He learned enough to actually build submarines. The chances of his building a submarine for himself is effectively zero. When the Navy comes up with a new design and seeks funding, he is the one they want to have look over the design. He knows what to look for. He knows the common problems. He can probably evaluate whether the project is likely to succeed. The student purpose here is to see whether some management approach is likely to be more a benefit or a cost. The subject is an intellectual toolkit for designing effective and efficient human organizations. It is not that you are expected to enter into these efforts so much as being able to intelligently evaluate and support those who do. It is knowing enough to support them where their actions will be effective and to work to redirect their efforts when they are not. It is being able to appreciate what a well designed and well implemented performance management system can do for all of us. Our major challenge is not to management itself but to the abandonment of performance management to attend to other purposes. It is in a chaos that has become common due to our long term avoidance of performance in favor of running things. Our challenge is, if you will, focus on being in effective charge of the action instead of gaining results through those who are managed. It is creating and enforcing chaos through approaching management as something other than getting performance through others. We are addressing this from the performance orientation. From our earlier lessons, it is fairly clear what we have to do to optimize the performance of management. We just need to review the techniques that will accomplish that end. But that is not the challenge that faces us as the ones who ultimately own our nation, our economy, our legal system. Our challenge is that the ones who exercise authority in our name have a different purpose than we do. And consider their chosen actions are the ones they are authorized to take. When it comes to administrative management, the orientation is set by the very concept of hiring subordinates to do performance management. From our current senior management perspective, performance is an assignment to subordinates and they are expected to apply their delegated resources to gain the performance result. Here it comes. The accepted purpose of the senior leader is making the assignment, delegating the resources and being there to handle exceptions that arise. It is the boss function addressed to the performance area as a whole. This defines part of the challenge we will face in presentation of performance. How do we measure the performance of the boss when the function is to assign results and receive accomplishments? The answer, of course, is that you cannot measure performance for this management. The management does not have to produce any results. Generating results is done by those who receive the boss assignment. Their leadership clings to a like understanding that there are no measures for senior leader performance. In that vision, they have assigned performance to those who do performance. They are exception managers who will step in and need and take care of corporate level challenges. This makes perfect sense to leaders. Exception handling is one of the most important purposes for having them in charge. In this perspective, leadership has accomplished much the same thing as production management. It has just divided up management into assigned areas as a foreman would divide up a productive effort among workers. The alternative viewpoint is focus on performance. When performance orientation was actually used in the production area, it was so much more effective than boss approach that the very concept of boss management was eliminated. The boss was quickly replaced with the foreman. The boss function was excess. There was no longer any justification for maintaining it, and its primary functions were assumed by the foreman. Leadership had to allow performance management to continue in production areas as failure to do so in the face of competition would destroy the business. But leaders did not have to tolerate that sort of unregulated behavior in the management systems that answered directly to their boss-like assignments. The wall between management and labor formed and has been effectively maintained by business leadership as being proper organizational management. And why would I spend so much time and energy on this? The answer is that very important reality of corporate leadership being in charge. We cannot deal effectively with our hired leadership without knowledge of what they do and why they do it. It is not enough to have good alternative understandings. Corporate leaders are every bit as much employees of the business as are the workers and are entitled to like considerations. They do what they feel is right. It is where we gather as owners that we have higher authority. These leaders are very well versed in the application of authority, and their love of being in charge is not going to support their refusing the boss-like directives of owners who find their corporate voice. Our challenge is establishing management over those who have every reason to believe that they are in charge. We have the tools to do this. It just starts with that ultimate business purpose of delivering value to customers. Performance metrics are the black box measures. They measure what some effort costs and the value of the results of that effort. They assume that those who receive the results are the ones who value what they receive. Management metrics measure the cost and benefit of management efforts. As noted, there is a challenge in the obvious limit of management, not really producing anything of inherent value, but rather impacting on what those who are managed are able to produce. In accord with our open black box of the organization, the only real value is what gets delivered to organizational customers. We have an excellent working example in the management of the local work group. We know that the boss approach to assignment of responsibility and receipt of results achieve much less than the foreman's supportive operations. The whole cost of gaining the productive result was greatly reduced when management switched. The cost of generating the valued output was effectively cut in half. The general effect was not an increase in the value of products, so much as a reduction in the expense due to the support and teaming that performance management promoted. In the strictest sense, the metric of management improvement is its impact on performance of the larger effort that is managed. A real management improvement will usually reduce the whole organization cost of delivering a valued result. In practical terms, we can simplify this. We rarely are able to increase the value of product by what management is able to do. If it does not actually change the product, the output value is fixed by customer decision. In addition, the performance areas are already using form and based performance, and there is little that management can or will do to increase production area efforts. The more leaders interfere in that area, the