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The art and science of the possible

Monthly Archives: December 2012

How bureaucracies continue to grow or the second law of “organizational” thermodynamics

20 Thursday Dec 2012

Posted by lnedelescu in capitalism, democracy, future, human capital, management, Organizational Development, problem solving, society

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Behavior, bureaucracy, management, Organizational Development, thermodynamics

Is there a reason bureaucracies seem to always expand? Is there a reason why a committee that was set up to resolve a problem often time gets of life of its own and outlives the problem? Is there an organizational equivalent to the second law of thermodynamics in physics that says that the entropy or disorder of a system always tends to grow? What are the equivalent mechanics that fuel bureaucratic expansion?

I present in this blog entry a generic bureaucratic growth scenario that is inspired by real experiences. The scenario is organized in a number of steps and most steps are conceptually reinforced by the words of a few individuals who are held in high regard by society.

(Step 1) The bureaucracy’s leadership defines a grand and worthy-sounding vision that needs to be pursued.

Because the leaders don’t have a complete and clear understanding of all the implications of the vision they propose, there is usually some degree of ambiguity associated with an otherwise worthy-sounding pursuit. A sound vision requires a deep understanding of the context. And a prerequisite to understanding in complicated domains requires clear organization of the complete knowledge in that domain, or an ontology. But there are many bureaucracies which operate without an awareness of the total knowledge they are supposed to possess and manage. And there are many leaders within those bureaucracies who do not possess the understanding required. An applicable quote from Profession John Gero is: “ontologies provide a domain with a structure for the knowledge in that domain. Domains without ontologies are constantly inventing new terms for existing knowledge and find it difficult to develop foundations on which others can build.”

Nevertheless, even with an ambiguous or incomplete vision…

(Step 2) Planning the work to achieve the vision begins.

Because the true implications of the ambiguity and incompleteness of the vision are not thought-through, there is usually a disconnect between the vision and the time and budget allotted. This increases the pressure on executing the vision, decreasing the opportunity to question the context, the validity of the vision. Because the subordinates are judged by checking off the vision or goal, they concentrate on just that. In a strive for efficiency (get the product out, meet the deadline so we can check off the box) effectiveness (i.e. context) becomes skewed. An applicable quote from Peter Drucker is “efficiency is a matter of doing things right; effectiveness is a matter of doing the right things.” But doing the “right things” takes enough up-front thinking, and it also takes pushing back on a vision or goal that doesn’t make sense.

But it’s already too late for that…

(Step 3) The initiative/project/product gets a life of its own.

This happens because it starts being tracked in the operational systems of the bureaucracy. These are however by definition not designed to be sensitive to context. That is because context takes thinking, and it cannot be easily measured with simple metrics: there is no such thing as a kilogram of context. The chance for someone noticing a fault with the initial vision diminishes at this point exponentially. That is because these context-blind operational systems have a direct impact on the employee’s performance, and they don’t measure context and validity. So arguing that the work doesn’t make sense, can only get one in trouble, since “doesn’t make sense” is not something that operational systems track.

And so, Drucker’s “doing the right things” turns decisively into “doing things right”, or else!

(Step 4): The vision cannot be wrong!

The initiative/project/product is clearly out of tune with the initial vision. The results are just not conclusive and the output isn’t useful. But it has since acquired a life of its own, and even if its ineffectiveness is obvious, no one dares to take the blame for fear of punishment. The disconnect eventually becomes apparent to the leadership, but even the executives who initiated the vision don’t have the political courage or power to declare the vision erroneous.  Doing so would mean taking the blame for X millions/billions spent in vain. And so, attempts are made to fix the initiative/project/product from within rather than scrapping it altogether, acknowledging the financial loss, and re-examining the initial premises. The same thinking and methods that created the problem are used to attempt to correct it, which is a futile exercise. Albert Einstein has a powerful insight for this type of situation: “we can’t solve problems with the same type of thinking that was used to create them”.

