Someone has just done the wrong thing. It could be a customer has “gamed” a bigger discount or a sales person has gone “rogue” and given the customer the discount to make their quarter end target.
After the internal reviews and finger pointing, based on the assumption of guilty until proven innocent, the answer is to add more rules to make sure it doesn’t happen again. Another level of management approval is put in place or a further finance sign off is required.
It is hard to argue against this logic, the organization lost money it could have earned. The new rules will now stop that, even if it is only occurring 1% of the time.
The new rule is added to all the other existing rules to protect the organization. We call this collection of rules and processes, bureaucracy. We can all think of the many processes that impact our work, expense claim reviews, budget expenditure forms, hiring requests, travel approvals and more. We sadly laugh when we hear the line in Little Britain, the UK comedy show, “the computer says no”, yes more rules.
The unspoken assumption is we should trust no one. We should manage the 99% of customers and employees who do the right thing like the 1% that might knowingly, or unknowingly, do the wrong thing.
You may have experienced this as a customer where you come away feeling like you have had to jump through multiple hoops just to give the supplier your money.
Managing everyone as if they are going to do the wrong thing leads to:
- slowing down customer interactions and employees doing their work
- decisions being made by processes and not the people in the best position to make the decision
- removing decision authority, which removes ownership, which creates employee disengagement, please see “What’s the missing ingredient for employee engagement?”
- many, many processes to handle the many, many different situations that arise from the complexity in the world, please see, “What does management do?”
and in the end it doesn’t reduce the risks, because there are not enough rules in the world to cover all the possible permutations and combinations.
In other words, this leads to bureaucracy.
What if we flipped this thinking? What if instead of building processes to protect us against the 1% we built processes to help the 99%? Let’s treat the 1% as the exception and not as the majority.
We can start with asking, how many processes and rules could be eliminated if 100% of the time people did the right thing? Now we know this isn’t the case, we make mistakes, processes don’t always work and yes there are people out there ready to take any advantage.
But the reason for asking this question is to change our thinking. Instead of trying to work out in advance what could go wrong, what if we put in processes that had the capability to adjust when things went wrong and put them back on the right path.
This is how our body works. When we pick something up and it is heavier than we thought, we adjust by taking a tighter grip. We didn’t list out the possible weights the object could be and then defined a set of processes for each weight, “if it is over forty pounds you need to first gain approval from your team leader, wear gloves, have your feet 24 inches apart, etc”.
We started by picking up the object and making the necessary adjustments. To do this we have a set off principles we follow, firm grip, straight back, bend at the knees, get help if it is too big.
Take driving a car. We are constantly making adjustments to make sure we are in the middle of our lane, not too close to the car in front, using indicators when we change lanes, braking suddenly when the person in front didn’t use their indicator when changing lanes, scanning the road ahead to find our next turn to head towards our destination.
Think about the people developing autonomous cars. They are not writing the hundreds of millions of rules that would be necessary to direct cars to travel on all of the roads in the world. They are building systems that scan the environment using Cameras, Radar, Lidar (light sensing radar) or Ultrasonic sensors and use principles (heuristics) to adjust to the conditions, adaptive cruise control, steering adjustments, etc.
Imagine if an autonomous car needed to have an approval committee sitting in the back seat to issue speed adjustments for adaptive cruise control. The ultimate back seat driver! Or the car needed to be connected back to a central system to make steering adjustments, lane changes or route selection. How effective would that be?
But this is exactly what we do in the belief of achieving lower risks, greater control and increased efficiency. The end result is the exact opposite.
How can we apply this to our organization? Just like our examples of lifting a heavy object or driving a car we need to know the outcome we want to achieve. Real time data, to know our position, relative to our surroundings. This gives us our destination and a datum to make course correcting decisions against. We also need principles that provide the actions we can take in making these adjustments. Speeding up is an option to get to our destination quicker but not if it breaks the speed limit or the car in front of us is stopped. Changing lanes maybe a better choice but only if it is safe to do so.
If these principles sound like Mission Statements, Measurements, Horizontal Flow and Vertical Leverage then you are right.
Mission Statements: provide a destination to plot our course against.
Measurements: tell us if we are on or off course and by how much.
Horizontal Flow: gives us the principles and actions to make the course corrections without going to an approval committee made up of silo functions.
Vertical Leverage: provides an avenue to ask for help, like a driver taking over from the autonomous car to change lanes because there is an accident ahead.
Byron Reeves and J. Leighton Read in their book, Total Engagement, explain how gamification can be used to provide direction and measurements for course correction with their example of Jennifer working in a contact center;
“The first thing Jennifer does is check on her team’s progress. After the last shift, how do they rank on number of call resolutions, who in the group has “levelled up” (achieved a new status based on performance), and who needs encouragement? ….
…Most important, there are teams. Jennifer knows that her success is determined in part by how well her whole team performs, and she has a clear understanding of what she gets when they win.
Data about the team are available for all to see… She also sees how these metrics are connected to the overall performance of her business unit as a mission-critical component of a world-class company (her group is making a difference).”
Designing for the 1% ultimately fails because there are so many variables and complexity in the world that we will always miss something. When something unforseen comes along we can not adjust because our bureaucracy has made our organization fragile, it can’t change without breaking. Operating with self correcting principles creates what Nicholas Taleb calls an Anti-Fragile organization. It can adapt to the changes in its environment.
Bureaucracy is a creation of our own making. It starts by making the mistake of building rules and processes for the 1% of errors and not to help the 99% get things done. We need to change our thinking from designing rules for what can go wrong to learning principles to adjust if things do go wrong.