lower the performance they receive. What this provides is the measurement of the impact of management in terms of the cost of providing management services. It is generally effective measure of how much gets expended on management in comparison to how much gets expended by the larger organization. This can be largely estimated by how much it costs to manage those who are doing the performance. This gives us a quick and dirty measure of management, and it is how much it costs to gain performance through a managed worker. The more we spend on providing management services to the average worker, the less efficient that management effort becomes. If we eliminate management efforts that do not contribute to supporting performance, we increase the performance of management. In another viewpoint, management is a cost we incur in order to gain the benefits that management has upon performance. Where any part of the investment does not yield a valued result, we can improve overall management by ceasing to invest in it. We can apply these metrics to identify an effective management and can then work to eliminate it. This is where we examine individual goals and objectives set by management, identifying most of them as creating inefficiency. It is where we can see regulatory management focused on what subordinates are not authorized to do as potentially wasteful. Where such things are found to be cost without benefit, they are also something that can be eliminated without impact on the performance of management. We must also honor the understanding, as just presented before, that management has its reasons for doing these ineffective and inefficient things, and it is also in charge. Pointing out the inefficiency is unlikely to gain any effect except personally marking use of malcontent and threat to good management. The great strength of administration is its promotion of stability, attempting to improve it without directive authority is unlikely to be beneficial to either the organization or individuals involved. The challenge of someone seeking performance improvement is largely a challenge in vision. Leaders are doing all that they have been trained to do and are both consistent and intensive in their efforts. Our history of performance contains a curious example of just how far administrative management will go to deny the foundation for human performance. The stage was set in the Hawthorne plant in Cicero, Illinois. It was a performance study to seek out the optimum conditions for production facilities. It was a study in accord with administrative approach that was focused on how to use physical improvements to facilities to maximize what the business could get from the efforts of workers and what they would put forth. In short, they started with a dingy and poorly lighted facility and made improvements in appearance and quality of lighting as they hoped each improvement was reflected through an increase in what workers were getting done. Then as a back check they started returning things to their former state, reducing the lighting and appearance of the work place. With each change they still saw increases in performance. Still today the experiment is recognized as a landmark for learning about the Hawthorne effect. What they learned was that you cannot trust the data from such a study as the very fact that the subjects know that they are being studied significantly affected the results. The studies were done in the late 1920s to mid-1930s. It was part of the administrative management's effort to get the most possible work from the employees for the dollars paid, a boss management concept. It is still recognized in business leadership as a failed attempt at efficiency work, a good attempt to optimize performance, but the conclusions could not be trusted because the workers were directly involved in the operation of the study. Are you ready for the performance alternative? Actually working with the workers somehow interfered with what administrative was trying to learn. There is a staggering level of blindness to the benefits of working with performance people to accomplish things. Even when leadership ran the studies themselves they refused the results. This is a witness to how blind modern business leaders are to performance matters. The experiment had already been run by Frederick Taylor decades before when addressing the ball bearing inspectors. It was not the quality of the facility that led to worker performance. It was the direct and intensive involvement of management in working to support their people. But again, that is performance thinking. You do not want to do that and point out how poor administrative management is at gaining performance by accepting techniques for directing workers to their efforts. Our challenge in this exercise is to optimize management. It is to answer the question of how to arrange management so that it best assures the performance cycle with organizational customers. How to arrange it to achieve efficiency and effectiveness in assuring the profitability of the organization to its owners. You will note that I went straight to the owner purpose, ignoring the senior leaders' preference for seeing the proper and effective running of the corporation. Modern performance is, as has been true from the beginning, enhanced by establishing trust relations that get people working together for what they all value. Consider what the Hawthorne effect means to business leadership. If the workers can recognize that they are receiving some sort of benefit from management, any resulting increase for workers is to be seen as a result of experimenting on them. What management has to do to optimize performance was already demonstrated. They had to coordinate the efforts of workers who did the performance. That was mostly accomplished by putting production management in charge of production. If the worker requires workers, you have to provide the production area with sufficient human resources to do the job. We do have an organizational element, a human resource office, that is supposed to provide what performance support is needed. You need the raw materials and equipment to do the work. There is a supply function that certainly can be tasked with that support. You need facilities to house the production effort. Again, we have a group that can be tasked with assuring this type of performance support. We have all these, so what is the problem? And then we look to the assignment given to these groups. Each is based on what the group is to do, what it is to accomplish by its efforts. For an example, the supply organization is not like the material handler. The handler serves the production effort, getting supplies and materials to where they are needed on a timely basis. It is a service that teams this support worker with those who are doing performance. The supply mission is self-contained and it does not include teaming or serving the needs of performance groups. Central supply provides a way for the performance people to get their own supplies and materials. If the performance people want supplies, it is up to them to put in a supply demand together and deliver it to the supply