(Step 5): Fear and stubbornness are good companions.

Stubbornly refusing to acknowledge blame and scrap the project, the organization continues to try to do the wrong thing righter. But Russell Ackoff rightly cautions against this approach:  “most large social systems are pursuing objectives other than the ones they proclaim, and the ones they pursue are wrong. They try to do the wrong thing righter, and this makes what they do wronger. It is much better to do the right thing wrong than the wrong thing right, because when errors are corrected, it makes doing the wrong thing wronger but the right thing righter”.

(Step 6): Outside intervention!

An outside intervention is eventually necessary, and this usually takes the incarnation of a new committee. New procedures and processes are set up to prevent this “type” of problem from occurring in the future. The new procedures and processes themselves get a life of their own and have to be maintained which means new job roles or at the very least new job responsibilities are added, and the bureaucracy expands.

(Step 7 and 1) A new bold vision is defined…

And the rest is…déjà-vu!

The power of holistic thinking or how Albert Einstein’s Theory of Relativity could not have been a crowd-sourced innovation

13 Thursday Dec 2012

Posted by lnedelescu in innovation, knowledge, science, society, technology

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Crowd Sourcing, Einstein, Innovation, science, Society, Technology

I have claimed that all the hype about how the information technology revolution,  culminating with Apple and Facebook, has changed the quality of our civilization may be over-rated.

A lot of the benefits hype associated with social networks and other interconnected means of communication facilitated by information technology may be just that: hype. Networks come with volume (people, information, “likes” and so on) and they do have their benefits: speed with which the information propagates for one and the beginnings of the creation of a global village. But we should not confuse information with wisdom, intelligence and creativity; more quantity of information delivered ever faster does not necessarily mean an increase in the quality of our understanding or wisdom. I’ve used the following example to make my point to several audiences lately: “Einstein’s Theory of Relativity could not have been a crowd-sourced innovation”. And I honestly believe that is true, having provided at least one supporting argument from the management consulting industry (see my blog entry “Russell Ackoff, the Albert Einstein of Management“).

And so I have claimed, supplied limited examples, and will continue to argue over the course of coming posts that some of the world’s top thinkers are in fact aligned with a view that argues for qualitative, holistic path to the world’s progress that can be traced all the way back to roots of Western civilization in ancient Greece.

Below are three examples of insights that go against commonly accepted wisdom. These insights share a common denominator and namely that quality is more important than quantity which is equivalent to effectiveness being more important than efficiency. See also my post on this blog of the fallacy of the business performance consulting model.

In his Harvard Business Review Blog, Jeff Stibel makes the case for intelligence and creativity being a qualitative rather than quantitative, a primarily individualistic rather than group phenomenon:

http://blogs.hbr.org/cs/2011/06/why_a_great_individual_is_bett.html

In a Q&A with Alan Hall at Forbes, Clayton Christiansen, the innovation guru, argues that our obsession with efficiency, based largely in quantitative methods and thinking, is killing innovation:

http://www.businessinsider.com/clay-christensen-our-obsession-with-efficiency-is-killing-innovation-2012-12

The same finger prints of holistic, qualitative thinking can be noticed in Roger Martin’s and Jack Welch’s motivations when arguing against the “shareholder value” concept in economics and business:

http://www.forbes.com/sites/stevedenning/2012/08/29/is-the-hegemony-of-shareholder-value-finally-ending/

Democracy full circle: its invention may hold the key to its future

12 Wednesday Dec 2012

Posted by lnedelescu in business, capitalism, democracy, design thinking, future, philosophy, society

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compassion, competitiveness, convergence, creativity, democracy, future, futurism, ideology, philosophy, politics

Image

Over two and a half millennia ago, the Greek philosophers gave us the “dialectical” method of constructive argument. In the 21st century democracy is faced with significant challenges, and moving forward may require searching for solutions from the wisdom of democracy’s inventors.

