Friday, January 25, 2019

Chain Reaction

Eli Goldratt, author and management guru, would say that the 80:20 rule doesn’t apply when elements of a system are interrelated. One percent of your system’s characteristics influence 99% of the outcomes because, like a mechanism of meshed gears, a change in one place influences what happens in another part of the organization. Similarly, you may have heard that you need to ask “Why?” five times and then you’re likely to get to the root cause.
Charles Duhigg in The Power of Habit relates the experience of Paul O’Neill who wanted to tackle the relatively bad infant mortality rate in the US. His team discovered it was due to premature births, which was in part due to poor maternal nutrition. Young mothers had poor nutrition because they weren’t taught; they weren’t taught because teachers in high school didn’t understand nutrition well enough. So his team dealt with nutrition education at the college level so that high school teachers could educate future mothers. Infant mortality has dropped 68%.

We end up with a lot of procedures because we had a problem at one time and it solved the issue, maybe. Or it was a workaround. But it may not have gotten to the root cause, so we end up with policy on top of policy and procedures that have gone from 3 steps to 15 steps. That’s especially true if we can’t fix the problem.

Here’s an example of an issue with a root cause that can’t be solved, but can be accommodated. School systems are short of money when students leave the district, or the population is less boom-y. When school districts struggle, fewer people move into the district. House values decrease. And this also means less money available for the school district. The tax base shrinks. How do you fix this? In many areas, schools are funded on a per-pupil basis, which is fine when the student population is coastal states, suburbs and other desirable places to live. It’s not good for others. A school district can lose 25 students across 13 grades (K-12) which means the loss of 1-2 teachers; the loss in students is not limited to a single grade. It’s like across-the-board cuts in businesses that impact revenue-enhancing efforts, as well as cost centers. It’s also not how costs in the school system are incurred. The only variable cost related to the number of students are the class materials. Facilities and faculty are fixed costs. We can’t stop people from moving out of the district and we can’t force or encourage people to have babies (though a Scandinavian country is trying!). What if schools were funded in a way that accounted for this dissonance in the perspective of how schools operate? Set a standard class room size (20 students for lower and higher grades, 30 students for middle grades, for example). Fund the teacher and class room. The district doesn’t lose money when they lose 25 students because there isn’t a single class that’s cut. When the district loses 25 students in a single grade level, then it loses funding because they can legitimately cut a staff position. Otherwise, the funding remains the same; it also remains the same until another class at a particular grade level needs to be added.

Like many issues, there are relationships that need to be fleshed out. Perhaps some history of how we got ‘here’ and if those conditions still exist or the assumptions are still correct. Test the paradigms; test the assumptions. Test the solution that it will get at the root cause.

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