In an interview for the Gallup Management Journal, Jim Clifton, Chairman and CEO of Gallup, predicts the end of the Deming, Six Sigma, process improvement era. He describes process improvement as one of the big evolutions of leadership, but that it has reached its plateau as organizations have maximized efficiencies and have run out of things to improve (i.e., GE & Jack Welch).
Mr. Clifton tells how he believes the next evolution of leadership will require leading with “in-depth understanding of states of mind.” He says, the new economy is driven by innovation, talent, and entrepreneurship and an understanding of behavioral economics or mathematically describing states of mind will be essential for future leaders. My summary doesn’t do him justice, so read the complete, thought-provoking interview here.
As an improvement advisor and one whose work is heavily engaged in process improvement based on Deming’s theories, you can imagine I might disagree with Mr. Clifton. The short answer is yes and no. I do agree that organizations need to have a stronger understanding of ‘states of mind’ and being able to quantify them. As he indicated, we need to move from relying on anecdotes to having hard data. Where I disagree with Mr. Clifton is in his claim that process improvement is not still an essential aspect of the evolution of this leadership. What is missing is an appreciation that his central thesis is actually part of Deming’s theory of Profound Knowledge and his specific attention to psychology. Process improvement is about learning in action through testing changes and much of that learning involves studying the people and their human behavior in systems. Understanding how they do things, what influences them, and what they want. Process improvement, with an understanding of psychology and change complements Mr. Clifton’s theory.
We all are feeling a shift around us as technology rapidly evolves our world, what we know, and what we are capable to do. The differences in each generation is evolving at a rate like we’ve never seen and organizations and their leaders are going to need to be constantly changing to meet customer and workforce needs. If you look at process improvement as only an opportunity to reduce costs and improve efficiency, Clifton’s assertions may be right. But, if your coming at improvement and change from Deming’s Profound Knowledge lens, the playing field and the customer may be altering, but the tools are just right to meet the challenge.