{"id":4695,"date":"2018-05-31T00:00:00","date_gmt":"2018-05-31T00:00:00","guid":{"rendered":"http:\/\/localhost:10003\/the-lean-post\/articles\/the-formula-for-a-successful-management-system-lb-os-ms\/"},"modified":"2024-06-26T10:53:51","modified_gmt":"2024-06-26T14:53:51","slug":"the-formula-for-a-successful-management-system-lb-os-ms","status":"publish","type":"post","link":"https:\/\/www.lean.org\/the-lean-post\/articles\/the-formula-for-a-successful-management-system-lb-os-ms\/","title":{"rendered":"The Formula for a Successful Management System: LB * OS = MS"},"content":{"rendered":"\n

Time and again, I have seen companies that struggle to create an effective management system pay the price in their performance. Indeed, research<\/a> that looked at the management practices and performance of 12,000 firms from across 34 different countries reveals that healthy management and operational excellence are a competitive advantage: \u201cIf you look at the data, it becomes clear that core management practices can\u2019t be taken for granted\u2026 Firms with strong managerial processes perform significantly better on high-level metrics such as productivity, profitability, growth, and longevity. In addition, the differences in the quality of these processes \u2014 and in performance \u2014 persist over time, suggesting that competent management is not easy to replicate.\u201d <\/p>\n\n\n\n

The authors behind the research further note, \u201cAchieving managerial competence takes effort, and it requires sizeable investments in people and processes throughout good times and bad. These investments, we argue, represent a major barrier to imitation.” <\/p>\n\n\n\n

I agree, and in our book, Designing the Future<\/a><\/em>, my co-author Jeff Liker and I share our belief that, while the term management system is used in different ways, we believe a management system is the product of two elements \u2014 leadership behaviors and an operating system (LB*OS=MS). If either multiplying factor is weak, then the resulting product is diminished. <\/p>\n\n\n\n

Leadership behaviors and your operating system are interdependent. There is no operating system you can possibly devise that can anticipate every possible failure mode or compensate for incompetent leadership. When companies try to do this, though often well-intended, the result is a suffocating bureaucracy.  As W. Edwards Deming said, \u201cA bad (operating) system will beat a good person every time.\u201d <\/p>\n\n\n\n

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Good leaders energize and bring life to a management system, and an effective operating system can focus and magnify leadership effectiveness just as a poor one can diminish it.<\/p>\n<\/blockquote>\n\n\n\n

A strong management system requires you to strengthen both elements. You can\u2019t (and shouldn\u2019t) take people and their skills and judgment out of the equation. Good leaders energize and bring life to a management system, and an effective operating system can focus and magnify leadership effectiveness just as a poor one can diminish it. A great deal has been written about good leadership, but what is an effective operating system?<\/p>\n\n\n\n

Creating an Operating System<\/h4>\n\n\n\n

An operating system is made up of the tools, processes, standard work, cadenced activities, and other mechanisms that enable the work to get done. If a leader is the craftsman, then the operating system is his or her collection of tools. But a good operating system is far more than the sum of its parts.<\/p>\n\n\n\n

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If a leader is the craftsman, then the operating system is his or her collection of tools. <\/p>\n<\/blockquote>\n\n\n\n

An effective operating system moves an organization toward its objectives in order to accomplish its mission. It creates a cadence of regularly occurring management activities instead of episodic management interventions. It is a single, integrated system, not a hodgepodge of departmental plans that do not hang together. It is transparent, multileveled, and cascades throughout the organization. It establishes objectives, allocates resources, and provides clear, aligned roles and responsibilities in order to deliver the plan. It provides the structure that enables (or inhibits) people to do their work. It knits together and drives critical value-creating activities, such as strategy deployment, continuous improvement, new product delivery, people development, and working environment, manufacturing, and supply chain. Finally, the operating system provides performance feedback on how you are doing.<\/p>\n\n\n\n

An effective operating system helps bring strategy to life. It synchronizes critical activities, enables the organization to respond quickly to a changing environment, and allows plans and teams to move together. And when executed with discipline and coupled with effective leadership behaviors, it provides a tremendous competitive advantage for any organization.<\/p>\n\n\n\n

An operating system should accomplish six basic things:<\/p>\n\n\n\n