Getting Better

One of the things that I have learned as I have gotten older is that age doesn’t make you any smarter. It just provides you the experience to recognize the things you didn’t know the first time you saw them. It was Randy Pausch, the author of “The Last Lecture” who said:

“Experience is what you get when you don’t get what you wanted”

I have wanted many things that I have not gotten, so needless to say, I think I have probably gained a lot of experience. Some of this experience I think I probably could have done without, but I gained it anyway. What I think I now recognize is that sometimes solving some issues or fixing some problems may be beyond our individual or collective reach. The key to situations like this is to recognize them, and instead of trying to make the quantum leap from thoroughly screwed up to pristinely perfect, just try to make them better.

One of the other things that I have experienced is that just about every situation that I have been in falls into this category.

It’s now election season and the number of talking heads earnestly speaking directly to us through our collective big screen televisions is growing. The various media outlets are lining up behind their favorites, and the various positions on the issues are being identified. In short it is the same thing all over again.

People are searching for the best thirteen second sound bite regarding their personal favorite unsolvable problem. Whether it’s the national debt, immigration, unemployment, or any other issue, it seems everyone is jockeying to position their glib and simple solutions to the Gordian knot style problems that are besetting us.

For those of you that are unfamiliar with the Gordian knot, in ancient times there was a knot that was thought to be unsolvable or intractable. When the knot was presented to Alexander the Great, who at the time was the acknowledged leader of the known world as a challenge, instead of trying to untie or solve the knot, he simply took out his sword and cut it. Believe it or knot (pun intended) this is thought to be the genesis of phrase and concept of “outside the box” thinking (True!).

When I look at today’s slate of candidates I am concerned that any of them that may in the remotest of possibilities be mentioned with or the even more remote possibility be positively compared with Alexander the Great. However there they are, swinging away with their metaphorical swords on television.

I think we have all see the business equivalents of these would be world beaters and problem solvers. They are the ones that have the “simple” answers to declining sales (‘just sell more”) or low margins (“just spend less”), or any other intractable long term problem that the business may be facing.

Unfortunately with all that is plaguing leaders in business today it is easy to see how they may fall victim to the siren song of the “simple solution” providers.

Please do not misunderstand me. I truly believe the basic premises of business are pretty simple. I have said this many times in the past. It is usually the business itself that adds complexity to its organization and operations in search of ever better and more eloquent was of completing the simple tasks required for it to run.

If a simple process adequately handles eighty percent of the situations then with only a little tweaking it might handle close to eighty five percent of the situations. A little more tweaking might get it to ninety percent. Still more might enable it to be implemented globally instead of specifically for the region in which is currently working. Still more might enable the creation and publishing of fancy metrics charts detailing various aspects of the process and the state of its implementation.

Eventually a process is created that works everywhere in all situations, but takes more effort and resource from the business to work for the entire business than the original eighty-twenty rule process that was the starting point.

It can be argued that the “getting better” approach to business could in fact be responsible for the evolution of both business and process into the complex systems that they are today. This would be akin to the example of taking several small logical steps one after the other to eventually arrive at an illogical conclusion or solution.

I think part of the issue we see in situations like this is the lack of rigor that is applied to defining the problem, setting a baseline and then measuring against the improvement on the baseline. If we all know that we need to improve then we just accept the premise. If we state that the plan is to take the solution global then why would we need to measure if there is in fact a global improvement? The goal is no longer improvement of the business but instead is now the global dispersion of the solution.

Getting better does not mean making breakthrough advancements, although these are always exciting and welcome. Rather it means actually trying to use the primary building blocks of the Continuous Improvement Process that J. Edwards Deming envisioned where Feedback drove Efficiency drove Evolution which in turn drove further feedback, and so on.

The key step in this cycle that seems to be missing in both politics and business today is the Efficiency review. Efficiency by its very nature requires the identification, reduction or elimination of sub-optimal structures and behaviors. The definition of efficiency is:

1. The ability to accomplish something with the least waste of time and effort; competency in performance.
2. The ratio of the work done or energy developed …. to the energy supplied…

Many thanks again to Webster’s Dictionary. One of my favorite books.

