(Co-Authored with Steven A. Cavaleri)
Here are four types of PSPs that may be found or approximated in organizations. The four are not a mutually exclusive and jointly exhaustive classification of PSPs, but a categorization of types that one can use to begin to understand and explore the world of PSPs, or if you like, their phase space.
The Closed Problem Solving Pattern is one in which authority to recognize, formulate, and solve problems, and then communicate solutions is restricted by high level management to a small elite, while the mass of employees contributes only to operational business processing. A closed PSP can be very effective provided that the small elite’s problem solving competence is great and that their range of new ideas has enough variety to cope with the challenges the organization meets within its environment. The American automobile manufacturers of the 1950s and 1960s are examples of organizations using closed PSPs.
They were successful for a time. But over a period of decades their efforts at adaptation became less and less successful relative to European and Asian competition. One of the most important factors in this decline was the relatively narrow scope of the options and ideas they were willing to consider to cope with new competition. For those who have lived through this now nearly 50 year period, it has often seemed as though the American “Big Three” was wearing blinders and, in addition to its incapacity to innovate, was even incapable of mere accurate and timely copying of the successes of rising world competition.
The Mobilized Problem Solving Pattern is one in which many employees are enlisted in problem solving and solution dissemination, but, also, in which these efforts are closely managed and directed by a small elite, so that only certain methods and processes of problem solving are implemented. These organizations can be very successful provided, again, that their problem solving competence is great and that their range of new ideas has enough variety to cope with the challenges the organization meets within its environment. They can be more effective than organizations fitting the Closed PSP since, given their methods and processes, they get more people involved in problem solving, generating more variety in solutions.
However, their inability to go beyond a small elite in generating new problem solving methods and processes means that there are important constraints on their ability to adapt. An example of such an organization is General Electric with its centrally directed imposition of Six Sigma-based approaches to problem solving. We are still in a period where GE is quite successful, but it remains to be seen whether they can learn as effectively as their competition and their environment demands.
The Frozen Problem Solving Pattern is one in which hierarchical stove-piped structures have formed to deal with problem solving. Within the stove pipes, the pattern is one of the closed or mobilized PSP, but communication across stove pipes is prevented by organizational structures, or culture, or lack of trust, with the result that organizational problems that are broader in scope than the stove pipes (cross-stove pipe problems), cannot be solved. This is the least effective of organizational PSPs. It is perhaps typified by CitiGroup under its financial supermarket model, and may account for its recent fall from grace.
The Open Problem Solving Pattern is characterized by widely distributed authority to seek, recognize and formulate problems, arrive at new solutions and disseminate those solutions to others. Structural barriers to self-organization are at a minimum, and enabling human and Information Technology structures for self-organization and participation in seeking, recognizing, and formulating problems, and making and communicating new solutions are diverse, widespread, and up-to-date. Also, internal transparency in knowledge processing and trust in related interactions is high.
Among these four patterns, all can work from time to time in certain situations. That’s why all four types are found in organizations and have a certain measure of stability. However, the Open PSP is the one that is most likely to be associated with the highest quality of adaptation. We think that’s true because such PSPs enlist the abilities and ideas of the widest range of participants in all aspects of learning and innovation.
The Company that best exemplifies the Open PSP may be Toyota, a company that has institutionalized problem seeking, recognition, and formulation, new idea generation, careful comparison and testing of new ideas through “genchi genbutsu” (“go and see” — the process of fully experiencing and grasping an operational situation), jidoka” (“self-regulation” — the ability to detect problems in business processes and stop those processes pending solution), “kaizen” (continuous improvement through problem solving using using “the scientific method”); integration of those ideas wherever they are needed through “yokoten” (“across everywhere,” the activity of widely sharing an integrating solutions through the organization ), “jishuken” (“self study” — knowledge sharing in the context of collaborative problem solving), and encouragement of informal groups outside the formal organizational structure, and distribution/decentralization of PSP management activities intended to enhance all of these processes.
A new book, discussing Toyota in detail is Steven Spear’s Chasing the Rabbit. Spear not only discusses Toyota in his book, but also Alcoa, the US Navy Nuclear Power Propulsion Program, Pratt and Whitney, Avenue A (now aQuantive), Asin, Taiheiyo, NHK, (the last three Toyota suppliers), and a number of hospital cases including Massachusetts General Hospital (MGH), a division of Partners Health Care, and Virginia Mason Medical Center (VMMC) of Seattle Washington. While it’s not clear that problem solving in all the cases discussed fits the Open PSP, there’s enough detail in Spear’s analysis to suggest that Alcoa, the US Navy Nuclear Power Propulsion Program, Asin, VMMC, and significant components of MGH have institutionalized an Open PSP pattern.
Spear discusses these and some anti-pattern cases in the context of a broader conceptual framework focused on the idea of the capabilities of “Rabbit Organizations.” In our next blog, we’ll discuss how Spear characterizes rabbit organizations, and we’ll relate his framework to our own views on PSPs and Open PSPs.