Demanding Change

We Ought to Know the Difference

2013-04-18T11:30:00.000+01:00

Is systems thinking really possible? Here's one reason why it might not be.

One of the concerns of systems thinking is the need to avoid the so-called environmental fallacy - the blunder of ignoring or not understanding the effects of the environment of a system. This is why, when systems thinkers are asked to tackle a concrete situation in detail, they often hesitate, insisting that it is wrong to look at the detail before understanding the context.

The trouble with this is that there is always a larger context, so this hesitation leads to an infinite regress and inability to formulate practical inroads into a complex situation. Many years ago, I read a brilliant essay by J.P. Eberhard called "We Ought to Know the Difference", which contains a widely quoted example of a doorknob. As I recall, Eberhard's central question is a practical one - how do we know when to expand the scope of the problem, and how do we know when to stop.

C West Churchman went more deeply into this question. In his book The Systems Approach and its Enemies (1979), he presents an ironic picture of the systems thinker as hero.

If the intellect is to engage in the heroic adventure of securing improvement in the human condition, it cannot rely on “approaches,” like politics and morality, which attempt to tackle problems head-on, within the narrow scope. Attempts to address problems in such a manner simply lead to other problems, to an amplification of difficulty away from real improvement. Thus the key to success in the hero’s attempt seems to be comprehensiveness. Never allow the temptation to be clear, or to use reliable data, or to “come up to the standards of excellence,” divert you from the relevant, even though the relevant may be elusive, weakly supported by data, and requiring loose methods.

Like Eberhard, Churchman seeks to reconcile the heroic stance of the systems thinker with the practical stance of other approaches. But we ought to know the difference.

This is an extract from my eBook on Next Practice Enterprise Architecture. Draft available from LeanPub.

John P. Eberhard, "We Ought to Know the Difference," Emerging Methods in Environmental Design and Planning, Gary T. Moore, ed. (MIT Press, 1970) pp 364-365

See extract here - The Warning of the Doorknob. The same extract can be found in many places, including Ed Yourdon's Modern Structured Analysis (first published 1989).

See also

Nicholas Berente, C West Churchman: Champion of the Systems Approach

Jeff Lindsay, Avoiding environmental fallacy with systems thinking (December 2012)

Updated May 14 2013

From Enabling Prejudices to Sedimented Principles

2013-03-30T13:01:00.000Z

In my post From Sedimented Principles to Enabling Prejudices (March 2013) I distinguished the category of design heuristics from other kinds of principle. Following Peter Rowe, I call these Enabling Prejudices.

Rowe also uses the concept of Sedimented Principles, which he attributes to the French philosopher Maurice Merleau-Ponty, one of the key figures of phenomenology. As far as I can make out, Merleau-Ponty never used the exact term "sedimented principles", but he does talk a great deal about "sedimentation".

In phenomenology, the word "sedimentation" generally refers to cultural habitations that settle out of awareness into prereflective practices. Something like the "unconscious". (Professor James Morley, personal communication)

"On the basis of past experience, I have learned that doorknobs are to be turned. This ‘knowledge’ has sedimentated into my habitual body. While learning to play the piano, or to dance, I am intensely focused on what I am doing, and subsequently, this ability to play or to dance sedimentates into an habitual disposition." (Stanford Encyclopedia of Philosophy: Merleau-Ponty)

This relates to some notions of tacit knowledge, which is attributed to Michael Polyani. There are two models that are used in the knowledge management world that talk about tacit/explicit knowledge, and present two slightly different notions of internalization.

Some critics (notably Wilson) regard the SECI model as flawed, because Nonaka has confused Polyani's notion of tacit knowledge with the much weaker concept of implicit knowledge. There are some deep notions of "unconscious" here, which may produce conceptual traps for the unwary.

Conceptual quibbles aside, there are several important points here. Firstly, enabling prejudices may start as consciously learned patterns, but can gradually become internalized, and perhaps not just implicit and habitual but tacit and unconscious. (The key difference here is how easily the practitioner can explain and articulate the reasoning behind some design decision.)

Secondly, to extent that these learned patterns are regarded as "best practices", it may be necessary to bring them back into full consciousness (whatever that means) so they can be replaced by "next practices".

Bryan Lawson, How Designers Think (1980, 4th edition 2005)

Peter Rowe, Design Thinking (MIT Press 1987)

Wilson, T.D. (2002) "The nonsense of 'knowledge management'" Information Research, 8(1), paper no. 144

Thanks to my friend Professor James Morley for help with Merleau-Ponty and sedimentation.

Intelligence and Governance

2013-02-28T12:31:00.000Z

Katy Steward of @TheKingsFund asks What Makes a Board Effective? (Feb 2013). She's looking specifically at the role of the Board in the National Health Service, but there is much that can be generalized to other contexts. She asks some key questions for any given board.

Are its members individually effective and do they communicate effectively – for example, do they challenge themselves and others?
Do they use energetic presentations and have insightful conversations?
Do they support their colleagues and have good decision-making skills?

In this post, I want to develop this line of thinking further by exploring what the concept of organizational intelligence implies for boards.

1. Boards need to know what is going on.

Multiple and diverse sources of information - both quantitative and qualitative
Understanding how information is filtered, and a willingness to view unfiltered information as necessary.
Ability to identify areas of concern, and initiate detailed investigation

2. Boards need to make sense of what is going on.

Ability to see things from different perspectives - patient quality, professional excellence, financial accountability, social accountability.
Ability to see the detail as well as the big picture.
Courage to investigate and explore any discrepancies, and not to be satisfied with easy denial.

3. Boards need to ensure that all decisions, policies and procedures are guided by both vision and reality. This includes decisions taken by the board itself, as well as decisions taken at all levels of management.