The dialectic method is a form of reasoning based on dialogue of arguments and counter-arguments, advocating propositions (theses) and counter-propositions (anti-theses). The dialectical method of dialogue is unique and different from rhetoric and debate in that it aims to converge the opposite points of view and form a new and superior point of view from the synthesis of the initial arguments. This transcendence is possible by searching for commonalities between the two opposing points of view when considered in the larger context or whole of which they are both part. The transcendence of thesis and antithesis into synthesis represents a qualitative improvement of the argument, bringing both participants closer to understanding the whole of reality as an evolving process. Ancient history not applicable to the problems of today’s highly technologized and interconnected world, right? Not necessarily.

Fast forward to the 21st century: Roger Martin, #6 on the top fifty management thinkers of 2011 (http://www.thinkers50.com/biographies/95) is the creative force behind two of the most valued management models: integrative thinking and design thinking. Roger Martin defines integrative thinking as: “the ability to constructively face the tensions of opposing models, and instead of choosing one at the expense of the other, generating a creative solution of the tensions in the form of a new model that contains elements of the individual models, but is superiors to each” (http://rogerlmartin.com/devotions/integrative-thinking/). Sound familiar? Roger Martin’s concept was actually developed by interviewing some of the world’s top business leaders and entrepreneurs. Apparently these “integrative thinkers” go about solving problems differently than “conditional thinkers”; and step 4 of the figure below has an uncanny resemblance to the dialectical method.

picture_integrative_thinking2

And so, without the benefit of modern technology or access to a study group, Socrates said pretty much the same thing more than 2500 years ago. And as we look to the challenges faced by democracy in the 21st century, we may have to take Socrates and his fellow Greek philosophers seriously.

But what is the main challenge of our century’s advanced democracies? A lot of the challenges can actually be related to one dominant culprit: complexity. Small start-ups are good sources for inspiration when it comes to agility, but past a critical mass agility gives way to complexity as a bureaucracy grows in size. And advanced democracies are experiencing the “complexity” by-product of progress to a growing degree (see the 2008 financial crisis and other systemic events). And so, in the current construct of democratic progress, agility and complexity seem to be mutually exclusive. So much so that the left and right political ideologies of the leading modern democracy, the USA, are aligned to the agility thesis and complexity antithesis. On one hand, the left ideology is advocating for a top-down, bureaucratic approach to tackling complexity. The right by contrast is advocating for a agile bottom-up, government free approach to tackling complexity. In true agreement with the dialectical method, the future of democracy may well need a transcendence of those two viewpoints into a synthesis that would bring together agility and bureaucracy: the innovative, agile government.

But there are more subtle ideological differences between the left and right political parties. There are so to speak, emotional and behavioral differences in how the individual is perceived. The left ideology emphasizes a compassionate view of the individual, and sharing opportunity with the less fortunate, those that are somehow left outside the system with all its benefits. At the same time, the right ideology emphasizes the competitive human side that is by definition not in alignment with compassion. Are these ideologies, apparently opposed, actually facets of the same human construct when regarded from a more holistic perspective? Are human beings both compassionate and competitive? For a successful society that both makes progress and takes care of its less fortunate, are these attributes not required simultaneously? And if so, is there a model that could reconcile these so that democracy itself has a future? Is the distant future of democracy predicated upon the disappearance of the left and right ideologies?

Roger Martin’s second area of interest, Design Thinking, may provide the solution to an ideology-free democratic construct. Design Thinking, closely related to Integrative Thinking, can be described as a style of thinking that is generally associated with the ability to combine empathy for the context of a problem, creativity in the generation of insights and solutions, and rationality to analyze and fit solutions to the context. A Design Thinking approach to political ideology could bring the two dominant ideologies closer together, by demonstrating a shared concern for the individual’s well being, both in terms of the basic need for individualism (competitiveness) and inclusiveness (compassion).  Creativity, which is a key component of Design Thinking, represents that uniquely human trait that could lead the way to a future world where competitiveness and compassion are symbiotic and simultaneously harmonious: that is, there is no need to alternate between the two every four years.

