By Kevin Meyer
Don't worry folks, although the article I reference here is on regulation, my point is aimed at corporate policies and procedures as in this case they generally have the same problem. Let's see if I can tip-toe around the central theme of the article so I can make that point.
Organizational policies and procedures, and regulations, in the U.S. generally start from a perspective that every little nuance must be specified.
Government oversight of day care seems like a good idea—you wouldn't want children cooped up in an airless basement—but this proposal went far beyond basic health and safety.
The new rules would dictate exactly how to do just about everything: how many block sets ("at least two (2) … with a minimum of ten (10) blocks per set"), where the children can play with the blocks (on "a flat building surface" that is "not in the main traffic area") and when caregivers must wash their hands (before "eating food," "after wiping a child's nose," etc.).
This is the way regulation works in America: Regulators try to imagine every possible mistake and then dictate a solution. The complexity is astounding.
And we all know the behaviors that are thereby created. The folks being regulated… or "managed"… by such procedures then set out to identify the most narrow possible opening in the wall of excruciating detail, and then pry that opening apart to create a new opportunity. Then armies of lawyers… err… executives… jump into the fray to determine and litigate whether that opening was legit, and if it was, then the regulators… err… managers… then add another few thousand words to close the latest loophole.
Under a recent federal directive, the number of health-care reimbursement categories will soon increase from 18,000 to 140,000, including 21 separate categories for "spacecraft accidents" and 12 for bee stings. There are over 140 million words of binding federal statutes and regulations, and states and municipalities add several billion more.
We see it in the financial industry, we see it at a different level inside our own organizations. Take a look at your company policies and even assembly and operating procedures and work instructions. Yep, you know what I mean.
Regulation is deliberately designed to avoid human discretion—to create a regulatory code that is self-executing. By making rules as precise as possible, we hope to avoid bad judgment. The unfortunate side effect has been to preclude good judgment. Modern regulation doesn't just control undesirable practices—it indiscriminately controls all the work of regulated entities.
Taking responsibility is basically illegal in the modern regulatory state. A teacher can't maintain order in the classroom without filling out forms and facing a potential legal hearing. Judges sit on their hands, letting people sue for almost anything. An inspector feels that he has no choice but to shut down an unauthorized neighborhood lemonade stand—a rule is a rule.
As a side note, how many of you still throw new hires into a small windowless room with a five foot stack of documentation to read, and then after a day of speed reading consider the poor soul to be "trained"?
There is another way. Instead of regulations… procedures… that attempt to identify and control every option, how about results-based regulations and procedures that attempt to describe the desired outcome? Could this even be analogous to push- vs pull-based procedures?
In place of today's regulatory micromanagement, what we need is results-based regulation, with simpler rules tied to the outcomes they produce. What would such a regulatory system look like? In the first place, it would be radically simpler. Most bureaucratic detail could be scrapped, and law would become understandable again. The focus would shift from complicated rules to desired results: clean air, safe food, honest business.
Are any of you lean folks experienced in the results-based focus of TWI starting to get a twinge of understanding? Ya, me too – that's what prompted me to write this. How about a couple examples, the first from our friends across the pond that already use this method.
In Britain, financial institutions have to answer to such principles as "A firm must conduct its business with integrity" and "treat [customers] fairly." Applying those principles to Wall Street would provide ample authority for regulators to stop the next bubble without smothering credit transactions under thousands of pages of new rules.
I can already see some people getting squeamish about definitions. You've been living in a world of over-specification for too long. Change your perspective. Ok, I'll admit it shakes me a bit as well – how do you prevent abuse from the regulated as well as the regulator… the team member as well as the manager? The article continues with several suggestions along those lines, but the bottom line remains the same:
Specify what the desired result looks like, not every aspect that could contribute to the result. Then provide boundaries and specifics only on key contributors in the process – the "key points" in TWI parlance. Promote understanding of the process and result, not the creation of mindless automatons following a narrow, winding process path. Again, many similarities to TWI, which my company has found to be one the most powerful drivers of lean transformation and even a foundation for kaizen.