group. They are required to support the supply effort before they can get any support. They are required to do the supply group's internal paperwork. It is a supply people who try to team with their customers, but that is not their assignment. Our immediate focus is how to arrange for our support group efforts to actually deliver support to the productive functions of the business. One of the most obvious needs is to get out of the boss mentality. The idea that support can be directed to an individual group as an assignment. That is consistently interfered with human performance through teaming. Our general technique is investment in management. It is investment in supporting efforts such as personnel or supply. This returns vision to something that can be addressed as a black box entity. The support effort is going to have a real cost and we are seeking to have it deliver a real value. The group cost is in terms of personnel, facilities and other costs of operation. The benefit produced has also been addressed in terms of impact on supported internal customers. The value will be determined by those who receive the benefit of the support. So how does a foreman assign support to a material handler? We have a model that works in practice. It is your duty to assure that the workers never have to stop for lack of supplies and materials. The focus is on the production line, not on some definition of success in providing support. Success is based on worker needs, not on what the supply worker has to do to meet those needs. People on the production line do not request supplies. If they have to stop to take action themselves, it is already a failure in the supply effort. When a supply function is operating properly and serving a production line, it involves active evaluation of worker needs. It involves intelligent anticipation of support needs and independently initiated support actions. The result is a material handler operating as part of the production team. It is a model for supply support that is incorporated into the performance process. It is to be missioned as a group that assures performance by work groups in the production area and they never have to stop for lack of supplies and materials. If there is a supply system, it is internal to the supply function. If there is paperwork, it is internal to the supply function, not something that performance people have to complete if they want supply services. It is supply workers who observe production work being performed and work with receiving group performance as their effective customers. The supply function is to assure the needs for support are both anticipated and met. And for evaluation of the supply function, ask those who do the performance. Has there been any problem with the supply effort getting you what you need to perform? Have you had to seek them out and set demands to keep your people working effectively? This needs to be in comparison with the group that works to its own authorized and assigned purpose, striving to operate its supply function to serve its own assigned purpose. The administratively oriented leadership is not going to set teaming supply support up like that and would likely work to replace it with a system that is better designed to manage the function. The difference is not so much in the efficiency of the operation of supply, but in the value of its services and supporting the operation and profit generating product of part of the organization. And then there is the challenge of purpose differences. The simple message of performance improvement from moving supply to the labor side of the division is that business is better off without having leadership running that part of the business. That is anathema to modern leaders. The boss approach does work. It is just unnecessarily expensive. Teaming people works better. Tapping into that natural human purpose and working together with others. With the black box as a guide to organizational purpose, those within the black box will share that purpose. They can be teamed to accomplish it. With authority-based purpose as something different for management, there are two purposes. The organizational purpose and the management purpose. Teaming is discouraged and the performance advantage of people working together is limited. So how much does management cost under the two different approaches? The small business approach often run by a family leader as the effective owner has each hour of management system effort. Supporting four to six hours of performance time. The same metric for large administratively-led systems has that hour in management supporting only two or three performance hours. Setting goals and objectives generally interferes with operation to meet other purposes. Management improvement as now focused on improving the operation of management systems interferes with teaming management or labor. There is a high level of opportunity for improvement. In more general terms, we have the lesson of feudalism. That early model for a functioning authority-based operating system. It promoted rule and place of performance. It supported those peasants who worked and did that much as a farmer promotes the welfare of dairy cows. They were cared for in order to be able to benefit from them. It is important to note that the farmer is not the enemy of the dairy cows. He does care for them. The challenge is not care and concern, not acts of barbarism and torment. The challenge is that of purpose. The very concept of elevating the status of the cow to be independent of the farmer is anathema. The farmer only cares for the cows because of what they are able to do for him and for his family. And most certainly the farmer is not going to prepare the cows to run the farm themselves and end up working for them as a way to earn a living. The cows will continue to be cows, serving their purpose of producing milk for the farmer to sell. The feudal king and barons did indeed cherish the people even as the farmer cherished his cows. Now consider the privilege oriented business leader and his care for the production people who are his source of wealth and privilege. He too will cherish and care for them. He too will look after them as he is able, preparing and maintaining them as he is able in expectation of their productivity. Those leader efforts promote the welfare of the corporation. And it's what pays the leader's salary. Like the farmer who does not produce any milk to sell, so the leader does not produce any product to sell to corporate customers. Now consider the corporate leader family. Its focus is on running things, not on delivery of product to customers. It would be as if the farm hired people to care for its cows and the family turned its attention to running things. The relationship of farmer and cow is no longer there except for activities by the hired help. The farm still sells the milk, but has hired others to care for the cows. Caring for the cows becomes a business decision. Again, the farm is owned by investors, people who never come to the farm and who are only in it for what they can earn. They hire the farmer to earn for them from operating the farm. At