Filed under: Systems Thinking
What does this…
Have in common with this
Gas fires are very popular – albeit nowhere near as nice as a real fire, they have the advantage of being easily controlled, mess free and safe. They come in a box, can be bought to order and installed with relative ease.
At noinstantpudding.com’s global HQ we have a gas fire. It is in our palatial boardroom (the lounge). At this time of year noinstantpudding.com’s CEO (my wife) likes nothing better after the school run than coming home, flicking the central heating on and whacking on the gas fire to get the lounge nice and toasty. Lovely – even the cats (noinstantpuddys) love it, lounging elongated under the warmth, while the children sonofnoinstantpudding #1 and sonofnoinstantpudding #2, play in their bedrooms.
But study the heating of the home as a system and a gas fire is not all it’s cracked up to be; you see our home’s heating – like many others, comprises the following components;
- Gas-fired boiler feeding a radiator in every room, two in the lounge
- Gas fire in the lounge
- Double Glazed windows and doors throughout
- Loft Insulation at a depth that makes the loft look like a scene from Lapland
- Cavity Wall insulation
But like any system, you cannot understand it fully by just the sum of its parts. The other component necessary to understanding the system is the interactions between those parts, and the effect of those interactions on the whole;
- The gas-fired central heating system is controlled by a timer which can be set so that the heating comes on the in morning or evening, or permanently OFF or permanently ON
- It is regulated by a thermostat located in the lounge – when the heating system is running ON and the temperature in the lounge is lower than the setting on the thermostat, the heating system is activated, the radiators heat up and the temperature in the house rises until the desired temperature is reached, then it switches off the system again until the temperature falls below the desired temperature
The thermostatic control of the temperature is an example of a balancing feedback loop. Balancing loops help to keep the system stable – in the case the desired temperature is maintained. However, if you add the interaction of the gas fire into the equation, the balance is disturbed;
- If you whack on the gas fire, the temperature of the lounge increases in response to the additional input of heat, but the temperature of the remainder of the house continues to be governed by the output of the radiators
- Given that the thermostat is located in the lounge, with the addition of the input of heat from the gas fire, the desired temperature of the room is reached faster, and the thermostat switches off the heating system
The system is now out of balance – the upstairs bedrooms will not have reached the desired temperature so they they will be cold whilst the lounge is lovely and warm. Poor children!
- Sonofnoinstantpudding#2’s bedroom is above the lounge, so whilst the radiator will now be off, the cooling will be in part compensated for by the warm air rising through the thin lounge ceiling and into their bedroom
- Sonofnoinstantpudding#1’s bedroom is above the garage (which is not heated and who’s walls are not insulated) and therefore when the radiator goes off, with no warmth from the garage underneath to radiate upwards, the room cools very quickly. In addition, one the side of the room is north-facing so whilst the cavity wall insulation helps to retain some of the heat of the room, the room loses heat faster than other rooms
Predictably, Sonofnoinstantpudding #1’s bedroom is the coldest room in the house. (Although in summer, it is the most comfortable, unless it is evening and sunny in which case it is like a greenhouse but that’s another story).
Cause and effect is never as linear as it might seem at first. Whacking on the gas fire doesn’t improve the temperature of the whole house. Whacking on the gas fire is a local optimisation.
No one component of a system can perform the function of the whole – the components must interact correctly. The whole is optimised only when the interactions between the parts are optimised to meet the purpose of the whole, even if that means the part is sub optimised as a result. Orchestras do not produce beautiful music because everyone plays their instrument at once.
When organisations seek to improve themselves, unless this is done with an appreciation of a system (knowledge of the organisation’s parts and the interactions between those parts), it predictably results in a local optimisation. It makes the lounge warm while the children freeze upstairs. Classy.
It is possible to improve the performance of each part or aspect of a system taken separately and simultaneously reduce the performance of the whole.
Dr Russell Ackoff
Filed under: Systems Thinking
What does this….
have in common with this…
Answer: neither is a purpose
Agile delivery teams are very interested in velocity. Velocity is a backward measure and forward prediction of the amount of work an agile team can churn through over time. The unit of measure is normally story points, an abstract concept that represents some combination of functionality, size, complexity and value to the product.
Managers pay attention to velocity, they expect to see it increase over time.
Velocity is a useful measure, it helps a team to plan and gives a degree of insight into future performance. Velocity could be put to other uses as well if it were plotted to demonstrate variation over time and to elicit knowledge of causes of variation. You can do something useful with that data.
There is nothing wrong with measuring velocity, except when velocity becomes the de-facto purpose of a team.
The purpose of an agile team is to add value to the product. Velocity is an incidental measure of this.
Product owners alone cannot prioritise backlogs to maximise value. Agile is a collaborative approach to development and to wring every bit of value out of that collaboration, everyone needs to have one eye on measures of value to the end product.
Agile teams need to understand value to add it and that is the only real purpose.
