The Root Cause

Rethink Your Approach To Solving Stubborn Enterprise-Wide Problems

Why EXECUTIVE EDUCATION is Failing its Students

The function of a business is to trade products and/or services for money; to exchange use value for cash value. BUT, do you know how much value (utility) you create?

Business is a system; a network of nodes and their connections, which facilitate the function for which the business was intended. Think of nodes as the system’s component parts; such as functions, end-to-end processes, departments, or the nine links of the Value Chain. Connections are the interfaces, relationships, interactions, dependencies, or communications among nodes. BUT, who is in charge of interfaces? Or is it a no-man’s land for which no one assumes responsibility? If it’s not your job, then whose is it?

The purpose of a system is what it does; not what someone says it does, or wants it to do. Purpose is a touchstone for measuring progress on realization of the system’s intended outcome―the extent to which you succeed realizing the purpose for which the system was created. BUT, who is charged with the responsibility for the alignment of the system’s current capability and capacity―what the system IS doing―with its intended purpose?

Every system experiences variety:

  • Common Cause Variation, which is inherent to one’s approach to Business Governance; how the system is designed, structured or organized, implemented or operated, maintained, and managed. These are exclusive executive responsibilities BECAUSE no one else has the requisite authority to make changes to the system.
  • Special Cause Variation, which are wanted and unwanted outcomes that are directly attributable to a single person or a group of people.

Only variety absorbs variety. Hence, requisite variety within Business Governance—the different states or behavior it can display—must match variety displayed by the system. BUT, how adaptive, flexible, creative, are you as the system’s ultimate governor—the Chief Executive Officer?

Absorbing variety requires:

  • Eliminating special cause variation in order to bring the system within statistical control, thus making system outcomes predictable.
  • Continual improvement of common cause variation, which makes processes and their outcomes more uniform.

CEO effectiveness is a measure of a CEO’s ability to influence the system; to solve stubborn systemic problems and to change strategic direction. Business governance is the requisite discipline dealing with a system’s CONTROL and COMMUNICATION. Business governance requires understanding of a business’ functioning as a singular, unique, integrated, and open system, and insight into that system’s capability and capacity. BUT, a majority of executives participating in an IBM study confessed being perplexed by system complexity; they neither understand business on the level of process nor do they know how to restore system integrity when it is disrupted by unfolding new and unforeseen circumstance—when variety increases. Attempts at leading what one fails to understand is called TRIAL and ERROR.

Communication refers to information that needs to be exchanged among multiple parts of the system’s different sub-systems in order to coordinate proper execution of the control function―bringing about the intended change to the system’s current state or behavior. EFFECTIVE and EFFICIENT change initiatives require knowledge of many relationships of cause and effect, and means and ends, because they EXPLAIN and PREDICT outcomes. BUT, being overwhelmed by system complexity implies executives’ lack of understanding of these relationships—the interfaces or communication between a system’s component parts.

Unfortunately, Executive Development education emphasizes topics related to Finance and Leadership, which are nodes in and of themselves. In other words, these programs convey little to no knowledge of the urgently needed system-control and communication functions. Neither finance nor leadership is a substitute for business governance: no node can function as an interface, let alone do the work of every interface within the system.

Consequently, executive education programs do not prepare current and future executives to succeed in the execution of EXCLUSIVE executive functions; solving recurring systemic problems and changing strategic direction. This inability is executives’ Achilles heel.

I wrote THE ROOT CAUSE: Rethink Your approach To Solving Stubborn Enterprise-Wide Problems because nothing changes structurally without Executive Sponsorship for Change: allocation of resources and delegation of authority.
WHY you may ask . . . because a confused mind says NO!

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