least when the farmer was running the business, the cows had someone who really cared for them even if it had a separate purpose. If there is a leader family in charge trying to run the farm for profit, it is not so good for the cow. The corporate leader family rules over the employees. The corporate leader family serves its own purpose, not the purpose of those employees or of the customers or of the owners. This becomes clear through acts of the family that challenge the purpose of others. Consider corporate donations to political causes. There is an immediate clash when those donations are to causes that are not the causes of the owners. This is committing the resources to a purpose that is counter to that of the other parties at interest. And it is much worse when we consider that it is criminal behavior. In the U.S., corporations are not entitled to a voice in our government. The U.S. government was created to represent the people, the citizens. For a non-citizen to seek influence in political government through payments is a felony called bribery. Again, the ultimate owners of the corporation are people, citizens. They have entrusted what they own to these corporate leaders for the purpose of earning a profit through operating the organization. For leaders to exercise their privilege to control these funds and then redirect it to other purposes is a felony called embezzlement. That is not the owner-investor purpose for which the corporate resources are entrusted to those leaders. But then again, the laws enacted by privileged public leaders have provided shielding for those criminal actions as somehow authorized for the barons of industry. We have another human challenge to address and that is the impact that living in this culture has had upon us all. We have elements of the anti-performance that we have learned to address as normal. We do not get to unlearn things, just to replace what is not served with how to be more potent. While a lot of our learning here is focused on things we do that is ineffective or harmful, the purpose is not one of heightening frustration. It is one of seeing opportunities that would otherwise remain in the shadows. Nobody gets to solve problems that they do not even recognize as problems. We will continue examining what we do and what we have done for the purpose of identifying waste. These are things that we do not have to do, that we can eliminate without effect on what comes to us. These are our opportunities. A lot of our opportunities are at this point historical. They are long-term challenges that have disempowered people for decades and even centuries when it comes to structuring of management systems, our general body of leaders and educational efforts are focused away from performance. They have done what they were able with the tools of privileged leadership and they have ownership in what they do. It is unlikely that there will be anything but resistance to any performance orientation that is our history being repeated. The challenge we face as empowered people is the inability of modern, privilege-based leaders to even recognize the potential for enhanced human performance. It is not part of their experience, their education, nor is it likely to be found in what they share with other leader family members. Our leadership in general has been taught not to see it, but to be distracted to other things. The challenge in this is not overcoming them or harming them, it is recognizing that there is no true division. They are also human, just as we are. They are also most effective when they team with one another instead of entering into us and them relations. They are also doing what they expect to bring their own future generations, such benefit as they can. Our privileged leaders are not the enemy to be conquered or destroyed. They are not the opponents to be overcome. They are also us. They are to be enlisted and empowered right along with the rest of us. It will be our challenge to set them more fully into effective leadership. It will be to find and promote their ability to team with those they lead and to support the actions that get set in motion, whether they initiate the actions or simply step into leadership at the invitation of others. Damaging other people is easy, especially when they are alone, but our task will be empowering them, which is rewarding. From the 1950s until now, we have management and a state of failure as to bringing the resources of the business to focus on performance. Modern leader attempts at resolution have continued and intensified, but remain focused on repeating the causes for earlier failures. Management support for performance continues to drop. That is the consistent result of our privilege oriented approaches. Our industrial leaders have invested mightily in this effort. They have a great sense of ownership in management improvement and have accepted that they are harvesting significantly from these efforts. Even more, they have harvested what they could value. They are even more certainly in charge, ever more able to run their organizations. They have good reason to claim success. It is just not success at performance. Whenever common people are able to step forward as owners, it will be resisted as if it was counterproductive. Do not have to concern themselves with what the hired help has decided to do, but can step forward boldly, directing leadership to what works for owners. Our deeper challenge will be doing minimal harm to the leaders in their distracted state. The challenge to human empowerment is not a crisis. There is no cliff in front of us that demands immediate and intensive change in direction. The feudal limits have been with us for centuries and are not going to evaporate in the near future. But we have been damaged by it. The size and cost of managing organizations has been slowly rising and will continue to rise until we do something about it. This course is technical support for those who would make the changes that empower people. It is just not by gathering authority over others or by overpowering them. It is gaining potency by finding common values and teeming with others. It is empowering them and then sharing in their accomplishments, even as they share in yours. And the hardest part is the vision itself. It is orientation to performance instead of activity. It is looking for performance results instead of trying to evaluate what people do. Maintaining performance orientation is not easy in our current environment. It requires a personal effort. Consider the improved personnel system that forces every management supervisor to have a clear list of evaluation criteria for each subordinate, requiring the collection and presentation of evidence of success or failure. Our modern leaders accept the value of requiring compliance with the added assurance of treating employees intelligently and fairly. But what about performance? Will the business be able to sell one more product to earn income? Will it be able to gain more from the cycle with business customers to pay for this new and improved management? It is totally off the radar. This is what we will have to work with for empowerment.