Filed under: Systems Thinking
This is Peter
This is Jane
Jane likes her toys
Peter’s bedroom is untidy
Jane’s bedroom is untidy
Peter thinks his bedroom’s purpose is to store his toys so that they can be accessed with the minimum effort.
Jane thinks her bedroom’s purpose is to provide security, restful sleep and safe recreation.
Peter and Jane’s mother and father are cross. Peter and Jane’s bedrooms are messy.
Jane puts her toys away in their drawers.
Peter commissions an architect to have the room reshaped to fit the current shape of the pile of toys in his room.
Jane has the perfect bedroom, it is secure, gives her restful sleep and she knows exactly where to find every toy when she needs it.
Peter thinks he has the perfect bedroom. He can see all his toys, all the time and now the room has changed shape he doesn’t need to tidy them up. However, he has noticed that he keeps stepping on toys and breaking them…
… and sometimes his toys fall over creating a new pile….
… so it seems to take longer to walk from the door to his bed now.
25 years later…
This is Peter
This is Jane
Peter is a senior leader in a large Corporation
Jane is a leader in a large Corporation but not as senior as Peter
Peter is worried, things aren’t going too well
Jane is worried, things aren’t going too well
Peter thinks that the problem is the people are lazy and incompetent
Jane tells Peter that Deming found that 95% of the performance of an organisation is the product of the organisation design, tools, methods and processes and not the people within it.
Peter sacks Jane
Peter hires a Management Consultancy with a brief to fix the Corporation’s problems…
…..he says that no ideas are off the table, except those that threaten his toys, or expose the flawed decisions that lead to the problems in the first place….
Peter makes it clear than any conscientious dissenters are not “part of the solution”
The management consultancy hand Peter a report and a bill…
Peter Implements the report, and waits patiently for the toys to tidy themselves up…
… two years later…
Peter is worried, things aren’t going well…
Filed under: Systems Thinking
Traditional Management Approaches are the Equivalent of Walking Around with One Eye Closed
The brain interprets signals from the eyes to interpret the outside environment. This information informs the vital decisions we make in real time, all the time, for example; an interpretation of the speed of an oncoming vehicle informs an analysis of whether it is safe to cross the road or not. This information reaches our brains in 3 dimensions, vertical, horizontal and depth. Without the third dimension of depth, these decisions would be based on an incomplete analysis and could easily result in dangerous actions or inactions as a direct consequence.
Modern organisations are founded on values, beliefs and assumptions that derive from reductionist, analytical thinking. Reductionism is the process of forming an understanding of a subject as a set of parts taken separately in the belief that the sum of the understanding of the parts constitutes an understanding of the whole. However, this view of a subject misses a vital dimension; the interactions between the parts.
Examples of 1 – Dimensional Thinking in Organisations
- Treating people as “resources” or “FTEs” or commodities that can be horse traded. Humans experience emotional and intellectual connections with their work that are systematically ignored in modern matrix structures.
- Process Improvement / Functional Transformation. Endeavours to create functional efficiencies without knowledge of the interactions of the function with the whole, will predictably result in local optimisations to the detriment of the whole. In other words, they move the problem somewhere else.
- Blind adoption of standardised work design. If you remove a petrol engine from a car and replace it with a diesel engine, you shouldn’t be surprised when it fails to start. If you introduce a new industry standard work design into part of an organisation (e.g. ITIL, Agile, Prince2, CMMI, ISO xyz, whatever) without knowledge of the re-wiring and plumbing that will be required in the rest of the organisation to make it fit – you shouldn’t be surprised if it fails. But that’s exactly what we do – buy a new process or tool in the blind hope that this time it will fix the problem we perceive.
The Multidimensional Organisation
Systems Thinking is the discipline of understanding a subject as the product of its parts and their interactions, in the context of the whole. Plenty of Systems Thinkers have developed pragmatic organisation design principles (Deming, Ackoff, Seddon, Senge et al) that are proven to yield compelling performance improvement over their reductionist equivalents.
Holism, Systems Thinking, appreciation of a system; call it what you like, running an organisation without knowledge of the dimension of interactions is like walking around with one eye closed – so if we continue to do that, we shouldn’t be surprised when we bump into something painful.
The perfect Spaghetti Bolognese has for too long been the preserve of an elitist class of foodies, Italian artisans or locked away in secret family recipes. Today, noinstantpudding.com is delighted to announce the Modern Manager’s Guide to Spaghetti Bolognese – the result of years of painstaking research into how culinary perfection can be obtained by adopting modern management principles. Want to know more? Read this case study from the Hotel Command & Control Restaurant;
Bolognese a la Command and Control
The Hotel Command and Control has been losing money for a number of years; occupancy levels have been below the industry benchmark and the cost of running the kitchen exceeds the revenue generated by the restaurant. Under new Management, the Hotel has taken the innovative step of trialing the Noinstantpudding Method for the Production of Spaghetti Bolognese (NIPMftPoSB), to produce its biggest selling dish, that 1970s classic the Spag Bol;
The first step was to create an organisation that is capable of delivering against the Hotel’s Strategy of producing the perfect Spag Bol – in order to this, they needed to transition to a new organisation structure that reflects the ingredients of the recipe;
As you can see, the organisation has been structured into two distinct Divisions, Production – responsible for the creation of Customer Outcomes, and Functions – responsible for the efficient provision of supporting services to the Production organisation and the realisation of significant economies of scales that come from sharing support services.
