Tips for MBM

I.

To avoid misapplication of the MBM system, one must recognize that it is a holistic system. Its real power is in the underlying philosophy and its integrated application, not in the form or the parts. Those who have gained only a conceptual or procedural understanding, but not personal knowledge, tend to misapply it.

For this reason, before an organization can successfully apply MBM, its leaders must gain personal knowledge through a dedicated commitment to understanding and holisticslly applying MBM to achieve results.

II.

Another misapplication involves the trying to apply MBM vie prescribed, detailed steps, rather than by teaching and reinforcing its philosophy and providing useful tools (models). Instead of developing RR&Es or improvement initiatives using the joint knowledge of supervisors and employees, we have, at times mistakenly dictated their content.

Ej. Compliance programs have sometimes been implemented through bureaucratic procedures, rather than by setting the standards and expectations that enable people to innovate.

III.

Our project analysis process, the Decision Making Framework (DMF), is intended to be applied in a manner that is a s simple as possible but no simpler. The DMF when applied properly can allow to reduce substantial waste or even avoid unprofitable projects (pg 37-38). In all DMFs, the key bets need to be identified and analyzed and the underlying assumptions verified.

But the extent of the analysis and verification should vary tremendously according to the risk/reward, size, complexity and regulatory requirements of the project.

IV.

When MBM is applied bureaucratically as a rigid formula, it is not really MBM. Fundamental to MBM is the principle of spontaneous order, in which we provide general rules to enable people to innovate by challenging the status quo.