Decisions and actions are informed by values and priorities, and reinforce these values. (People both inside and outside the organization will infer your true values not from your words but from your actions.)
Decisions and actions are guided by evidence wherever possible. Ongoing decisions and policies are open to revision according to the outcomes they yield.
Decision-making by consent (Robertson)

4. Boards need to encourage learning.

Effective feedback loops are established, monitoring outcomes and revising decisions and policies where necessary.
Courage to experiment. Ability to tolerate temporary reduction in productivity during problem-solving and learning curve. Supporting people and teams when they are out of their comfort zone.
Willingness to learn lessons from anywhere, not just a narrow set of approved exemplars.

5. Boards need to encourage knowledge-sharing

All kinds of experience and expertise may be relevant
Overcoming the "silos" and cultural differences
The collective memory should be strong and coherent enough to support the organization's values, but not so strong as to inhibit change.

6. Boards work as a team, and collaborate with other teams

Effective communication and collaboration within the board - don't expect each board member to do everything.
Effective communication and collaboration with other groups and organizations.
Circle Organization (Robertson)

Note: The six points I've discussed here correspond to the six core capabilities of organizational intelligence, as described in my Organizational Intelligence eBook and my Organizational Intelligence workshop.

See also

Brian Robertson, The Sociocratic Method. A Dutch model of corporate governance harnesses self-organization to provide agility and a voice to all participants (Strategy+Business Aug 2006)

Steve Waddell, Wicked Problems, Governance as Learning Systems (Feb 2013)

Updated 1 March 2013

Developing cultures of high-quality care

2013-02-26T23:57:00.000Z

#kfleadership Excellent lecture at @TheKingsFund this evening by Professor Michael West. Here are some of my notes.

When he left college West was short of money, so he took a job in the coal mines. Productivity was important to everyone, and the pay at the end of the week depended on the quantity of coal extracted. But there was one thing more important than productivity, namely safety.

In many organizations this would just be lip service. But in the coal mines, safety was taken very seriously, and management actions were completely congruent with this.

West argued that the same should apply in the Health Service. Of course productivity is fundamentally important, but the number one priority should not be productivity but high-quality and safe patient care.

Valuing patients and staff turns out to be good management. West's argument is not merely based on rhetoric, but is supported by data. Patient outcomes and patient satisfaction are highly correlated with staff satisfaction and morale, and these in turn are correlated with staff engagement, which West defined in terms of three things: pride, intrinsic engagement and involvement in decisions. Ultimately this links back to improved productivity.

Someone in the audience objected that productivity must always be the top priority, otherwise you risk running out of money to pay for patient care. West replied that productivity follows from good people management. He agreed that the NHS has a great deal to learn from the private sector, and expressed a hope that private sector expertise (including non-executive board members) would not be limited to the Marketing and Finance perspectives.

West affirmed that the NHS is full of intelligent and highly motivated people, and said that the traditional command and control mode of leadership was such a waste of resource. The key role of leaders is to learn from staff, and to realize the potential of the people.

People at all levels require courage to accept challenging targets - in other words, to strive for things that they won't always achieve. The organization must accept and learn from failure to reach these targets. Blaming people for failure to excel is not only stupid and unfair, it is also counter-productive, because it makes people risk-averse and inhibits them from striving for anything that isn't guaranteed in advance.

Leadership includes the courage to seek unwelcome information - for example feedback that indicates things not going well.

After the lecture, I was chatting to a group from a London teaching hospital about accountability. As I see it, accountability doesn't only mean taking responsibility for the consequences of one's decisions (such as short-sighted cost-cutting) but also taking responsibility for what one chooses to pay attention to. One of the classic examples in Moral Philosophy concerns a ship owner who sends a ship to sea without bothering to check whether the ship was sea-worthy. Some argue that the ship owner cannot be held responsible for the deaths of the sailors, because he didn't actually know that the ship would sink. I think most people would see the ship owner having a moral duty of diligence, and would regard him as accountable for neglecting this duty.

In the current climate, the NHS leadership has a duty to achieve high quality patient care and productivity, and the evidence from Professor West is that this can best be achieved by engaging staff at all levels. Executive boards must surely be held accountable if they neglect to do this.

See also Culture of Fear (Storify, 27 Feb 2013)

The ship-owner example can be found in an essay called "The Ethics of Belief" (1877) by W.K. Clifford, in which he states that "it is wrong always, everywhere, and for anyone, to believe anything upon insufficient evidence".

Updated 28 Feb 2013

Cybernetic Entropy

2013-02-19T18:10:00.000Z

The pioneers of cybernetics borrowed the concept of entropy from thermodynamics, the tendency of systems to become less organized over time.They regarded structure and information as ways of halting or reversing entropy, and information is sometimes defined as negative entropy (negentropy).

In the past few days, I have seen a few examples of what appears to be entropy at a higher level - over time, rules becoming less effective or even counterproductive.

We keep hearing stories about large corporations paying practically no tax. As we heard on BBC Radio 4 recently, (File on Four: Taxing Questions), new tax rules are created with the participation of interested parties, including large corporations (HSBC, Vodafone) and accountancy firms (KPMG). Having advised on the creation of loopholes, the accountants then make huge amounts of money selling knowledge of these loopholes to their clients. Sadly, even this valuable knowledge degrades over time, and new tax laws must be created with new and more obscure loopholes.

Within a sceptical article about the so-called Robin Hood tax (Algorithm and Blues) @TimHarford mentined Myron's Law - the theory that taxes collect diminishing amounts of revenue over time, as people work out legal ways to avoid paying.

Meanwhile, @CyberSal has tweeted a couple of links to articles about Payment by Results. Since Deming, systems thinkers have understood that targets and incentives often don't (and perhaps cannot) achieve the intended results. Instead, they stimulate various forms of devious behaviour, known as gaming the system.

I think the interesting point here is not just that these mechanisms don't work, but they get worse over time. To start with, people may make a genuine attempt to do things properly, and some professionals may be reluctant to game the system, but they gradually get worn down. Those that don't quit altogether become stressed, depressed and cynical. For example, if teachers don't teach to the test, and if the head teachers don't bully them into playing the game, then the school will slip down the league tables and become non-viable. But this degradation takes time, which is why I think it makes sense to think of this as another form of entropy.