The next step was, to avoid re-inventing the wheel, to transition to two new industry standards (a) the Standard Bite Size (SBS) model – which will ensure uniformity of all ingredients against the industry benchmark of 7mm per ingredient. If your organisation has not used SBS before, full training should be provided (subject to you providing a business case with an immediate payback)
(b) DHRH2 – De-hydrate / Re-hydrate – this is a preparation model proven in the fast food industry over decades, and has been refined (version 2) to be used by all food preparation organisations. A DHRH2 compliant organisation should have 75% of all ingredients supplied using this model. The Hotel engaged with Global Dehydration Partners (GDPs) to source the finest de-hydrated ingredients available on the open market, and appointed a team of re-hydration engineers, reporting to the Re-hydration Manager to return all ingredients back to their original pre-dehydrated state. The Re-hydration Manager and engineers report to the Head of Functions to ensure a transparent and objective decision making process is in place that demonstrates good governance.
In order to ensure that Recipe Managers do not make unnecessary rehydration demands for meals, all requests for rehydration are prioritised and approved by the Rehydration Steering Group (RSG). To enable swift and accurate decision making by the RSG all Recipe Managers complete a weekly Re-hydration plan and the Ingredient Coordinator completes a weekly Ingredient status report. The Hotel’s aim is for 95% of all meals to be fulfilled through some element of re-hydration. Recipe Managers are paid a rehydration bonus where they meet this level. The Director of Dishes personally chairs the RSG, except for when they are too busy and then it is chaired by the Head of Functions.
The Hotel recognised the need to be world class and best of breed in all its endeavours. As a consequence, it decided to remove the role of Chef from the organisation, to allow staff to focus on perfection in all ingredients. To support this transformation they created Centres of Excellence. Each of these Centres of Excellence is run by Managers who are accountable for the best possible ingredient outcomes;
– Unit Cost reduction
– Compliance with SBS regulations
– Staff Utilisation (Target 90%)
– Minimised Food Waste
Recipe method has been vastly simplified through the world class ingredient engineering processes that have been created. Given that all the ingredients have been optimised for perfect, the creation of the meal itself is a simple matter of assembling all the ingredients and heating them in a pot.
The Hotel has recognised that the creation of a meal through this method needs to be carefully coordinated, so they created the role of Recipe Manager – with end to end accountability for the successful delivery of meals to Customers. In order to ensure Recipe Managers are delivering the best possible Customer outcomes the Recipe Managers are measured and assessed against;
– Meal preparation Speed (rolling 3 month average)
– Compliance with SBS regulations
– Any deviations from the recipe ingredients or method
Two other key positions, reporting to the Head of Functions are;
(a) Quality Assurance Manager – responsible for ensuring that Recipe Managers are compliant with SBS, DHRH2 and standard preparation methods
(b) Procurement Manager – responsible for leveraging the Hotel’s bulk buying power to minimise the cost the Hotel pays for ingredients. The Procurement Manager is accountable for the delivery against the Hotel’s cost reduction target of 20% across all ingredients, whilst maintaining a just-in-time availability of contingency fresh ingredients in the unlikely event that stocks of dehydrated ingredients are depleted. In addition, the Procurement Manager is responsible for the transition to a 95% DHRH2 compliant kitchen through sourcing of ingredients from GDPs
Finally, although not shown on the Structure Chart, the incumbent Waiting Staff have been transitioned to the role of Customer Service Champions. They are incentivised to deliver against the following world class Customer meal outcomes;
- Number of Complaints
- Number of Returns
- DPS (Diner Promise Survey) – the Hotel’s world class thermometer of customer satisfaction – NDS Score*
- DPS completion rate (Target 95%)
Posters have been placed in all staff assembly areas to remind them of their responsibilities to deliver against the DPS.
*NDS = Net Digester Score – Customer scores the meal in reponse to the following question “On a scale of 1 to 10, how likely are you to retain the meal you just ate in your digestive system?” – a score of 8 or less makes the Customer a “Regurgitator”, 8 or more a “Digester”. Any Customers that fail to complete their meal will be treated as outliers and excluded for calculation purposes.
