What Makes a Creation Company?

29.03.2016 |

Episode #2 of the course “Creating creation companies” by Barry Mapp

 

A creation company is a place (business) where the work systems, processes, culture, management, and work leadership align with how people work best.

Such alignment can lead to extraordinary results. When organizational systems no longer get in the way of work, then human spirit, joy at work, and passion unfold. When alignment happens between people and systems, work flows unimpeded by artificial constraints, boundaries, controls, or hierarchy. When work is aligned with how people work, every person is able to perform at their very best, and everybody has the opportunity to have pride in their work. When there is this alignment, individuals have a sense of control or influence over the work they do, and they have a sense of responsibility for their work.

 

Fundamental Principles for Establishing a Creation Company

McGehee proposes three fundamental principles for the establishment of a creation company:

  1. A leadership style free from command and control

  2. A corporate culture valuing individual expression and collaborative work

  3. An understanding that success means creating the new, not replicating the old

In my personal view, there are two additional principles required to establish a creation company ethos. They are:

  1. The removal of all seven “deadly diseases” of management (see below), which are endemic in compliance companies

  2. The application of “New Psychology” to “how we do things around here.” This includes continually applying new knowledge (as it is acquired) about the brain, learning, thinking, and human potential. (There will be more about psychology later in the course.)

 

The seven deadly diseases of management, as originally outlined by Deming, are:

  1. Lack of constancy of purpose to plan products and services that will have a market, keep the company in business, and provide jobs

  2. Emphasis on short-term profits and short-term thinking (the opposite of constancy of purpose to stay in business) fed by fear of unfriendly takeovers and push-back from bankers and owners for dividends

  3. Evaluation of performance, merit rating, or annual reviews without an understanding of the mathematics of natural variation

  4. Excessive mobility of management and job hopping, where people are not in a job long enough to properly understand the business they are in while adding to their CV their own perceived short-term successes, which usually result in problems for the company further down the line

  5. Management by use of only visible figures, with little or no consideration of figures that are unknown or unknowable

And particularly in America (but now becoming more and more common in other parts of the world):

  1. Excessive medical costs

  2. Excessive costs of liability, swelled by lawyers who work on contingency fees

We can see that little progress has been made with any of these diseases!

Since Deming’s death, John Hunter has added two further diseases to the list:

  1. Excessive executive compensation

  2. A dysfunctional intellectual property system that is greatly harming the ability to innovate. Instead of encouraging innovation, patents are often doing the exact opposite. In the intellectual property area, copyright extension for previously created works is the most obvious exceedingly bad practice, but there are plenty of others, such as a system that encourages patent trolls, for example.

 

Further reading

John Hunter – additional insights into the deadly diseases of western management

 

Recommended book

“Out of the Crisis” by W. Edwards Deming

 

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