Month: September 2010

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The Plague of Niggles

Historians tell us that in the Middle Ages about 25 million people, one third of the population of Europe, were wiped out by a series of Plagues! We now know that the cause was probably a bacteria called Yersinia Pestis that was spread by fleas when they bite their human hosts to get a meal of blood. The fleas were carried by rats and ships carried the rats from one country to another.  The unsanitary living conditions of the ports and towns at the time provided the ideal conditions for rats and fleas and, with a superstitious belief that cats were evil, without their natural predator the population of rats increased, so the population of fleas increased, so the likehood of transmission of the lethal bacteria increased, and the number of people decreased. A classic example of a chance combination of factors that together created an unstable and deadly system.

The Black Death was not eliminated by modern hi-tech medicine; it just went away when some of the factors that fuelled the instability were reduced. A tangible one being the enforced rebuilding of London after the Great Fire in Sept 1666 which gutted the medieval city and which followed the year after the last Great Plague in 1665 that killed 20% of the population. 

The story is an ideal illustration of how apparently trivial, albeit  annoying, repeated occurences can ultimately combine and lead to a catastrophic outcome.  I have a name for these apparently trivial, annoying and repeated occurences – I call them Niggles – and we are plagued by them. Every day we are plagued by junk mail, unpredictable deliveries, peak time traffic jams, car parking, email storms, surly staff, always-engaged call centres, bad news, bureaucracy, queues, confusion, stress, disappointment, depression. Need I go on?  The Plague of Niggles saps our spirit just as the Plague of Fleas sucked our ancestors blood.  And the Plague of Niggles infect us with a life-limiting disease – not a rapidly fatal one like the Black Death – instead we are infected with a slow, progressive, wasting disease that affects our attitude and behaviour and which manifests itself as criticism, apathy and cynicism.  A disease that seems as terifying, mysterious and incurable to us today as the Plague was to our ancestors. 

History repeats itself and we now know that complex systems behave in characteristic ways – so our best strategy may the same – prevention. If we use the lesson of history as our guide we should be proactive and focus our attention on the Niggles. We should actively seek them out; see them for what they really are; exercise our amazing ability to understand and solve them; and then share the nuggets of new knowledge that we generate.

Seek-See-Solve-Share.

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How to Kill an Organisation with a Budget.

The primary goal of an organisation is to survive – and to do that it must be financially viable. The income must meet or exceed the expenses; the bottom line must be zero or greater; your financial assets much equal or exceed your financial liabilities.  So, organisations have to make financial plans to ensure finanical survival and as large organisations are usually sub-divided into smaller functional parts the common finanical planning tool is the departmental budget. We all know from experience that the future is not precisely predictable and that costs tend to creep up; and the budget is also commonly used as an expense containment tool.  A perfectly reasonable strategy to help ensure survival.  But by combining the two reasonable requirements intoi one tool have we unintentionally created a potentially lethal combination? The answer is “yes” – and this is why ….

The usual policy for a budget is to set the future budget based on the past performance.  Perfectly reasonable. And to contain costs we say “if our expenses were less than our budget then we didn’t need the extra money and we can remove it from our budget for next year.” Very plausible.  And was also say “if our expenses were more than our budget then we are suffering from cost-creep and the deficit is carried over to next year and our budget is not increased.”  What do we observe?  We observe pain!  The first behaviour is that departments on track to underspend will try to spend the remainder of the budget by the end of the period to ensure the next budget is not reduced … they spend their reserves.  The departments on track to overspend cut all the soft costs they can – such as not recruiting when people leave, buying cheap low quality supplies, cancelling training etc.  The result is that teh departments that impose internal cuts will perform less well – because they do not have the capacity to do their work – and that has a knock on effect on other departments because the revenue generating work is usually crosses several departments.  A constraint in just one will affect the flow through all of them.  The combined result is a fall in throughput, a fall in revenue, more severe budget restrictions, and a self-reinforcing spiral of decline to organisational death! Precisely the opposite intention of the budget design.

If that is the disease then what is the root cause? What is the patholgy?

The problem here is the mismatch between the financial specification (budget available) and the financial capability (cost required).  The solution is to recognise the importance of the difference. The first step is to set the budget specification to match the cost capability at each step along the process in order to stabilise the flow; the second step is to redesign the process to improve the cost capability and only reduce the budget when the process has been shown to be capable of working at a lower cost.  This requires two skills: first to be able to work out the cost capability of every step in the process; and second to design-for-cost. Budgets do neither of these and without these skills a budget transforms from a useful management asset to lethal organisational liability!