If you would like your organisation to be an early adopter of this innovative approach please contact us at noinstantpudding.com. Alternatively, you could continue to run your organisation along the following principles, and achieve largely the same results;
- Standardise the work
- Centralise decision making
- Extrinsically motivate staff and make them accountable for outcomes that they have only superficial influence over
- Screw your Suppliers
- Ensure at all times that the organisation is distanced from the value work which is after all, a distraction from the core activity of maximising the next reporting period’s financials
- Use Targets to improve performance
- Ignore variation and stick with averages
- Create a Management factory – they know best
- View your organisation and its products as a set of parts, don’t worry about the interactions
- Measure and chase Outcomes not performance drivers
- Ensure those Outcomes are nice and easy to understand – don’t let the Customer cloud your vision
Hard work and best efforts, without knowledge from outside, merely dig deeper the pit we are in.
W Edwards Deming
What does the two headed monster at the heart of the Corporation have in common with rats and pigeons?
As we approach the end of the financial year, thoughts are turning to performance pay and bonus reviews for employees of organisations of all sizes. This “best practice” is firmly established in the Corporate mindset and even used by employers to entice job candidates on the promise of “performance related pay”, so it must be a good thing right?
On paper it is very plausible – and the intent is quite noble;
- Pay people fairly for their contribution to the performance of the company
- Give people an incentive to perform better (and therefore the company reaps the benefit)
- Provide a structured, consistent method for assessing performance and professional development
What’s not to like?
The Two Headed Monster
Head 1 – Extrinsic Motivation (a.k.a Merit Pay or Performance Related Pay)
BF Skinner’s experiments with rats demonstrated the notion that behaviours can be induced in animals through a combination of positive reinforcement (reward what you want) and negative reinforcement (punish what you don’t want).
This research was subsequently adopted by organisations as the foundation for the motivation of human beings in the work place;
- meet your targets – get a bonus
- meet your objectives – get a pay rise
- don’t meet your objectives, get nothing (that’s a pay cut in real terms)
Sound familiar? Incidentally, BF Skinner is also credited with the invention of the pigeon guided missile. His employers may have taken him too literally when he wrote “enjoy working with animals” on his CV.
In Summary, the belief that drives the first head of the monster is that you can drive human behaviour to have a positive effect on the organisation through extrinsic means.
Why extrinsic motivation is not effective;
Performance = System
Empirical data shows that the primary driver for the performance of an organisation is the design of the organisation, its associated processes, tools and methods. Deming is famously credited with the 95/5 rule, where 95% of the performance of the organisation comes from the system, and 5% from the people. Whether you take these numbers at face value (the actual split did vary over time but fluctuated around 95/5) or whether you take them as indicative, the message is overwhelmingly clear – the primary driver is the system not the people.
Now, given the above, it follows that people who are financially rewarded or punished for their on the job performance over the year have a minimal influence of the outcomes they are asked to attain and the only real variable that they can control is effort which of itself may not yield any improvement. The remainder is outside of their control. It comes down to whether you get a good assignment or a bad assignment, in other words whether you got a lucky or unlucky dip out of the inherent variety in the work you do. Deming demonstrated this using the famous Bead Experiment – see here for a rather charming demonstration of it in action.
Deming summarised the effect of the use of the merit system beautifully in just one word – cruel.
If does not improve the performance of the whole
Merit pay creates internal competition between people and departments within the workplace. Think of a software development team that is rewarded for producing high quality software on time, working with a software testing team that is rewarded for finding defects in the output of the development team. Logically, only one of these two teams can win; if the software development team produces high quality software on time, the testing team won’t find any defects, or if they do find defects, the software development team won’t have created a quality product. In reality, in an attempt to survive in the current system both teams will likely distort the system or the measures. The outcome – the organisation loses.
The Science of Motivation
There is some very compelling science that challenges the beliefs behind the work of Skinner on extrinsic motivation. Dan Pink’s famous talk on The Surprising Truth About Motivation eloquently demonstrates the rather obvious fact that in the vast majority of cases, people turn up to work to do a good job and take pride in their work – in other words, people are naturally intrinsically motivated to perform well – what they need, is not extrinsic reward but a well-designed system to work in which requires managers with the cajones to change it.
Head 2 – SMART Objectives
If you work in an organisation of any appreciable size it is highly likely that your job performance is “managed” through a review process, sometimes annual, sometimes more frequently. This is more often than not linked to pay progression and/or the award of bonuses. It is also highly likely that this process is linked to the achievement of targets or objectives.
The underlying beliefs are twofold;
- It is a fair/structured way of managing performance
- The organisation benefits from a more engaged workforce and the positive effects of the objectives having been met
HR practitioners the world over advocate the use of SMART objectives;
Why SMART objectives are far from smart
I think the acronym SMART can be taken from some different words;
Siloed – the use of individual objectives and their subsequent linking to financial reward creates internal competition that damages the performance of the whole.
