For the leading edge of operations management and financial thinking it is increasingly obvious you need to look somewhere other than to the experts.
“In a 2011 performance review of roughly 300 hospitals, Amanda Goodall, a professor at City University’s Cass Business School in London, found that the ones led by physicians were ranked 25 percent higher than the average hospital. Another study, released last year, showed that hospital systems in England with more clinicians in the boardroom had lower death rates.”
That statement, from an article in Bloomberg BusinessWeek is not too terribly surprising to anyone outside of the ranks of business academia elite. Nor is it too surprising that the article also goes on to say, “Making hospitals run well for patients isn’t as simple as kicking out the MBAs, however. Most agree that managers bring a crucial set of skills to health care.” That second statement is completely unsupported by any facts in the article, nor are the “most” who agree with that statement identified. Rather, it seems to be based entirely on the business elite’s belief that the correctness of their thinking is somehow self-evident; that by definition ther theories of management and economics are good and true.
That is hardly the case.
In a piece from the HBR Blog we have something that would be embarrassing if the academics weren’t so insular and arrogant. Gary Hamel writes that bureaucracy is a big problem. By way of background, Hamel is the originator of the silly notion that ‘core competency’ is the do-all, be-all and end-all of management theory – a theory that propelled him to the stratosphere of academia. For the most part, they still worship at the altar of core competency.
The reason Hamel should be embarrassed is that the thinking that went into this article wouldn’t even get him a spot on the agenda at the smallest scale lean event. The lean community figured out that bureaucracy is non-value adding waste better than 25 years ago and has been working with extraordinary effort and creativity on solutions ever since.
Hamel has figured out that hierarchical organizational structures are bad – with a blinding understanding of the obvious he writes, “To find a cure, we will have to reinvent the architecture and ideology of modern management — two topics that aren’t often discussed in boardrooms or business schools.” He is correct that the topics aren’t discussed in boardrooms and business schools, but he is apparently oblivious to the fact that the subjects have been discussed for better than ten years at Lean Accounting Summits; and the results of those discussions have been turned into action and leading companies have been fine tuning and demonstrating the power of the lean approach to “the architecture and ideology”of management.
No “reinvention” is necessary, Mr. Hamel – just show up at lean management events with a pad of paper and a #2 pencil and take good notes.
The top down, functional silo organization “isn’t a diagram of a network, a community, or an ecosystem — it’s the exoskeleton of bureaucracy,” he writes. No kidding! Such a diagram of a network would be a 10+ year old lean-based organization called a Value Stream. An organization reflective of an ecosystem would be the living organization Tom Johnson described at the Lean Accounting Summit in 2006 – while Hamel and the rest were sitting around polishing core competency theory.
The notion that health care – or any other organization – is necessarily better led by a product of the elite business schools is little short of ludicrous. There is so little truly innovative management thinking arising from that bunch that they border on complete irrelevance. Not all academia is so hopelessly behind the curve, however. At places like Central Connecticut State, Portland State, tiny Winona State and others there are folks honing that leading edge. The irony is that the folks at those places who are easily ten years ahead of the elites are by and large viewed by the elite school gang as hopelessly unqualified to join them in pondering yesterday’s problems.