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What do We Mean by Capacity?

I often hear the statement “Our problem is caused by lack of capacity?” and this is usually followed by a heated debate (i.e. an arugment) about how to get more resources to solve the “capacity problem”: The protagonists are usually Governance who start the debate by raising a safety or quality problem; Operations who are tasked to resolve the problem and Finance who are expected to pay.

But what are they talking about? What exactly is “Capacity”? The reason I ask is because the word is ambiguous – it has several meanings – and unless the precise meaning is made explicit then individuals may unconsciously assume different interpretations and crossed-wires, confusion and conflict will ensue.

From the perspective of a process there are at least two distinct meanings that must not be confused: one is flow capacity and the other is inventory capacity.  To give an example of the distinction consider your household plumbing system: the hot water tank has a capacity that is measured in the volume of the tank – e.g. in litres; the pipe that leads from the tank to your tap has a capacity that is measured by the flow through the pipe – e.g. in litres per minute.  These are clearly NOT the same; they are related by time: A 50 litre capacity tank connected to a 5 litre per minute capacity pipe will empty in 10 minutes. So when you are talking about “capacity” be sure to be explicit about which form you mean … volume or flow; static or dynamic; inventory or activity.  It will avoid a LOT of confusion!!

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Do We have a Wealth of Data and a Dearth of Information?

Sustained improvement only follows from effective actions; which follow from well-informed decisions – not from blind guessing.  A well-informed decision imples good information – and good information is not just good data. Good information implies that good data is presented in a format that is both undistorted and meaningful to the recipient.  How we present data is, in my experience, one of the weakest links in the improvement process.  We rarely see data presented in a clear, undistorted, and informative way and commonly we see it presented in a way that obscures or distorts our perception of reality. We are presented with partial facts quoted without context – so we unconsciously fill in the gaps with our own assumptions and prejudices and in so doing distort our perception further.  And the more emotive the subject the more durable the memory that we create – which means it continues to distort our future perception even more.

The primary purpose of the news media is survival – by selling news – so the more emotive and memorable the news the better it sells.  Accuracy and completeness can render news less attractive: by generating the “that’s obvious, it is not news” response.  Catchy headlines sell news and to do that they need to generate a specific emotional reaction quickly – and that emotion is curiosity! Once alerted, they must hold the readers attention by quickly creating a sense of drama and suspense – like a good joke – by being just ambiguous enough to resonate with many different pepole – playing on their prejudices to build the emotional intensity.

The purpose of politicians is survival – to stay in power long enough to achieve their goals – so the less negative press they attract the better – but Politicians and the Press need each other because their purpose is the same – to survive by selling an idea to the masses – and to do that they must distort reality and create ambiguity.  This has the unfortunate side effect of also generating less-than-wise decisions.

So if our goal is to cut through the emotive fog and get to a good decision quickly so that we can act effectively we need just the right data presented in context and in an unambiguous format that we, the decision-maker, can interpret quickly. The most accessible format is as a picture that tells a story – the past, the present and the likely future – a future that is shaped by the actions that come from the decisions we make in the present that we make using information from the past.  The skill is to convert data into a story … and one simple and effective tool for doing that is a process behaviour chart.

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Egomatosis

There is a common, and often fatal, organisational disease called “egomatosis”.

It starts as a swelling of the Egocentre in the Executive Organ that is triggered by a deficiency in the Humility Feedback Loop (HFL), which in turn is linked to underdevelopment or dysfunction of the phonic sensory input system – selective deafness.

Unfortunately, the Egocentre is located next to other perception centres – specifically insight – so as the egoma develops the visual perception also becomes progressively distorted until a secondary cultural blind-spot develops.

In effect, the Executive organ becomes progressively cut off from objective reality – and this lack of accurate information impairs the Humility Feedback Loop further – accelerating the further enlargement of the egoma.

A dangerous positive feedback loop is now created that leads to a self-amplifying spiral of distorted perception and a progressive decline of judgement and effective decision making.

The external manifestation of this state is a characteristic behaviour called “dystrustosis” – or difficulty in extending trust to others combined with a progressive loss of self-trust.