The idea of efficiency, and getting better means that we need to continuously look at what we are getting out of systems, processes and businesses as compared to the work that we are putting into them. Efficiency is not just the output, but the output as compared to the input required to get it. Too many times it seems that it is taken for granted that just because there is some new way of doing things, or a new process is being implemented that it is better (read more efficient) than what currently exists.

Almost everything that I read these days in books and periodicals regarding business performance seems to bemoan the loss of speed in business, or the lack or loss of decision making abilities in business, or the complexity that is now being faced in business. These seem to be issues that are now inherent in the business system. The simple command to “sell more” or “spend less” won’t solve them.

I guess the same goes for politics in that the system seems to have evolved to reward those that “sound” the best but in reality only kick the problem down the road for the next generation to deal with. Their simple solutions fit nicely into the thirteen second sound bites provided by the media for public consumption. Perhaps that is why it seems that in this iteration of the political campaigning those that are viewed as being outside the normal political process seem to be preferred more than the established politicians by the general populace.

At its most basic getting better, as well as efficiency means doing more business with less resource. That means that being efficient requires the removal of some functions, effort and work from the business as compared to the set baseline while still accomplishing the set goals. It doesn’t need to be a lot. It just has to be measurable in some fundamental way.

Getting better means making sure that attaining your goals actually, measurably improves the business. The simplest definition of getting better that I can think of is showing some measureable improvement in efficiency. If you can’t directly relate and measure the business activity to somehow improving the business efficiency (mathematically identifying work being done to work being saved or improved), then there is probably a pretty good chance that it is not associated with the business getting better.

The Process – Simplicity Paradox

The known world is full of paradoxes. Paradoxi? Whatever. Having studied Physics in school I am somewhat familiar with a couple of scientific paradoxes that changed the way we look at everything. Prior to these changes the world was viewed through the lens of what was called Newtonian Physics. That is the mechanics of the motion of objects of non-zero size. Beach balls bouncing, planets orbiting, that sort of thing. It worked well until technology progressed to the point where people could examine smaller and smaller objects, like “particles”, electrons, and protons and such. Then it didn’t work anymore.

It was at this point in time that a new branch of Physics had to be created. It had to work for the macro-world of bouncing balls and the micro-world of sub-atomic nuclear particles. It was called “Quantum Mechanics”. It had to address the paradoxes that were now visible.

It had to address the paradox that sometimes light behaved as a wave and sometimes it behaved as a particle, when in reality it had to be both a particle and a wave all the time. If that was truly the case then everything had to exhibit the same characteristics of waves and particles. This is called the wave-particle duality.

There were other paradoxes that Quantum Mechanics had to address. The idea that physical quantities such as speed and energy (and others) changed in only discreet amounts, sort of like going up and down steps as opposed to the idea of smooth slopes like slides. It also had to explain why the very act of observing these things changed their behavior and made observing other aspects of the same objects that much more difficult.

So, as usually the question now is: What does this introduction have to do with anything associated with business. I think it is pretty simple. I think we have been working in a business management model that for analogy’s sake is the seventeenth century equivalent of Newtonian Physics. It has worked, or not worked as the case may be, on a somewhat macro-scale, but as we have tried to drive it further down on a micro-scale into the organization, it seems to no longer provide the solutions and value businesses need.

As we have introduced more process into the business system in order to try and drive more and more order into the system, I think we are starting to see a breakdown in the results we are expecting to see. Instead of getting better we have gotten slower. We don’t get the results that we expect. So what have we done? We have attempted to introduce still more and more process on a smaller and smaller level in order to achieve the predictability and order that we desire in our business universe.

I think we may have reached the same metaphorical boundary in business that Newtonian Mechanics Physicists had to cross in order to get to the new Quantum Mechanics model of the world.

