The meat in the quality sandwich by Jolito Ortizo Padilla

GA Business and Management Consultancy
"The Real Best in Asia and Middle East"

I was working as a marketing and training director at VV Soliven Realty Corporation trying to support property brokers to solve their problems when a Japanese friend said to me: " Instead of looking at individuals, you should work on the whole organization." It was a seminal moment that started me thinking about understanding organizations and how they work. I asked myself: If we design a better system would brokers better achieve their purpose in society?"

That one throwaway comment was the catalyst for a change in my career. I went on to study intervention theory, which is focused on the question of how to intervene in a situation in order to secure desired outcomes. However, I realized very quickly that, while it was a good theory , I didn't know what to intervene on! In the end it was the work of Deming and understanding organizations as systems that became the meat in my sandwich , so to speak.

I began to understand that it's the system that governs an individual's behavior. If an organization is designed as a series of functions and managers find that their staff don't work well across functions, they mistakenly think they have a cooperation problem when actually they have a system problem.

Organizations don't have to be designed as functions. It was Deming who said: "We invented management, so we can change it". Once I understood this, my career became about managing service organizations as system instead of in conventional ways.

Early in my career , I had the good fortune of working with one chief executives at several different companies, and together we developed a method for studying and redesigning organizations as systems. Along the way I learned that because service organizations do not manufacture anything, they can change swiftly from the conventional command-and -control design into a system design, resulting in big improvements very quickly.

I also discovered that much of conventional management theory is flawed, just as Deming said it was. For example, I found that the concept of economies of scale is a myth. If you industrialize service organizations-front offices, back offices, standardized work-what this does is create failure demand, demand created by the failure to do something for your customer or the failure to do something correctly. To solve this problem you have to absorb the variety of customer demands. If you've created an industrialized , standardized design, it won't absorb that variety so it creates failure demand. Most managers don't understand that; they treat all demand as though it's work to be done.

Alongside Deming, Taiichi Ohno's work in 1950s was another source of inspiration , particularly the way in which he taught managers by getting them to study the system before sending them out to the shopfloor. He took this approach because when you study organizations as systems you learn some counter-intuitive things. In manufacturing , for example, you learn that it's folly to concentrate on unit cost because the cost is actually in manufacturing flow. Ohno understood that if you explain that to a manager they might not understand because they have been taught how to manage unit cost. However, if they study the system itself then they will understand it.

I put my experience into practice and started my own consultancy company in 1998. GA Consultancy specializes in helping service  organizations escape from the traditional command - and- control design and into a systems design. We've developed methods to help our clients study their service organizations as systems and, with that knowledge , redesign their services according to customer demand. That is a counter-intuitive step for most managers because they think if you give customers what they want  then costs are going to go up. Most managers believe that there's a trade-off between service quality and cost, but there isn't. As quality and service improves , costs will fall. When you learn to manage value, you drive costs out of the system.

My reputation's built on the success that people have had  with the GA Method, but I'm also  well- known for being critic of management fads. I'm anti the conventional command-and- control management style and I'm sad to say that ISO 9001, the business excellence model, six sigma and lean are all stuffed full of conventional management thinking. The quality profession needs simplify things by going back to Deming and understanding how to manage business as systems. People say that's what ISO standards do, but I disagree.

Another thing that I've got a reputation for is being critical of public sector reform. I first got involved after I was contacted by someone working in the public sector who had read a book of mine. He told me that his organization was suffering from all the problems that I had described in my book. His business delivered housing benefits and we went in and helped him redesign it. From there I really started learning about public-sector service.

My career has always moved this way; right from early years whenever a fad came about I would go back to find who started it, what problems they were trying to solve and the method they had used.

I've written four books on the application of systems thinking and I'm considering writing a fifth on economic thought , which will be another new area for me. Economists have a huge influence on management thinking. Economies of scale and cost management , for example, both came out of economic thinking and so I'm considering writing a book to help educate managers. I want to explain that much of traditional management thought has its roots in economic thinking and the big subject that's missing in economic thinking is the economic of value. Which brings us back to Deming again. Until the quality profession educates industry and adopts systems thinking, managers will remain focused on costs and not value.

GA Consultancy Head Office in Singapore