Mismeasured – vary rarely do organisations understand variation in performance in a scientific way. The prevailing dimension used to measure performance is the average. The problem with averages is that they remove the possibility of gaining knowledge about variation, its causes and the resultant predictable capability of a particular process. For example, imagine a worker who’s job is to complete a process. This process has inherent causes of variation (widgets may be faulty, there may be upstream delays etc). Given this variation there will be a range within which the process will perform irrespective of the worker involved no matter how hard they try. This range is calculated based on the variation in the process performance data and is known as the Control Limits or Process Limits. Now if you set a worker an objective to increase (say) speed per unit by 15% but this increase is beyond the Control Limits of the process, they are guaranteed to fail, or distort the system. The only way to achieve any improvement is to find the causes of variation and design them out of the system.
Arbitrary – Numerical objectives or targets are normally based on numbers plucked out of thin air; they are arrived at through absolutely no knowledge of variation whatsoever therefore they are completely arbitrary.
Reductionist – by linking different objectives to different individuals, management create distance between the individual and purpose. Their de-facto purpose becomes “meet the objective”.
Tampering – managers assigning objectives or targets to individuals that are arbitrary and defined without knowledge, are unwittingly tampering with their system. Tampering happens when management make assumptions about the cause of (often flawed) performance measures and then take decisions to address the perceived problem. It also happens when management take decisions to address problems in a system that appear as “trends” but are in fact just a product of the inherent variation in the system. In either case, the likelihood is that the result will be an increase in variation and therefore a decrease in performance. Individually assigned objectives are just small instances of tampering in high volumes – death by a thousand cuts.
SMART Objectives are Siloed, Mis-measured, Arbitrary, Reductionist Tampering.
No Instant Pudding
A Better Way
Stop grading people like supermarket fruit, and treat them like human beings
“Abolish it!” – W Edwards Deming (on the merit system)
Build a system that provides….
“Autonomy, Mastery and Purpose” – Dan Pink
Share the rewards of success with the whole – because that’s where it comes from.
Modern organisations employ professional coin flippers to make decisions.
Deming, Seddon and Checkland all advocate making decisions and making change based on knowledge – but what exactly is knowledge, and how to do you know when you have it?
Russell Ackoff wrote of a hierarchy of content in the human mind starting at the lowest level with data, moving up to information, knowledge, understanding and ending with wisdom. He also rather helpfully calculated that given the adage that an ounce of information is worth a pound of data, an ounce of knowledge is worth a pound of information, an ounce of understanding is worth a pound of knowledge and an ounce of wisdom is worth a pound of understanding, an ounce of wisdom is worth approximately 42,000 ounces of data.
Knowledge type content sits in the middle of this hierarchy, so what is knowledge and how do you know when you have got it about a subject?
Rather helpfully Deming gave us a pretty good clue in his System of Profound Knowledge, a set of four interacting principles for operating and improving organisations. The four principles are as follows;
- Knowledge of Variation
- Appreciation of a System
- Theory of Knowledge
- Knowledge of Psychology
What does the Theory of Knowledge say about how to know when you know?
Theory of Knowledge is another name for a branch of philosophy; epistemology.
Epistemology has origins as far back as the socratic dialogues, and philosophers to this day continue to debate what it means to have knowledge. However, there appears to be some well established arguments that have sufficient merit to work as a test for knowledge for practical rather than academic purposes. Let’s take a look;
Three Types of Knowledge
Epistemology recognises three types of knowledge;
To have acquaintance knowledge is to know someone, for example, I know people in my family, I know my friends and my colleagues. You can have acquaintance knowledge of other things such as places (I know Paris), or sensations (I know the taste and smell of brussel sprouts).
To have how-to knowledge its to have the knowledge of how to do something. I know how to tie my shoelaces and how to ride a bicycle and therefore I have this knowledge.
To have propositional knowledge is to know that a proposition, argument or assertion is true. For example I know that water in its liquid form is wet and that the earth is round not flat.
Given the above definitions, it can be seen that knowledge based decision making is concerned with Epistemic, Propositional Knowledge.
What is the Epistemic Definition of Propositional Knowledge?
Here it all gets rather woolly and since the academics have been debating this for millennia, I’m not holding my breath for anything conclusive. However, amongst numerous tests or definitions of propositional knowledge, the prevailing test appears to be the test for Justified True Belief – JTB.
The JTB test tests for knowledge of a proposition on the following three bases;
- The proposition must be true
- The proposer must believe the proposition to be true
- The proposer must be justified in the belief that the proposition is true
I know that rain is the tear-drops of fairies
- Is this true? (no – rain is made from water) *
- Do I believe it to be true? (no)
- Is my belief justified? (this is a moot point since i don’t believe it but if I did it wouldn’t apply because there is no evidence to support the idea that rain is the tear-drops of fairies)
Given the above I cannot have knowledge that rain is made from the tear-drops of fairies.
* Note the paradox in the test for TRUE – how can you determine whether a proposition is true without knowledge? I’ll leave that to the philosophers – its beyond me!
