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Results are not the Point?

Sal DiStefano
Ranch Hand

Joined: Aug 28, 2002
Posts: 90
I'm curious about the title. Leading Lean Software Development: Results Are not the Point.

I would think the results are everything. We use certain methodologies and practices to get the results we desire. How is it that Results are not the Point?
Mary Poppendieck
Ranch Hand

Joined: Oct 04, 2006
Posts: 62
The idea here is that an organization cannot generate consistent results over the long term by focusing on the results, the organization that survives must focus on developing the people and the system that will generate the results.

Let me give you an example. Svenska Handelsbanken is one of the top 25 banks in Europe. It was the only bank that survived the Swedish banking crisis in the 1990s without asking for government support— and it has also done very well in the 2008/2009 crisis. When Jan Wallander became managing director in 1973, he was an economist turned bank executive who understood one thing: every 15 or 20 years there will be a major economic crisis. And no one will be able to forecast it in time, no matter how obvious it looks in retrospect. So he stopped letting the bank chase after growth. He then moved all power in the bank to branch managers, and focused on growing these managers so that they would make effective decisions. He developed a few key measurements that would encourage the right behaviors on the part of branch managers. He kept loan decisions at the branch level - even big loans - with guidance and support from small regional and central staff. But the idea was to develop the right people and the right behaviors (not ones driven by the former growth metrics - behaviors which kept the long term viability of the bank uppermost in the minds of the branch managers).

Over time, Handelsbanken's performance steadily improved, but the real test came during economic downturns, when other banks lost money badly and Handelsbanken stumbled just a little, and quickly regained its footing. The idea here is that Jan Wallander did not focus on delivering to shareholders increasingly superior results. He focused on developing the systems and people which would deliver increasingly good results over the long haul. It is the undisciplined focus on short term results at the expense of the long term health of an organization which has gotten many, many companies in deep trouble.

That's what I mean by results are not the point. Leaders' real responsibility is to develop the people and the systems that will deliver results long after then are gone.

Mary Poppendieck
I agree. Here's the link:
subject: Results are not the Point?
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