How then might this entropy be halted or reversed?

More links: http://storify.com/richardveryard/cybernetic-entropy

Agility and Fear

2013-02-09T14:08:00.000Z

Frank Furedi argues that human thought and action are being stifled by a regime of uncertainty. The only thing we have to fear is the ‘culture of fear’ itself (April 2007),

McGregor introduced the distinction between Theory X and Theory Y, referring to different beliefs about the behaviour and motivation of workers, which may be embedded in management practices and organization culture. Ouchi argued that McGregor's distinction doesn't work for all cultures, and identified a third theory, Theory Z, which he used to explain the behaviour of most Japanese companies and some Western companies.

Theory X refers to a set of beliefs in which workers are lazy, require constant supervision, and are motivated only by financial rewards and penalties.

Theory Y refers to a set of beliefs in which workers can be trusted to pursue the interests of the firm without constant supervision, and respond to a range of motivators.

Theory Z refers to a set of beliefs about lifetime commitment between employers and employees.

eBook Foundations of Business
Business Awareness Workshop

If we frame fear in terms of Theory-X, then it becomes fear-and-blame and we can all go tut-tut. But isn't there also a way of framing fear in terms of Theory-Y, without yoking it to blame? Performing artists may experience some stage-fright prior to producing an outstanding performance, and while excessive stage-fright may be debilitating, some degree of anxiety may be a positive stimulus. Are we to ban all forms of anxiety and uncertainty from the organization, so that everyone can feel cosy and safe?

And what about Theory-Z? If an organization is under existential threat, then the members collectively need to focus all their energy and creativity on restoring the viability of the organization, and it would be perfectly normal for them to be emotionally as well as intellectually engaged in this task. Necessity, as they say, is the mother of invention.

All I'm saying is that there are different types of fear, which may have different effects on organizational behaviour. Fear-and-blame is one particular type of fear, but there are other types.

Many workers rightly feel responsible for their work. In most organizations, employees or contractors are ultimately vulnerable to loss of status or loss of earnings if they fail to perform satisfactorily. A completely fear-free organization would be disengaged from its customers and environment, and therefore ethically problematic.

However, a caring organization may be able to attenuate some of this feeling of vulnerability, and provide some kind of safety net that allows people to take reasonable risks without too much fear of failure. Whereas an uncaring organization either fails to provide proper boundaries, or amplifies the sense of vulnerability by capricious and unjust management practices.

How Offices Make People Stupid

2013-02-09T13:10:00.003Z

@benhammersley at #RSAwork talks about the future of office work, and identifies some of the ways that organizations make themselves stupid. The irony is that a lot of these mechanisms were supposed to make offices more productive and efficient, and to promote collaboration and creativity. As Ben puts it

"We have optimized being on top of things rather than getting to the bottom of things."

Let's start with open plan offices. As Ben tells the story, these were introduced in an ideological attempt (supposedly originating in North California) to flatten the office hierarchy, to remove barriers between people, and to encourage people and technology to work together in perfect harmony. There are various dysfunctional versions of this Californian Ideology - see my post All Chewed Over By Machines (May 2011).

In practice, various interesting forms of behaviour emerge in open plan offices. Ben notes the widespread practice of more powerful workers grabbing the desks near to the wall, leaving juniors huddled in the middle in a state of permanent anxiety, as if they were antelope anticipating the lion's pounce.

Many offices are designed as semi-open plan, with people huddled in cubicles, but with the constant chance of someone popping a head over the partition.

In some offices, there is a deliberate policy to move people around - sometimes called hot-desking. One of the supposed benefits of this policy is that it encourages workers to constantly develop new relationships with their transient neighbours. For companies whose workers don't spend all their time in the office, this policy also reduces the amount of office space required. However, the uncertainty and anxiety of getting any desk, let alone a decent desk near the wall and away from the more irritating co-workers, might be regarded as a negative factor.

Putting aside the economics and culture and psychological impact of open plan offices, the essential justification is that they promote communication and collaboration. These elements are necessary but not sufficient for productivity and innovation in a knowledge-based organization. Not sufficient because productivity and innovation also depend on concentrated hard work.

Read more »

Are we making progress?

2013-02-03T16:20:00.002Z

In a great post, @JohnQShift explains how to build a culture of learning in your business. He calls this A Matter of Life or Death (Feb 2013)

In the post, John reports one of his clients observing that they had made some progress in their business over the year. By progress, the client meant that

people were beginning to take up more responsibility and initiative without having to wait for the boss to tell them what to do

there was more discussion amongst the staff as to how to manage some of the day-to-day challenges they meet and less referring to the boss for the “answer”

mistakes were being used as entry points to examining business processes and working out how they could be improved

they had a clearer idea of their collective purpose and how important relationship is to achieving that purpose

the leaders were devoting more of their time to ensuring the conditions and structures of the business were optimised so that people could get on with their jobs (and less time micro-managing operational tasks).

From research to practice

2013-02-02T17:49:00.000Z

@danlockton is doing a survey How do actual designers use academic literature?

What are the barriers you've experienced?
What service would you like to see?
What would be useful to you?
Could academics make their work more easily applicable?

Here's my answer.

1. I do make an effort to be aware of academic research. There are some brilliant ideas if you know where to look, but looking is timeconsuming, and hampered by paywalls. Obviously academic research would be more practical use if it were more easily accessed by practising designers,

2. Academics typically divide one piece of research into several articles, to earn more academic points. So there may be little added value from each one. Peer review does not guarantee quality or uniqueness.

3. I do not have the funding to buy access for large numbers of articles on the off-chance they might be relevant or even comprehensible.

4. If practicising designers had better access to academic work, there would be a feedback loop that would help improve the practical relevance of future academic work,

5. There is a similar problem with international and industry standards such as ISO. These are widely ignored in my field because you have to pay upfront in order to find out if they apply to you, and most people don't bother.

