Two fish swim past each other. One says, “The water’s lovely.” The other replies, “What’s water!?”
Like water for fish, a business’s management system is so all-encompassing that it can easily escape our awareness. And yet, it has inescapable influence, whether we’re aware of it or not.
What is the management system?
Think of the management system as the central nervous system of a business. It’s the architecture of processes that plan, monitor and regulate performance. It determines what gets measured, how information is used, and – crucially – what happens when problems arise. When designed and run well, it promotes coherent day-to-day functioning and enables ongoing strategic adaptation.
What makes it so important?
The management system touches every person and every activity, shaping culture and influencing people’s attitudes and behaviours. An excellent management system will:
- Equip people with effective processes and the correct information, tools, materials and training to do their job successfully
- Use data effectively to provide useable and timely performance information to allow people to run, manage and improve their processes
- Engage people in an ongoing constructive dialogue that enables them to understand, manage and improve their processes to achieve sustainable success
Conversely, when management system design is neglected or overlooked, this can result in:
- ‘Initiative-itis’: A sprawl of improvement initiatives, not effectively executed or integrated within a coherent strategy
- Unrealistic targets
- Misaligned measures that promote focus on the wrong things
- Poor process quality and high cost of poor quality
- Reactivity: Improvement focus is sporadic and not built in to standard work at all levels
Think of the management system as the central nervous system of a business. It’s the architecture of processes that plan, monitor and regulate performance
Building an effective management system
There are two essential, interrelated components to an effective management system. Both should be carefully designed and continually optimised to work in concert:
- The strategic management system:
- Defines business purpose, values and goals
- Monitors externally to track the status of markets, technology, legislation etc.
- Identifies and plans to develop the core capabilities required to succeed, now and in the future
- The operational management system:
- Manages demand, resourcing, processes and end-to-end flow
- Integrates continuous improvement and strategic implementation into operations
- Supports effective communication and engagement
Together, these two systems choreograph action across the business, optimise performance at all levels and bring the right degree of both resilience and agility.
Conclusion
While technology, company structure and behaviours are often the primary considerations when seeking to improve business performance and culture, the impact of improving these is likely to be superficial if there are weaknesses in the underlying management system that go unaddressed.
So, if you’re leading an organisation, think of the management system as your tool for creating the environment in which people can perform and thrive.
What opportunities would an optimised management system help you unlock?
Let’s get to work
Over 27 years of practice, we have developed a comprehensive, time-tested and field-proven business-improvement model and toolkit. We partner with ambitious businesses to identify strategic breakthrough opportunities in capability, performance and results, and we provide the tools, support, training and coaching to complement their existing expertise and help them achieve these.
If you’re aiming to build or optimise a business system using sound principles, values and standards to deliver consistently excellent and continuously improving results, we can help you develop and implement a strategy to accelerate progress and amplify the impact of your journey.
To get in touch, contact us here to book a free consultation.
Discover more of our tools and methodology in our book Toward Excellence.