I know that rain is made from water
- Is this true? (yes – paradox of test for truth aside)
- Do I believe it? (yes)
- Is my belief justified? (yes, our own experiences plus scientific analyses of the content of raindrops show beyond reasonable doubt that rain is made from water, at least primarily)
Therefore, I have knowledge that rain is made from water.
These rather facetious one dimensional propositions are all very well but things get a little more interesting when you add in the dimension of time;
I know that tomorrow morning I am going to be hit by a bus, I just know it
….. fast forward 24 hours…..
….. AND indeed, the next day I am hit by a bus
Did I have knowledge that I was going to be hit by a bus?
- Was it true? (yes, I was hit by I bus) (I wasn’t really)
- Did I believe it? (yes, at the time I believed it was going to happen the next day)
- Was I justified in believing it? (no – I had no evidence or reason to believe it, I just believed it)
The fact that I believed I was going to be hit by a bus did not mean that I knew I was going to be hit by a bus. Belief alone is not sufficient without justification.
Therefore I did not have knowledge that I was going to be hit by a bus.
Very interesting. I believe that if you have read this post to this point you have found the post interesting, and the fact that you have done so, is some justification to my belief that you have found it interesting. I cannot have knowledge of you finding this post interesting or not. So if you didn’t, or for that matter even if you did, here is why it is important;
Making Decisions Based on Knowledge
People make thousands of decisions every day. We decide when to get out of bed, what to wear and what to have for breakfast. These decisions are based on experience and intuition.
We also make instinctive decisions about how to react to the external environment; for example, what would you do if you accidentally bump into someone in the street? Apologise to them or admonish them? These decisions can be made with little if any conscious analysis.
In organisations, as staff and leaders, people are called upon to make decisions that can carry far reaching consequences, both internally and externally. We generally accept that level of decision making is highly considered, informed and not taken lightly. At least that is the belief….is it true?
My proposition is that some of the most critical, impactful decisions made in organisations are made in the absence of knowledge, that in other words, they do not pass the test for justified true belief;
“Our costs are too high, we need to reduce the amount we pay for widgets by 10%” – how do we know our cost problem is related to widgets? how do we know their cost is “too” high? what is the “right” amount? what is the delta? where is the data to give us justified true belief?
Every day in every organisation, decisions are being made without knowledge – they are being made based on assumptions that can only pass the belief test, they are often not justified and are often not true. But this is just a proposition, and one that you would have to test for yourself to determine whether you know it applies to your organisation or not. So why not give it a try? The next time you observe some decisions being made on the basis of a proposition, why not test that proposition for justified true belief, but remember to consider the other elements of Deming’s System of Profound Knowledge in the test for justification;
- Does the proposition consider the impact of variation? If the proposition is based on data expressed as averages or grades – probably not
- Does the proposition consider the wider systemic variables? If the proposition is based on a linear cause = effect argument – probably not
- Does the proposition consider psychological/human variables? Just probably not!
Would you make life changing decisions without knowledge of the variables? Why would you not apply the same rigour to organisation changing decisions?
There is no substitute for knowledge.
W Edwards Deming
Best efforts? We’d be so much better off if some people just took turns going to work.
W Edwards Deming
Dear Orchestra Member
It should come as no surprise that the operating environment in which we find ourselves is currently very difficult. In order to allow our orchestra to continue to operate in this challenging musical and artistic environment, I have undertaken a root and branch review of our operations and I would like to communicate my findings with you;
Poor Utilisation – time and motion studies have revealed that during the last performance of Beethoven’s 5th Symphony, there was a mix of engagement from the Team;
- Conductor 100% utilised
- Brass section 67% utilised
- String section 45% utilised
- Percussion Section 25% utilised but Triangle player 1% utilised
- Woodwind section 14% utilised
The triangle player will be leaving his position within the orchestra with immediate effect, and is now considering options outside of the organisation. He leaves us after 45 years’ service and we wish him well for the future.
I am pleased to announce that the Conductor has been appointed to the position of Director of Frilly Shirts. This is in recognition of the significant contribution he has made to the orchestra over a number of years. His day to day conducting responsibilities will now be dispersed amongst the leaders of each section, with the lead violinist taking overall responsibility.
Observations from our last performance showed that the woodwind section was heavily under used at only 14%. Based on a conversation we overheard in the ticket queue last week that someone preferred string concertos, we believe that demand for Woodwind is reducing. We need to respond quickly to this trend so we have decided to put all players of reed based instruments at risk of redundancy.
We will make every effort to work with those affected to find alternative positions as trombone or violin players should a vacancy arise. In order to improve our capability to respond more rapidly to these scenarios in future, we have decided to appoint a governance and control officer to monitor demand. All players in the orchestra will be required to submit an activity summary report each time they turn the page on their manuscript during a performance. The summary will capture how many notes were played during the last page. We have determined that all players need to play at least 17 notes per page. Compliance against this quota will be captured through a RAG status. Green, 17 or above (no upper limit), Amber 16, Red, 15 or below.
