BEYOND BUZZWORDS

I HAVE met a lot of company CEOs in the course of my being a gemba ( workplace) walker since I could remember. After each encounter, I couldn’t help but reflect on the result of our meeting and invariably tell my inner self that W. Edwards Deming ( 1900- 1993) was wrong when he said that “80 percent of all quality problems are caused by management, and only 20 percent may be traced to the workers.”

The reality of corporate life has become even clearer in today’s work environment: really, 90 percent of the problems are caused by management, leaving only a marginal 10 percent as attributable to the workers’ fault. How did it come to this? Many of the chief executive officers around, despite their postgraduate degrees and at least 25 years of work experience, are often paralyzed by their strict command- and- control strategy, leaving them with nothing sometimes but to sabotage, unconsciously, the authority of their middle management team.

For one, how many department managers are allowed to approve a minimal P5,000 disbursement? Why do we have too many signatures on the leave application form of the worker as though it is a million- peso deal? How many of you have been vested a managerial title and yet are often driven into powerless situations by the CEO? How many are ignorant that kai

zen thinking is not about car manufacturing? The list can go on and on.

In one situation, a prospective client called for help when his company’s Six Sigma program became frozen almost near to death, with the key managers encountering difficulties completing their projects after more than seven months since inception. The CEO asked: “What happened?”

I replied: “I can’t answer that question. You should ask your Six Sigma consultant.” Of course, he knew it. He was just guessing that I probably knew the answer. I sure do. I know the answer. They’re using a flamethrower to kill a fly when all they needed was a swatter.

I can’t blame them. Six Sigma appears to be a rocket science in an ocean of common sense problem- solving. It appears classy and yet difficult to apply. It uses sophisticated statistical tools and expensive software when a simple math can easily calculate the issues.

But how does a CEO make an intelligent decision, so that he will not be called a chief excuses officer? For one, our typical CEO relies much on the recommendation of his/ her qualified deputies, who in turn, must be assessed by the following metrics to come up with the best decision possible:

1) Decides quickly and moves on to the next.

2) Uses authority to make a decision if circumstances are right.

3) Appreciates decisiveness and balks at flip- flopping.

4) Follows the rule that there’s only one solution to a problem.

5) Involves everyone who needs to be involved in the decision.

6) Seeks conflicting perspectives to understand the issue better.

7) Uses proactive discussion strategies to reach a solution.

8) Looks for different meanings when faced with a big amount of data.

9) Uses good reasoning and systematic logic.

The trouble is that not all managers can do all of these in making a decision, unless we’re talking about a programmed decision – that can only happen in response to recurring organizational issues, such as a decision to reorder raw materials and supplies when the inventory drops to a certain level. In purchasing, for instance, managers make a programmed decision by following the rule of securing at least three bidders to get the best possible deal from suppliers. But that applies only when we’re talking about buying certain equipment, such as a laptop computer by a chosen brand and specifications.

What if a supplier submits the lowest bid but can’t deliver on time, or delivers refurbished units? Or what if the CEO who is looking for a business consultant is flooded with different proposals from different personalities coming from varied backgrounds, using sophisticated methodologies, which make it hard for decision- makers to make an apple- to- apple comparison?

Then you resort to a nonprogrammed decision, made in response to situations that are unique, with complicated options and are largely unstructured, and which will have major consequences for the organization. In the telecom industry, a non- programmed decision is needed when the government is bent on opening competition to at least three players.

Or going back to the hiring of a business consultant, your management team must interview all prospective learning facilitators in an eyeball- toeyeball setup where everyone can show his wares or a sample of what he can do. Now, what if the winning consultant has offered to accept it for a hefty price?

Would the CEO and his team make an excuse by saying his company can’t afford the asking price?

Welcome to the world of managerial decision- making! Every organization must grow, but it can only prosper or fail as a result of decisions made by its managers and approved by the CEO. Decision- making is easy when you’re doing a programmed act like buying supplies and raw materials when the stock inventory level reaches its minimum level.

It becomes a non- programmed decision, when the CEO thinks of eliminating expensive inventory, so that there will be no programmed decision to talk about. Instead of buying and stocking up supplies, the CEO moves to strengthen the company’s partnership with a select group of suppliers to come up with Just- in- Time ( JIT) supplier arrangement.

And as soon as the JIT system has stabilized, then it becomes a programmed decision.

Good decision- making defines the CEO because it determines how the organization solves problems, allocates resources, and accomplishes its goals. When the CEO makes an excuse, that’s a clear sign he has become a symbol of an organizational weakness.

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