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Out-dated business models create waste

Look out for the organizational pitfalls that diminish profit and productivity in today’s business world

By Chris Majer

DISORGANIZEDContemporary management theory and practice have ill prepared us to calibrate our enterprises to be competitive in the modern business world, which has been undergoing major tectonic shifts in recent years. Sadly, most business leaders are meeting these changes with puny, incremental or entirely misdirected responses. 

One critical thing that modern leaders must do is develop a new way to think about waste – that it is not a thing, but an interpretation. In other words, waste is not trash to be thrown out; it refers to the phenomena that diminish our capacity to do what matters to us. In the business world, waste kills productivity and profitability. What constitutes waste is situationally defined at specific points in time. What was wasteful yesterday may or may not be wasteful tomorrow. The wastes that have concerned the business world for the last 50 years (e.g., wasted movement, wasted time and wasted resources) are products of the traditions of the Industrial Revolution, particularly mass production. We no longer live in that world. We must now focus our attention on eliminating six “modern” wastes, the new pitfalls we must avoid to achieve productivity and profitability.

Pitfall 1: Degenerative moods

A mood is a predisposition for action. As human beings, moods are an inescapable aspect of life. Our moods are the bases upon which we assess the world, and from which we move in the world. All the variations of moods fall into one of two categories: generative and degenerative. Moods either do or do not generate possibilities, but it is in the world of possibilities that new futures are invented. Today, however, too many organizations are in the grip of degenerative moods. The workplace culture is often marked by some combination of distrust, resentment, resignation, cynicism, arrogance and/or complacency. Degenerative moods can lead to a wide range of unproductive behaviors, which, in turn, waste vast quantities of resources while leaders are forced to work around or attempt to correct them. Degenerative moods are tremendous, yet invisible, killers of productivity and profitability. People simply cannot, or will not, perform to potential when their work environments are negative, unhappy places. Contemporary management theory rarely recognizes the importance of moods and the impact they can have on productivity and profitability. Much has been written about morale, but current corporate wisdom has little to offer beyond citing motivation and engagement at work, strategies that have proven to be largely ineffective. Data from Gallup indicate that a whopping 71 percent of American workers are “not engaged” or “actively disengaged” in their work. This means they are unhappy with their organizations, emotionally disconnected from their workplaces, and less likely to be productive. Gallup reports that employee disengagement costs American companies about $350 billion annually. Mood isn’t the only thing affecting workplace performance, but, if you don’t get this right, nothing else you do is going to matter. No other structural change can overcome deeply entrenched, degenerative moods.

Pitfall 2: Listening vs. hearing

To truly listen does not mean merely hearing or paying attention. Listening is a type of active interpretation that shapes our realities. The often unrecognized skill of listening is critical in the new business world. By creating and/or tolerating workplace conditions in which people cannot effectively listen to one another, we kill productivity and profitability. The lack of listening can be the result of degenerative moods, in addition to technology (which can make it difficult for some people to actually talk to others), or  just a lack of competence in verbal skills. Whatever the reason, when people do not listen to one other, it becomes all but impossible to accomplish anything significant or make effective changes. According to the International Listening Association, more than 35 studies have shown that listening is a top skill needed for success in business. Yet, less than two percent of professionals have had formal training related to improving their listening skills. Too many organizations today have nurtured a range of practices in which creativity, innovation and the open expression of our thoughts and feelings about our work and futures are ignored or spurned. Thus, lack of listening is a tremendous source of waste.

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This Article appears on the November 2013 issue of LPM under Briefcase

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