We also recognise that woodwind may be required for future performances so we have engaged with a partner who will provide woodwind services to us in a way that will allow us to flex our woodwind capability up and down in response to demand. The players will be located offshore where they cost a fraction on their local equivalents and we are investing in state of the art technology to enable their output to be seamlessly integrated with the music produced locally. We are aware that most woodwind manuscript is written in the treble clef and that our offshore partners only read the alto clef and we have been assured by the management of our new partners that robust transition plans are in place to address this. Any off-note instances observed during performances should be logged and reported in our quarterly supplier governance meeting. Our supplier has been given a target of hitting 95% of notes on tune and in time, and there are rigorous penalty clauses in place in the contract to remedy any mal-compliance.
Stradivarius violins carry an excessive unit cost – we believe we can make immediate benefits on the bottom line by replacing them with Japanese equivalents made from plastic. An upgrade project has been initiated to make the transition smooth. Each violinist will be approached by a member of the upgrade team at some point during the next performance. We expect the upgrade process to take no more than one hour – in order to ensure this happens as smoothly as possible we would ask each violinist to remove any personalisation or non-standard upgrades from their instrument (tuning screws, strings made from organic matter, bow resin etc).
We have observed inconsistent practices within the percussion section – some drummers are using a higher degree of embellishment per beat than others. In order to maintain consistency we will introduce a standard process for any future drumming activities. All future drumming will adopt the 4/4 time signature and no notes under the length of a crotchet will be allowed.
We are concerned that there is insufficient control and governance around when the conductor instructs certain sections within the orchestra to commence playing and this represents a material risk to performances that must be addressed. To alleviate this, we have created a form that the conductor must complete to engage with each section in advance. This will also help with demand planning and utilisation within each section.
This is just the beginning of our transformation journey. As a modern progressive organisation, we recognise the importance of engaging with and empowering our people to contribute to our transformation. As such we will ask each section within the orchestra to spend some time reflecting on what they think would help their section to perform better. Being the progressive and open management team that we are, we prescribe no method to doing this, all we ask is that any measures are cost neutral, and result in an increase in both number and volume of notes played for the respective section. The section with the most, and loudest notes in the next performance will receive a special prize in recognition of their contribution.
I look forward to 2014 – it’s going to be a great year.
I’ve had one of those moments. If you have been using systems thinking in the workplace for any length of time, you will know what I mean; one of those moments when another piece of the jigsaw clicks into place and you see something that was under your nose all the time.
This latest revelation came about when I happened by chance to catch a tweet that appeared on my Twitter feed. It is a quote that I originally misread as coming from Albert Einstein, but actually came from Charles Eisenstein a well known author and activist. It goes as follows;
What reductionism sees as causes, holism sees as symptoms.
The Ascent of Humanity, Charles Eisenstein.
I think this rather philosophical statement has some real practical value and uses. Here’s why;
Reductionism is synonymous with traditional analytical thinking. This approach to thinking assumes that you can understand a subject by breaking it down in to its component parts. It then follows that you can improve the subject by optimising the component parts separately and piecing them back together again. This is the prevalent form of thinking in education and modern organisations.
Holism is synonymous with systems thinking; it takes a subject as a whole, and gains insight into the subject not just from its component parts, but from their interactions.
Let’s take a few examples of some real problem situations, and a typical reductionist response;
Problem Situation #1: An aircraft runs out of fuel mid flight and crashes
Response #1: It was pilot error. The pilot did not load enough fuel for the flight. This must never happen again. To prevent this in the future we will retrain all flight crew.
Problem Situation #2: A hospital has a disproportionate mortality rate in one of its wards
Response #2: This is negligence by clinical staff on the ward. We should discipline/retrain/prosecute the clinical staff as appropriate to prevent this tragedy from happening again.
Problem Situation #3: A radioactive leak following routine maintenance at a nuclear power plant is narrowly avoided
Response #3: Standard Operating Procedures (SOPs) exist for this work but they were not correctly followed in this instance. We must add additional controls to ensure the SOPs are followed to prevent future instances.
From the above, we can see how easy it is to attribute cause to symptom, and then to act on that cause alone in the spirit of prevention. The logic is simple;
X causes Y – Reductionism has found X to be the cause for Y, and Y becomes the basis for corrective action.
But what if this analysis is incomplete? How confident are we in the veracity of the analysis?
The holist/systems view would consider some other possibilities, such as;
X causes Y but W causes X. V causes W – what causes V?
X causes Y but Y causes X – a reinforcing feedback loop.
This view always gives a potential for more insight. In the light of this line of enquiry you might ask some different questions;
- Problem Situation #1: Why did the pilot incorrectly load insufficient fuel for the flight? It is unlikely it was out of malice or incompetence (given the level of training and revalidation that pilots undertake and their personal stake in a safe flight). Was the pilot fatigued? Were the crew under time pressure to turnaround the flight? Were the fuel instruments clearly visible? Were the correct quantities ordered but not delivered? Was there a misunderstanding between the flight crew and ground crew about units of measurement?
