The Exception-Tolerant Organization - Part 5

As explained in my introductory post on the Exception-Tolerant Organization, ETOs do not tolerate waste, stifling of innovation, or inflexibility. These are the corrosive agents that prevent an organization from smoothly handling exceptions, maintaining a competitive edge, and operating effectively.

When I was at IBM Research I knew of a research Fellow who would monitor the keystrokes made by his administrative assistants while they were typing, and would spend quite a bit of time with them working on utilizing the fewest keystrokes possible. This is intolerance of waste taken to the extreme, where a few burning trees are saved while sacrificing the forest. Although it is quite easy to disdain waste made at this low level, this is not the kind of intolerance we are discussing here.

While the canonical definition of waste is anything that does not add value, what exactly constitutes waste for the Exception-Tolerant Organization? As previous posts have mentioned, exceptions happen to organizations, to customers, and to people every single day. Those organizations that cannot handle the exceptions and improve from them will fight a constant perception of lower value in the eyes of their customers.

For those who understand the benefits of mapping a value stream, waste would be anything that slows the velocity of movement through the value stream. The inability to swiftly handle exceptions can bring this velocity down to near zero. Being Exception-Tolerant can keep the value stream moving at the pace of innovation.

Waste for the ETO, then, is the set of roadblocks to handling exceptions: inflexibility combined with the stifling of innovation.

Inflexibility is tough to exhibit while being Exception-Tolerant, but is even tougher to recognize in an Exception-Intolerant organization. After all, there are certainly industries and products where strict and rigid standards must be constantly and consistently adhered to (watch-making, food preparation, chip manufacturing, aerospace), but these should not be mistaken for inflexibility. Chip manufacturers, despite adhering to the use of 30+ year old computer code, have been able to find avenues of flexibility in many ways over the past few years - from lower-voltage conduits to hyper-threading to multi-core pipelines.

Stifling of innovation is perhaps the touchiest subject when it comes to organizations who may be looking to become Exception-Tolerant. The urge to suppress innovation is strong in risk-averse environments, and is often exercised in such forms as:

- the boss consistently saying "No"
- a departmental control group demanding that a potential innovative division look and operate the exact same way as the existing divisions
- new ideas whose implementations are unduly laden with process, direct-to-archive documentation, or extreme executive input

The stifling of innovation is often a by-product of culture, and the effects may not be felt in world markets until long after the key culture-makers have moved on. Strong cultures that stifle innovation are not often discovered by the outside until the effect in the marketplace becomes obvious. ETOs, even ones with strict standards, have a tough time saying "No". Inflexible organizations find it all too easy to say "No" and close doors on new ideas and customer needs by stifling innovation.

But with all the good work that we as people do, and all the work that we endeavor to do, how do we let ourselves get into a mode of inflexibility and resistance to innovation? The hard truth here is that we most often become inflexible and stifle innovation when we put self-interests above working together as a team. There is good reason that this struggle is often labeled as the war within.

But the other side of this hard truth is that ETOs are given credit by their customers for handling the exceptions and increasing the overall value proposition. And when credit is given in this fashion, ETOs give their people, who have worked together as a team, every opportunity to take the credit and reap the rewards - thus making team achievement in the best self-interest.