See also @andybudd, It's all academic (February 2013)

Real Criticism, The Subject Supposed to Know

2013-01-30T03:05:00.001Z

"Goodbye, Anecdotes", says @Butterworthy, "The Age Of Big Data Demands Real Criticism" (AWL, January 2013). Thanks to @milouness, who comments "Important concepts here about what is knowable!". The article tries to link Big Data with Big Questions about the Big Picture, and what @Butterworthy calls The Big Criticism. From this perspective, Bill Franks' advice, To Succeed with Big Data, Start Small (HBR Oct 2012), is downright paradoxical.

But why would we expect Big Data to help us answer the Big Questions? Big Data is rather a misnomer: it mostly comprises very large quantities of very small data and very weak signals. Retailers wade through Big Data in order to fine-tune their pricing strategies; pharma researchers wade through Big Data in order to find chemicals with a marginal advantage over some other chemicals; intelligence analysts wade through Big Data to detect terrorist plots. Doubtless these are useful and sometimes profitable exercises, but they are hardly giving us much of a Big Picture. Big Data may give us important clues about what the terrorists are up to, but it doesn't tell us why.

Read more »

Expert Generalists and Innovative Organizations

2013-01-27T16:45:00.001Z

What do the great innovators have in common? Looking at examples from Picasso to Kepler, Art Markman calls these men expert generalists. They seem to know a lot about a wide variety of topics, and their wide knowledge base supports their creativity.

Markman identifies two personality traits that are key for expert generalists: Openness to Experience and Need for Cognition. Can we also expect to find these traits in innovative organizations?

Openness to Experience entails a willingness to explore new ideas and opportunities. Obviously many organizations prefer to stick with familiar ideas and activities, and have built-in ways of maintaining the status quo.

Need for Cognition entails a joy of learning, and a willingness to devote the time and effort necessary to master new things.

In his post on the origins of modern science, Tim Johnson compares the rival claims of magic and commerce. He points out that good science is open whereas magic is hidden and secretive; he traces the foundations of modern science to European financial practice, on the grounds that markets are social, collaborative, open, forums. But perhaps it makes more sense to see modern science as having two parents: from magic it inherits its Need for Cognition, a deep and passionate interest in explaining how things work; while from commerce it inherits its Openness to Experience, a broad fascination with the unknown. Obviously there have been individual scientists who have had more of one than the other, and some outstanding individual scientists who have excelled at both, but the collective project of science has relied on an effective combination of these two qualities.

Read more »

Information and Affirmation

2013-01-27T00:43:00.001Z

@timrayner01 points out that so-called information-sharing is never neutral, disengaged - it is a positive act of communication.

"Don’t think of what you share as information. Even if what you share is information, by sharing it, you are telling the world that it is information that you affirm in some way. It is the affirmation that counts. We share what we love. Even when we share details about things we despise, they are things we love to hate. Love is the key to understanding how we contribute to social media commons. We populate the commons with expressions of love."

Tim Rayner, The gift shift: what’s social about social media? (August 2012)

So even scorn is a form of affirmation. The comedian who devotes his spleen to the latest reality show is thereby contributing (in a complex post-modern fashion) to the show's success. Daniel Smith describes this as alternative consumption, and sees Charlie Brooker as a modern version of Baudelaire.

Daniel Smith, Spleen and Modernity: Baudelaire and ‘alternative’ consumption (July 2010)

The Royal Television Society may pretend that Charlie Brooker represents the high-brow alternative to Simon Cowell. But Brooker's material is basically the same as Cowell's, it just has a different sentiment. They obviously need each other.

Jonathan Harwood, Cowell and Morgan beaten by Brooker and Theroux (The Week March 2010)

The Price of Fish

2013-01-21T11:19:00.000Z

Michael Mainelli and Ian Harris have written a wide-ranging survey of economics, choice theory (game theory, psychology and ethics), systems theory, chaos theory, global warming and evolution. So what's all that got to do with the price of fish?

One of the themes running through the book is that the price of fish bears no relation to the value of fish, especially if we are concerned about long-term value and the sustainability of fish stocks.

Oscar Wilde famously defined a cynic as one who knows the price of everything and the value of nothing. This definition has also been applied to accountants and economists. Michael and Ian are leaders of the Long Finance initiative, a movement within the City of London that aims to overcome this kind of short-term financial cynicism.

Michael and Ian describe the price of fish as a wicked problem - a problem that lacks easy definition as well as easy answers. "Sustaining the supply of edible fish is a wicked problem that presents global risks." (p 301) And yet they suggest that the system might possibly sort itself out. "As fish run out and have to be sustainably fished, the historic underpricing of fish ceases." (293)

But this is no time for naive optimism, and the system will undoubtedly need some intervention. "When the price is the same as the value, there are opportunities for sustainable financing. So far, price has not equaled value for fish. This is the biggest, wicked decision-making problem of all: knowing how to set a price that equals the value." (p 295)

In other words, the problem is not just the alarming dwindling of fish stocks but the collective cynicism that not only led to this problem but also amplifies it and resists dealing with it effectively. The key word in the problem statement is the word "set" - even if a few clever people can agree what the right price of fish should be, the real challenge is to set this price into global trading and consumption systems.

Read more »

Beyond Personal Knowledge Management

2013-01-18T10:42:00.002Z

@hjarche via @Cybersal says "I'll show the same thing many times and people have various interpretations of it. Sharing knowledge artifacts is not transferring knowledge." In other words, we don't actually share knowledge, what we share are documents and other artifacts that are supposed to contain knowledge.

If I send a document to Harold or Sally, they may or may not be able to extract some knowledge from it. There are many possible causes of knowledge impedance or attenuation, such as obscure language and specialized terminology, poor presentation, low motivation, and information overload. Even if either of them is able to glean some knowledge from perusing my document, what they get out may be quite different from the knowledge I thought I was putting in. Their interpretations depend on many things: their situation, their prior knowledge, beliefs and values, their expectations about what I'm trying to say, and their ability to read between the lines. (Even my closest friends and associates, who I imagine share a lot of my assumptions, read my documents in ways I find surprising, which is why I always greatly value their comments.)