As we layer in more and more process in order to try and simplify, streamline and make our business universe more predictable, we are also adding in more complexity to the business system through the application of the process itself. Herein lies the paradox: The very act of adding incremental process in order to simplify the business adds complexity to the business. We may actually end up simplifying the business a little, but it takes more effort in the process than we save in the business.

This incremental process complexity manifests itself in the time it takes to accomplish simple tasks. It can be seen in the number of conference calls that are now required before any actions can be taken. It can be seen in the increased desire for consensus instead of action. All of these complexity symptoms can be seen as the result of trying to drive the increased application of complex process into the business structures.

Extending the Quantum, Mechanical and Measurement metaphors a little farther into business could also give us some of the solutions to the paradoxes that business is now facing. If the very act of trying to simplify adds complexity, and if the very act of measuring modifies the behavior of how the business behaves, what do we need to change?

I think one of the first things we need to do is change what we measure. As we have seen in the quantum mechanical world, the more specifically we try to measure something the more we modify some of the targets other characteristics or attributes. This is actually called the “Uncertainty Principle” (It was actually introduced in the early part of the last century by the German Physicist Werner Heisenberg, and is also known as the Heisenberg Uncertainty Principle).

The same behavior is noted in organizations and is defined by the phrase “Expect what you inspect”. This generally means that by merely measuring something in an organization, whether it has value to the organization or not, you can change the behavior of the organization with respect to what you are measuring. If you measure the wrong things you should expect the wrong behaviors.

So perhaps we should reassess the value of ever more specific metrics and measurements. This thought seems to run almost entirely counter-intuitive to the directions that many organizations are going today. Instead of looking for ever finer and more specific things to measure we may want to take a step back and focus on the organization as a whole.

There are many metrics that the market looks at when it puts a value on the whole of a company, but the primary ones are financial: Orders, Sales, Profit, Earnings and Cash Flow. There may be others, but these should work for this argument’s sake. It is through the application of these metrics that the market usually establishes a value for the business. We might want to add Customer Satisfaction into the business metric mix, but I actually think that metric will sort itself out through the other financial metrics. If you don’t have Customer Satisfaction, or Quality or any of those derivative topics, you eventually won’t have the financials either as your customers will leave and take their business elsewhere.

So the simple baseline metric for every process, project, strategy, product or program should be: Is there a Financial Business Case that improves one of the five financial metrics that justifies the activity? By forcing the creation of that business case you have created the business representation in numbers and also the accompanying metrics for measuring the activity’s success. You can then see if the activity actually generated the beneficial behavior for the business that was targeted. If the value of the proposed activity cannot be defined, then there is a pretty good chance that the activity probably doesn’t need to be given a high priority.

Measurements against any other type of criteria will yield nothing more than some sort of a track against a non-critical objective, and will most probably drive a behavior that is not in alignment with the objectives of the business.

The Process versus simplicity paradox may be a little more difficult to counter, but again I think we can get it down to a business case. I think the idea for all those that would like to create, add to or extend a process is again to ask them to quantify what they are trying to correct or improve, and what resource they expect to expend on the improvement. In other words we need to create a Process – Simplification equation:

Man Hours required to implement the process
Man Hours saved / removed from the business because of the process
Net Business Simplification.

The nice thing about physics is that it can be clearly expressed in terms of numbers. Postulates and theories can be readily proved or disproved via experimentation or observation. I think we need to look at returning business to this sort of practice as well. There is the proposed theory to reduce and align the metrics with the financial value metrics in the business so that all members of the organization are clearly working towards the same goals. This will make sure that the behaviors on the macro-organizational level are fully aligned to the individual or quantum level within the organization.

I believe and agree that some process is required for the proper running of an organization. The question is when do we start experiencing the law of decreasing returns when it comes to adding more process? By requiring at least a business case proposal and defense of the quantified value of each incremental process I think business can begin to regain the focus on the value that each process is supposed to deliver and start to move away from the current approach that appears to be more process as the solution to every issue.

Business like Physics is a numbers oriented discipline. Good processes in business are like good theorems in physics. People may like to believe in them, but they need to be proven out in the numbers and measurements before they become accepted as natural laws.