- Problem Situation #2: Clinical staff are unlikely to undertake years of training in a caring vocation in order to deliberately neglect their patients. Were the clinical needs of patients subsumed by pressure to complete paperwork and meet targets? If the issue was attributable to more than one individual it is likely the causes were more systemic than human.
- Problem Situation #3: Despite the SOPs being followed there was still a near-miss at the power plant. Maybe the SOPs themselves are incomplete or unhelpful. Maybe the SOPs have become an end in themselves, and irrespective of the outcome, so long as the SOPs are followed, engineering staff wont be blamed, so that’s what people focus on.
Whilst it may be tempting to yield to the pressure to act decisively and quickly in response to events like the above, if that response is incomplete, incorrect or plain counter productive, at best, nothing will improve, at worst the problem will be compounded.
I have a hunch that the real root causes to these type of problems are the outdated assumptions, beliefs and superstitions that govern the design of modern organisations. It’s just a hunch.
Hold everybody accountable? Ridiculous! W Edwards Deming
One of my children’s favourite books (and secretly one of mine) is the Lorax by Dr Seuss. It is a tale of how a delicate ecosystem is destroyed by the activities of a family of opportunists, the “Oncelers”, despite the repeated warnings of the “Lorax”.
The story begins in a barren landscape, and leads the reader to a reclusive character called the Onceler. The Onceler tells of how he and his family discovered this place a long time ago when it was a paradise of flora and fauna. The Onceler family found that the magical Truffula tree produces tufts that could be processed into Thneeds, a product of a questionable value but high marketability. The main character in the story is the Lorax, who spots the dangers and questions actions of the Onceler. The story unfolds into a tale of how despite the escalating warnings of the Lorax; consumerism, corporate short-sightedness and entitlement exploits the stock of Truffula trees to the point of extinction, taking with it the rest of the eco system. This completes the tale of how the once paradise became the barren landscape it is now. The story ends with a glimmer of hope as the Onceler gives the reader a Truffula seed, the very last one of all.
Dr Seuss weaves a wonderful story of complex cause and effect and feedback loops. A simplification of the story is shown in the stocks and flows model below;
Let’s test the model;
- The level of Truffula Trees (1) is depleted by the Chopping Rate (2) which increases the level of Truffula Tufts (3) produced
- The speed at which Truffula Tufts (3) are turned into Thneeds (4) is governed by the Knitting Rate (5)
- Together, the Chopping Rate (2) and Knitting Rate (5) form the Production Rate (6)
- As the Production Rate (6) increases, the level of Thneeds Created (4) increases, leading to an increase in Profits (7) which increases the Greed of the Onceler (8)
- As the greed of the Onceler (8) increases, so do his Growth Plans (9) which in turn increase the Production Rate (6) rising
The Production, Profit, Greed and Growth loop is an example of a re-enforcing feedback loop. As can often be the case, systems are not always that simple, and there are some other side effects;
- One of the central effects of the growth loop is that the level of Truffula Trees (1) depletes in response to the Production Rate (6) rising
- The number of Truffula Trees (1) combined with the rate of Truffula Fruit Picking Rate (10) determine the level of Truffula Fruit (11) available for the Population of Brown Barbaloots (12)
- Over time as the level of Truffula Trees (1) depletes in response to the growth loop, the Truffula Fruit Picking Rate (10) decreases, yielding fewer Truffula Fruits (11) thus increasing the Hunger (13) levels within the Brown Barbaloot Population (12)
- In addition, as the Production Rate (6) increases so do the levels of Gluppity Glup (14) and Schloppity Schlop (15) produced which together form the level of Left Over Goo (16).
- The Increase in Left Over Goo (16) together with the Chopping Rate (2) and Knitting Rate (5) increase the level of Anger (17) felt by the Lorax
- The increase in Left Over Goo (16) depletes the Population of Humming Fish (18) and Swammy Swams (19) who cannot swim in the lake
As you can see, just through the modelling of 19 elements, a huge degree of complexity has begun to emerge. This complexity resides both in the 19 elements but also in the interactions between them.
[warning]How many organisations posses this level of insight into their activities? Modern organisations are complex systems that are highly aware of their component parts but not very good at understanding their interactions.[/warning]
The systems approach to problems focuses on systems taken as a whole, not on their parts taken separately. Such an approach is concerned whit total- system performance even when a change in only one or a few of its parts is contemplated because there are some properties of systems that can only be treated adequately from a holistic point of view. These properties derive from the relationship between parts of systems: how the parts interact and fit together. Dr Russell Ackoff.
The Creative Learning Exchange http://www.clexchange.org/ftp/newsletter/CLEx21.1.pdf