Harold promotes something he calls Personal Knowledge Management, which describes knowledge management as an Input-Process-Output system.

Input (Seek) - we gather knowledge from our environment, including other people
Process (Sense) - we interpret, personalize and use knowledge
Output (Share) - we pass on our knowledge to other people

Harold talks about Network Learning, which seems to be about taking advantage of digital connectivity and embedding the Input (Seek) and Output (Share) into a wide social network. What I don't see in Harold's account of Network Learning is any sense of collective sense-making - knowledge emerging from the collaboration rather than being generated by one person. I'm also troubled by the implication that knowledge is produced by thinking rather than doing, since I think the most useful knowledge is what emerges from practice.

So while there is undoubtedly a great deal of value in Harold's approach, I think it underplays some of the social and practical elements of knowledge management and organizational intelligence.

Harold Jarche's website: Personal Knowledge Management, Network Learning

See also Jose Baldaia, Who tells a story transfers tacit knowledge and creates new (May 2012)

Places are still available on my forthcoming workshops Business Awareness (Jan 28), Business Architecture (Jan 29-31), Organizational Intelligence (Feb 1).

On Readiness

2013-01-15T09:25:00.000Z

In his presentation on Enterprise Agility at the SCiO meeting yesterday, Patrick Hoverstadt introduced the concept of Yarak.

In falconry, the word Yarak describes a trained hawk that is fit and in a proper condition for hunting. According to the Oxford Dictionary, the word entered the English language in the 19th century, perhaps from Persian yārakī 'strength, ability' or from Turkish yaraǧ 'readiness'.

Patrick explained that Yarak involves a balance between two forces - motivation and strength. The falcon has to be hungry enough to want to hunt, and strong enough to hunt effectively. So the falconer has to get the balance right: too little food and the creature cannot hunt, too much food and it can't be bothered.

When I talk to people about building organizational intelligence in their own organizations, I hear two forms of resistance. One is that the organization has so little inherent intelligence at present that the task is daunting; the other is that the bosses wouldn't want it.

When I take examples from glamorous high-tech companies like Microsoft and Google, this can provoke a somewhat fatalist reaction. People say: This kind of intelligence may be all very well for these hi-tech birds of prey, but ordinary companies like us simply don't have the resources or capability to do any of this stuff.

So it's important to see examples from ordinary companies as well as from the glamorous ones. Every company has some intelligence, although it may be patchy, fragmented and inconsistent. So we need to find ways of linking and leveraging this intelligence to create a positive spiral of improvement.

As for the question of motivation, there will still be many organizations where the senior management team, perhaps lacking confidence in its own intelligence, will lack enthusiasm for developing intelligence across the rest of the organization. This may be a generation thing - the younger generation of management may be much more comfortable with new styles of management (such as "Theory Y") as well as with social networking and other technologies.

Does this mean we have to wait for a generation, until the current bosses have shuffled off to the golf course or the Caribbean cruise? Not if the organization can start to develop intelligence in a bottom-up piecemeal fashion. In which case, what matters is the motivation and strength of the people and groups across the organization, and not just the motivation and strength of the bosses. Can we achieve some useful results without top-down support?

How to make change happen in government

2013-01-13T17:12:00.000Z

Steve Hilton, David Cameron's one-time policy adviser currently on mid-term sabbatical in California, has given Stanford students some frank insights into the workings of Government.

The Prime Minister sometimes opposes the measures his own ministers put forward. He often finds out about these policies from the radio or newspapers.

Only 30 per cent of what the government is doing is actually delivering what we are supposed to be doing.

It’s a brilliant system for paper-shuffling people to be in control. The bureaucracy masters the politicians.

I just wanted to make a few comments about collective intelligence and the role of the policy adviser.

Some Prime Ministers and Presidents have had an extraordinary ability to get through large quantities of paperwork and master the critical points. Cameron has many strengths as a leader, but this doesn't seem to be one of them. As a consequence of this, he is effectively leaving journalists to perform a filtering function - thus he pays attention to an issue only when it is drawn to his attention by the media, and of course, this delayed attention may cause some irritation or embarrassment sometimes. Perhaps a more diligent policy adviser should have picked up some of these issues earlier?

In the system we may infer from Hilton's description, journalists are not only performing a filtering function but also a sensemaking function. There is clearly a difference between the way a policy looks in some bundle of government papers and how it looks when it appears in the media. Again, we might have expected a diligent policy adviser to have anticipated how policies would appear to the public.

But it seems that the politicians and their advisers don't control the volume of paperwork they are given to wade through. In his seminar, Hilton dramatically produced a pile of paper one foot high (representing four days committee output), prompting gasps from students. "The idea that a couple of political advisers read through all this and spot things that are bad, things that are contradictory, is just inconceivable", pleads Hilton.

Of course it is, say members of the previous government including Damian McBride, Gordon Brown's former political press secretary. Which is why the previous government had a greater number of political advisers, and a coordination process (known as the "grid") allocating a manageable number of pages to each. McBride acknowledges that the grid sometimes resulted in leaks to journalists, and suggests that Hilton may have downgraded the grid in order to reduce these leaks, but argues that the grid was a key mechanism for effective government and that the problems Hilton complains about are an inevitable consequence of abandoning this mechanism.

It may also be a consequence of regarding the civil service as a malignant force, trying to pull the wool over the politicians' eyes. (This was a great theme in the original "Yes Minister" series, but has turned into a tired joke in the 2013 series.) Edward Pearce stands up for the independence of the civil service, and complains that it is Hilton who is unrepresentative and unelected.

When Hilton talks about "delivering what we are supposed to be doing", this presumably refers to some kind of top-down strategic plan, formulated before the election and presented in the manifesto. But this raises some important questions about the relationship between strategy and execution, and the possibility for strategies to emerge and evolve during execution.