The unwitting sufferer becomes progressively deaf, blind, fearful, delusional, paranoid and insecure – often distancing themselves emotionally and physically and communicating only via intermediaries using One-Way-Directives.

Those who attempt to communicate with the sufferer of this insidious condition often resort to SHOUTING and using BIG LETTERS which, unfortunately, only mirrors the same behaviour.  As the sufferer’s perception of reality becomes more distorted their lack of insight and humility blocks them from considering themselves as a contributor to the problem.

The ensuing conflict only serves to accelerate their decline and the sufferer progresses to the stage of “fulminant egomatosis”.


“Fulminant egomatosis” is a condition that is easy to identify and to diagnose.  Just listen for the shouting, observe the dystrustosis and feel the fear.

Unfortunately, it is a difficult condition to manage because of the lack of awareness and insight that are the cardinal signs.

Many affected leaders and their organisations now enter a state of Denial – unconsciously hoping that the problem will resolve itself – which is indeed what happens eventually – though not in the way they desperately hope for.

In the interim, the health of the organisation deteriorates and many executives succumb, unaware of, or unwilling to acknowledge the illness that claimed them; meekly accepting the “inevitable fate” and submitting to the terminal option – usually delivered by the Chair of the Board – Retire or Resign!

The circling corporate vultures squabble over the fiscal remains – leaving no tangible sign to mark the passing of the sufferer and their hapless organisation.  There are no graveyards for the victims of fulminant egomatosis and the memory of their passing soon fades from the collective memory.  Failure is a taboo subject – an undiscussable.

Some organisations become aware of their affliction while they are still alive, but only after they have reached the terminal stage and are too sick to save.  The death throes are destructive and unpleasant to watch – and unfortunately fuel the self-justifying delusion of other infected organisations who erroneously conclude that “it could never happen to them” and then unwittingly follow the same path.

Unfortunately, egomatosis is an infectious cultural disease.  The spores, or “memes” as they are called, can spread to other organisations.  Just as Dr Ignaz Semmelweis discovered in 1847, the agents-of-destruction are often carried on the hands of those who perform organisational postmortems.  These meme vectors are often the very people brought into assist the ailing organisation, and so become chronically infected themselves and gravitate to others who share their delusions.  They are excluded by healthy organisations, but their siren-calls sound plausible and they gain entry to weaker organisations who are unaware that they carry the dangerous memes!  Actively employing the services of management consultants in preference to encouraging organisational innovation incurs a high risk of silent infection!  Appearance of the symptoms and signs is often delayed and by then it may be too late. 

The organisations that are naturally immune to egomatosis were “built to last” because they were born with a well-developed sense of purpose, vision, humility, confidence and humour.  They habitually and unconsciously look for, detect, and defuse the early signs of egomatosis.  They do not fear failure, and they have learned to leverage the gap between intent and impact.  These organisations have a strong cultural immune system and are able to both prevent infection and disarm the toxic-memes they inevitably encounter.  They are safe,  fun, challenging, exciting, innovative and motivating, places to work – characteristics that serve to strengthen their immunity, boost their resilience, and secure their future.

Some infected organisations are fortunate enough to become aware of their infection before it is too late, and they are able to escape the vicious cycle of decline.  These “good to great” organisations have enough natural humility to learn by observing the fate of others and are able to detect the early symptoms and to seek help from someone who understands their illness and can guide their diagnosis and treatment.  Such healers facilitate and demonstrate rather than direct and delegate.

All organisations are susceptible to egomatosis, so prevention is preferable to cure.

To prevent the disease, organisations must consciously and actively develop their internal and external feedback loops – using all their senses – including their olfactory organ.  Cultural and political bull**** has a characteristic odour!

They also regularly exercise their Humility Feedback Loop to keep it healthy – and they have discovered that the easiest way to do that is to challenge themselves – to actively look for their own gaps and gaffes – to look for their own positive deviants – to search out opportunities to improve – and to practice the very things that they know they are not good at.

They are prepared to be proved lacking and have learned to stop, look, laugh at themselves – then listen, learn, act, improve and share.

There is no known cure for egomatosis – it is a consequence of the 1.3 kg of ChimpWare between our ears that we have inherited from our ancestors – so vigilance must be maintained throughout the life of the organisation.