Performance reviews: an alternative perspective to the latest thinking

10 Monday Dec 2012

Posted by lnedelescu in business, human capital, management

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HR, human capital, human resources, performance reviews, promotion

One of the latest articles on LinkedIn features a thought leader proposing that, and I quote, “when you start telling someone, ‘you are really great at x, but when you do y…’ the BUT negates all the goodwill that you are building up with the first part of your sentence.  The BUT gets someone’s defenses up, and makes them way less able to hear the important thing you want them to listen to.” (see https://www.linkedin.com/today/post/article/20121130041419-9947747-how-to-give-great-employee-feedback).

This is another good example of superficial understanding of how human beings function. In short, my argument is as follows: human beings are adaptive beings. So during a performance review they can easily adjust their mental sensors to read through the lines quite effectively and decode whether “AND” really means they are deficient in some respect. So replacing “BUT” with “AND” is in my humble opinion not an effective way to get positive results in the short term or help the employee to grow in the long run.

A much more effective (in the transformative sense) approach is to give the employee the larger context, to show them how their behavior affects the bigger picture, and to encourage them to find ways to upgrade their individual behavior accordingly. That is a powerful motivator and it’s a way of treating the employee with due maturity and respect. It can be the beginning of a fruitful partnership in achieving a larger vision and mission.

The business performance consulting model: a mediocre way to seek progress, or a good way to seek mediocre progress (Part I)

02 Sunday Dec 2012

Posted by lnedelescu in business, consulting, taxonomy

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Image

Many of today’s management consulting firms promise business performance. “High Performance. Delivered” assures the motto of one of the top business management consulting firms in the world.

And just how do these consultants prove the success of their methods? They benchmark existing performance and then demonstrate a performance increment after their intervention. Straight forward and hard to argue against. Or is it?

How about asking a next level question: how is the benchmark itself derived? Well, let’s take a quote from the same company with the motto: “XYZ draws upon research and our experience across industries and business functions to help our clients improve their business performance”. And so, to paraphrase this consulting company’s approach, an average of indicators associated with high performing enterprises in a certain market sector is used to create “best practices” benchmarks.

So, in this consulting model, what does the client really pay for? Well the client pays the consultant to help them emulate the best in the client’s respective market sector. But a successful outcome is dependent on a few assumptions: first is the assumption that the best do not move forward, and second there is the assumption that the emulation effort is designed and executed flawlessly. Even if ignoring the validity of these assumptions, the “performance” consulting model is at best a mediocre way to seek progress, or a good way to seek mediocre progress. That is because the “emulation” model is not just flawed in terms of its underlying assumptions, but also presents a logical paradox: how can progress be even possible in a model where all everyone does is benchmark? Eventually entire market segments would converge to a set of religiously accepted best practices and progress would stagnate to a halt. And we know that’s not true: we know that markets are not that predictable and well behaved and that disruptive new entrants can unseat established incumbents. So this “linear” model of increasing one’s performance by emulation is at best incomplete and at worst flawed.

And yet, why is it so successful? Well maybe because as a global society we have a deeply embedded quantitative mindset bias. What is abstract and not easily measurable is deemed as not rigorous and not actionable, and so, not necessarily as valuable as the concrete and measurable. In other words performance trumps creativity, even though markets have repeatedly proven that significant leaps in business value are usually based in a disruptive innovation itself inspired by creative insights.

In Part II of this post I will present a model based in personal experience that sheds light into how increments in qualitative, hard to measure attributes can lead to significant leaps in performance, not otherwise achievable through the benchmarking model. I will look to elucidate the connection between some of the most abstract attributes of an enterprise such as its identity and vision and its overall capacity to produce and leverage value. Please stay tuned…

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