Which in turn raises some questions about government as a learning system. Recent governments (including Blair's New Labour) have had a focus on delivery, which emphasizes single-loop learning - getting better at achieving a fixed set of goals. However, this has to be balanced against double-loop learning - changing the goals to fit changing circumstances.

In an earlier analysis of New Labour and Delivery, two MORI analysts argued that delivery and achievement was at least partially subjective and rhetorical.

"Delivery" is not keeping your promises, it is convincing the public that you have kept your promises.

What matters is not what you promise, but what the public understands by those promises, and what expectations they arouse.

Hilton clearly agrees about the importance of external communication. He encourages his students to think about how policies can be "branded", and suggests that policies often fail not because they weren't very good policies in the first place but because they are poorly presented. That might be true, but it is also a common excuse: politicians genererally find it easier to admit to errors in presentation than to errors in policy.

Which part of this ecosytem has the longest memory? Presumably the civil servants. And which part has the shortest memory? With some honourable exceptions, probably the media. According to one theory of change, when there are several subsystems operating on different timescales, it is the slowest system that controls the whole. And the Purpose Of the System Is What It Does.

Roger Mortimore and Mark Gill, New Labour and Delivery (IPSOS MORI May 2004)

PM’s aide exposes No 10’s lack of control (Sunday Times, 13 January 2013) (subscription)

John Harlow and Eric Kiefer, Shoes off, feet up, the dude lifts lid on No 10 (Sunday Times, 13 January 2013)

Patrick Hennessy, David Cameron finds out about policies from the newspapers, reveals Steve Hilton (The Telegraph 13 January 2013)

Damien McBride, Whither the Grid? (13 January 2013) Why did the Grid Wither? (14 January 2013)

Edward Pearce, The Unelected (LRB 25 January 2013)

James Tapsfield, Prime Minister often finds out about policies from the radio or newspapers, says former advisor Hilton (The Independent 13 January 2013)

Richard Veryard (ed), Fragile Strategy or Fragile Execution (Storify, December 2012)

Nicholas Watt, David Cameron's ex-policy guru Steve Hilton criticised over policy remarks (Guardian, 13 January 2013)

updated 25 January 2013

Organizational Intelligence Forum - Spring 2013

2012-12-28T15:01:00.000Z

In association with Unicom, I am trying to put together an Organizational Intelligence Forum, possibly on April 25th to coincide with the Performance Management Forum.

Unicom is also planning another Enterprise Architecture Forum in London on March 21st. These generally attract a good audience of senior IT management from blue chip organizations. At the previous Forum in September, we had case studies from finance, oil and higher education. Anyone wishing to present a case study at the next event, please contact me or Unicom.

Those outside the UK may wish to plan a trip to London to coincide with these events.

These events are part-funded by commercial sponsorship and vendor exhibitions. Please contact me or Unicom for a vendor information pack.

Challenge-Led Innovation

2012-12-01T16:16:00.000Z

#oipsrv One view of innovation is that it is motivated by a series of challenges. Once upon a time, we would have used the word "problems", and called this the "problem-solving" approach to innovation. But the word "problem" is now taboo in business world, and we have to find various euphemisms such as "opportunity" or "challenge". Necessity is the mother of invention.

At a seminar at the British Library yesterday (Open Innovation in Public Services), I heard several ways of managing innovation in these terms.

Challenge Prizes - Offering cash prizes to the first person or team that can solve a well-defined problem. This approach has been used for centuries, although the history of technology is littered with unfortunate inventors who have produced something brilliant only to have the prize taken by a rival, or unfairly denied for various spurious reasons. Furthermore, a poorly designed prize can discourage collaboration and thus inhibit innovation instead of encouraging it. However, as Vicki Purewal explained, prize schemes do not have to follow the winner-takes-all, loser-gets-nothing rule, and are often designed to distribute the rewards more fairly and in stages. See Centre for Challenge Prizes

Hack Days - Bringing volunteers together for a day to build quick and dirty solutions to a broad range of problems. This approach is most commonly seen in the software arena, and the example presented was NHS Hackdays.

Challenge Platform - Creating a social network and/or funding for collective problem-solving. Contrasting examples from Barking and Dagenham, Camden, and York.

I think these are all good and useful initiatives. One of the benefits is that they open up the organization or ecosystem to ideas from a much larger community of people. This can be both more democratic and a lot more cost-effective than hiring one of the large consultancies, which seems to be the default method in some organizations. One way of putting this is that it changes the available scope of Organizational Intelligence.

However, problem-solving may be necessary for innovation, but is not sufficient. These initiatives concentrate on invention, which tends to be the sexy part of innovation. @davidtownson from the Design Council showed two slides that placed invention into a broader context. The first of these slides showed the Design Council's design process, drawn as a Double Diamond. The first diamond is devoted to clarifying the problem or requirement, and the second diamond is devoted to solving a well-defined problem. If the challenge-led approach starts from a well-defined problem, then it is just doing the second diamond.

Source: Design Council

The second of David's slides showed a spiral model of innovation, culminating in Systemic Change. (I can't find a version of this spiral on the Design Council website.) This might suggest extending the Double Diamond into a Triple Diamond, where the third diamond tackled the difficult and unglamorous end of the innovation process - rolling out the solution, integrating it with systems and working practices, and embedding it into the target organization or ecosystem.

This triple diamond faintly echoes the three-phase innovation model proposed (in a somewhat different context) by Abernathy and Utterback, which combined product innovation, process innovation, competitive environment and organizational structure:

Fluid phase (exploratory)
Transitional phase (convergence on solution)
Specific phase (focus on costs and performance)

Within the public sector, there may be broad demand for innovations (individual challenges), but there is also extremely strong demand for innovation as such (focus on costs and performance). So a suitably modified version of the Abernathy and Utterback model would be extremely relevant to the public sector.

Let us return to the question of Open Innovation. In her presentation, Heather Niven contrasted a large tanker with a flotilla of small boats. In the specific area of NHS information systems, Heather's metaphor applies very well to the contrast between the NPfIT - a grossly expensive centralized white elephant - and a large number of small but useful apps developed in the NHS Hackdays Carl Reynolds has organized. The "bottom-up" approach may be more promising than the "top-down" approach, as well as more exciting, but there probably needs to be a stronger element of coordination and integration before we can see this innovation as anything more than a load of well-meaning but marginal efforts by a bunch of extremely clever geeks.

Finally, there was some discussion about the word "innovation", and resistance to this concept within the public sector in particular. Perhaps we need to go back to talking about problem-solving?

Abernathy, W.J. and Utterback, J.M. Patterns of Innovation in Technology (Technology Review 1978) via Innovation Zen

For @LucyInnovation 's report of the British Library seminar, see Because not all the smart people work for you ...

Conflicting Narratives

2012-11-14T22:09:00.000Z

@queenchristina_ writes an excellent article on Google, Starbucks, and Amazon, arguing that "for these multinationals immorality is now standard practice" (Independent 13 November 2012). See also Martin Hickman, Good Bean Counters (Independent 16 October 2012).

It is much too easy for British politicians, journalists and taxpayers to get a sense of moral outrage when they discover how little UK tax these American companies pay on their UK earnings. There may be nothing illegal about the fact that the coffee beans are purchased from a Starbucks subsidiary in Switzerland, or that the UK subsidiary pays a royalty for the use of the Starbucks brand to another Starbucks subsidiary in the Netherlands. By a strange coincidence, the Netherlands charges a very low tax rate on royalty payments. Of course there are many British companies that use similar devices to reduce their UK tax bill.

The word "account" essentially means "story". The Starbucks accountants have constructed a story in which Switzerland and the Netherlands are essential links in the Starbucks value chain. British politicians have constructed a different story in which Starbucks is ripping off its British hosts. The moral outrage comes from the clash between these two narratives.

When two narratives clash, it seems natural for us to want to impose our preferred narrative on the Other. Wouldn't it be grand if Starbucks saw the error of its ways and started to pay a fair rate of UK tax. Or wouldn't it be equally grand if the UK tax laws were changed to regulate against these tax avoidance schemes? Or from Starbuck's point of view, wouldn't it be grand if UK corporate tax rates were reduced, so it could simplify its value chain at no cost to its shareholders? (Obviously words like "grand" and "fair" depend on the narrative.)

Of course, what is more likely is that the politicians will issue some threat of tighter regulation, the companies will make some temporary gesture to alleviate public hostility, and that the media will move onto the next target. In the meantime, politicians and the media can make things uncomfortable for corporate executives in the public eye.

And here's a slightly older example - the attempts by the US Government to hold BP to account for the oil spill in the Gulf of Mexico. One BP executive complained that "The administration keeps pushing the boundaries on what we are responsible for." (Wall Street Journal 1 June 2010 via NakedCapitalism)

In any case, there are always going to be conflicting narratives. I was at a workshop in the City this morning discussing how externalities might affect the future of money and the future of commerce. We discussed a range of topics, from mega-cities to carbon trading.

But what exactly are these externalities? Almost anything that one person thinks to be part of The System and another person thinks to be outside The System. As William P. Fisher, Jr points out, "If we have to articulate and communicate a message that people then have to act on, we remain a part of the problem and not part of the solution." (Reimagining Capitalism Again, Sept 2011).

Oliver Greenfield identifies the following challenge:

"The externalities created by companies - or, for that matter, nation states - in their pursuit of self-interest can seem rational at the local, country and even regional level. But at a global level, in a closed system, externalities are costs. What is rational at a company or nation state level is irrational at a global level." (Green Economy Coalition, April 2012)

Thus we have conflicting narratives, which result from disagreement about system boundaries (including time horizon as a type of boundary). A true systems approach might give us a systematic way of playing contested narratives off against each other.

See also

William P. Fisher, Jr, Question Authority (Oct 2011)

José M. Ramos, Temporalities of the Commons: Toward Narrative Coherence and Strategic Vision (Nov 2012)

Linked-In discussion on Good Bean Counters

and my post on Regulation and Complexity (Oct 2012)

Seeing is not observing

2012-11-13T01:24:00.000Z

@anniemurphypaul advises us how to increase our powers of observation - by emulating scientists. "As practiced by scientists", she writes, "observation is a rigorous activity that integrates what the scientists are seeing with what they already know and what they think might be true."

Here are some tips that she draws from an article by Eberbach and Crowley.

Train your attention. Practise focusing on relevant features.

Keep field notes - careful records of your observations, quantifying them whenever possible. Try attaching a number to each episode you observe: how many times a customer picks up an item before deciding to buy it, how many minutes employees spend talking about office politics before getting down to business.

Develop hypotheses that you can test. What happens if a salesperson invites a potential customer to try out a product for herself? How does the tone of the weekly meeting change when it’s held in a different room?

Extended reflection. Actively engage with your observations after the event, organizing and analyzing what you've seen

Cycle. Engage in the cycle of observing, recording, testing, and analyzing many times over.

It may be useful here to distinguish between Field Notes and a Field Journal. Field Notes contain a record of what has been seen or heard by the observer. Whereas the Field Journal contains a record of ideas, thoughts, interpretations and other material. In particular, the Field Journal records anything else that was going on at the time, which later reflection may determine to have influenced the observations.

Sheldon Greaves outlines the approach adopted by Joseph Grinnell, who kept detailed records of his observations from 1894 to 1939, and who was Director of the Museum of Vertebrate Zoology at Berkeley for most of that time.

"The idea behind the Grinnell system is to turn you from a passive recorder of information into a participant in a dialogue with nature. Rather than just recording bits of data, you poke, explore and cross-examine nature in order to sluice nuggets of knowledge from what you see."

But in her review of Molly Gloss's short story The Grinnell method (Sept 2012), Maureen Kincaid Speller offers a detailed critique of the Grinnell method for observing human affairs, and complains that "there seems to be no place in Grinnell’s method for analysis, just the ongoing accumulation of information".

Which is clearly why we also need extended reflection.

Annie Murphy Paul, How To Increase Your Powers of Observation (Time Ideas, May 2012)

Catherine Eberbach, Kevin Crowley From Everyday to Scientific Observation: How Children Learn to Observe the Biologist’s World (abstract) Review of Educational Research March 2009 vol. 79 no. 1 39-68 doi: 10.3102/0034654308325899

Cathryn Carson, Writing, Writing, Writing: The Natural History Field Journal as a Literary Text (Feb 2007)

Jamie Cromertie, How to keep your field notes and journal,

Sheldon Greaves, Making, Maintaining, and Using Serious Field Notes (Feb 2012)

Paul Handford, Notes on Keeping a Field Journal,

Betsy Mason, Beautiful Data: The Art of Science Field Notes (Wired Science, July 2011)

Places are still available on my Organizational Intelligence workshop, November 22nd.

On Agility, Culture and Intelligence

2012-11-13T00:58:00.001Z

Deal and Kennedy (1982) proposed a model of organizational culture, which depended on two factors, risk and the speed of feedback.

Source: Deal and Kennedy

Meanwhile, speed of feedback also affects organizational intelligence. Shorter feedback loops are associated with greater agility and responsiveness, and faster learning, and is a popular meme of the Agile Software movement. Shahzad Bhatti is one of those who emphasizes the link with John Boyd's OODA loop.

"One of key finding he made was that shorter feedback or iteration loop of OODA with low quality was better than longer or tiring cycle of OODA with high quality. Despite the fact that everyone calls his/her organization agile, this feedback loop is real essense of agility."

So that seems to associate Agile with the upper two quadrants of the Deal and Kennedy model, and OODA with the top left quadrant.

So then what are the cultural implications of Agile for the host organization?

Notes and references

Lisa Crispin, Shortening the Feedback Loop (March 2011)
Ilan Kirschenbaum, What does a butterfly say at the end of the day? (May 2012)
Rune Larsen, Know your feedback loop – why and how to optimize it (Oct 2012)
Thomas Sundberg, Why should you use different technical practises when you develop software? (April 2011)

Places are still available on my Organizational Intelligence workshop, November 22nd.

Learning Lessons Learned

2012-11-06T14:45:00.001Z

#orgintelligence Adapted from my contribution to a Linked-In discussion on "Lessons Learned".

There are several strands of learning from experience, and it may be useful to call these out explicitly.

1. Signals. What signals (that turned out to be important) could we have picked up sooner? What signals (that turned out to be unimportant) did we pay too much attention to?

2. What outcomes were achieved? To what extent did these outcomes match requirements and/or expectations? To what extent did requirements and expectations change during the project? Do we now recognize that some of the original requirements and expectations were inappropriate or unachievable?

3. Sense-making. How do we explain the things that went well and not so well? How much of what happened can be attributed to random variation? Which factors could have been better controlled?

4. Policy-making. What measures could be put in place to improve outcomes in future? How should these measures be communicated and enforced?

5. Learning. How many similar lessons were identified by previous projects and not implemented? How do we explain this? (For example, have voluntary guidelines worked in the past, or is a more formal governance called for?) How shall we check whether future projects learn any of these lessons?

Plan versus Policy - Badgers Reprieved

2012-10-24T01:00:00.001+01:00

The UK government has withdrawn from its PLAN to cull badgers, but remains committed to its POLICY of culling badgers.

Badger cull postponed until 2013 (Guardian 23 October 2012)

Here's a stab at a VPEC-t analysis ...

Values: We love badgers, they are so cute. But we also want to feed our children with TB-free milk.

Policy: The government policy is to kill badgers, in order to protect cows from TB. But in order for the cull to be effective, it has to eliminate 70% of badgers in a given area within 2 weeks.

Events: The conditions are not right for the cull this autumn.

Content: But we are definitely going to slaughter the badgers next year, oh yes.

Trust: So if you were a badger, would you trust humans?

A question of organizational identity

2012-10-12T19:24:00.000+01:00

When the Norwegian Nobel committee awarded the Peace Prize to President Obama in 2009, commentators wondered which Obama was being honoured - the actual man who had been in office for less than a year and had as yet made little impact on world peace, or the symbolic hope for the future that America's first black president represented.

Today's announcement that the Peace Prize would be awarded to the European Union has provoked no less surprise. Europe has clearly achieved some extraordinary achievements over the past sixty years, including forming a bond between France and Germany and intervening in Namibia and the Balkans.

But which organization was responsible for these achievements? The European Union was only created in 1993. Many of the achievements lauded by the Nobel committee and by other commentators were done by previous organizations that no longer exist, including the European Coal and Steel Community and the EEC. And arguably the state of Europe has relied as much on other organizations, including the European Court of Justice, the European Central Bank and NATO. (Lord Owen praised the role of NATO on the radio today, but acknowledged that NATO would be an unlikely future winner.)

The Nobel committee praises the EU and its forerunners. Of course that's not quite the same as giving the prize to Obama and praising him for his handling of the Cuban Missile crisis, but it should still remind us that organizational identity is often fluid and complex. Even if an organization does keep the same name, that doesn't mean it has remained the same for sixty years.

Press Announcement

Whose target is it anyway?

2012-10-09T16:47:00.000+01:00

"The IMF downgrades its growth forecasts and casts further doubt on Osborne meeting his debt target" reports @JJ_159 via @Spectator_CH. @EmmaLangman suggests (sadly) that that it is 'our' debt target by association. "What Chancellor chooses, the country lives through."

So let me consider perhaps the most famous target of all time - the apple which the Swiss tyrant Gessler required William Tell to shoot from his son Walter's head. Gessler sets the target, William Tell hits the target, the son survives, Tell subsequently assassinates Gessler, and the Swiss people achieve their freedom.

Wikipedia: William Tell

Altogether now: dadadum dadadum dadadumdumdum ...