Flowchart THIS: Economy, Competition, Expectations, and Innovation
Let me ask you what the most profound difference in people’s lifestyle between 1900 and 2000 is? Many would say that it is technology, healthcare, safety, birthrates or personal freedom.
The correct answer is: THE RATE OF CHANGE! As the rate of change increases, the complexity of the problems that we have to deal with also increases because of the many complex interdependencies that we do not understand or even know about. The more complex these problems turn out to be, the more time we should need to work out a solution and the shorter is the benefit of the solutions we find. That aspect of increasing dynamics is clearly in conflict with the idea of spending much time to analyze as-is and then to-be processes when in the meantime the environment and conditions change unpredictably.
There are five key forces that influence the rate of change: competition, economy, customer expectations, politics, and technology innovation. None of these environmental factors can be controlled or encoded as input parameters into processes or rules sets or foreseen by predictive analysis. Businesses need people who anticipate those changes and can intuitively guide the business to adapt. This human intuitive skill is at the core of knowledge work that deals with unpredictability. Flowchart this!
Those who promote BPM, Lean or Six Sigma or a combination thereof demand however that all business activities must be formed into a hierarchy of process flows to achieve a higher state of manageability. From a planning perspective it seems ideal if businesses would not be complex adaptive and consist of independently acting agents. Businesses that are seen as animated systems in which the management has a brain and employees don’t, can neither be correctly understood nor reasonably well managed, with or without a process management mindset. According to BPM methodology, process unpredictability is caused by lack of analysis, unidentified waste, necessary variations and avoidable exceptions. However, every real-world process is, in principle, unpredictable unless it enforces all human interactions. Imagine we remove all free-will human interactions from claims handling, social benefits, processing, court cases, medical treatment, purchase-to-pay clearing, business-strategy planning, and budgeting. They would completely lose their problem solving capability. Even process governance is unpredictable knowledge work that can’t be defined into process flows.
Knowledge-driven processes are not just unpredictable, but can be chaotic and very sensitive to initial conditions. However, empowering business users to deal with that is not anarchy or poor management. Empowerment is about authority, goals and means. Only complex adaptive social systems can be resilient, self-organized and develop hierarchies that can deal with the increased rate of change.
Social systems can even self-organize with hierarchies of animated entities without explicitly agreed upon purposes – like most natural ecosystems actually do. Where humans meddle with a control mindset things usually go wrong. Ecosystems do find recurring equilibrium points solely based on current capabilities and fit, and still drive each entity in the hierarchy to evolve upward. As much as we dislike hierarchies, they have the immense benefit of local and immediate sensing, with local knowledge enabling immediate response without requiring the whole system to be aware and react to each change. Hierarchy is a cardinal to efficiency. It is however the adaptability that creates the resilience and the self-organization that builds the hierarchies. The self-organization of a business emerges from the capabilities of each entity in the hierarchy supporting the overall purpose of the social system. That is the reason for the success and interest into Social Networking.
While Social communication offers the opportunity for evolutionary emergence, one cannot simply assume that adding that capability to a BPM product or by allowing these communications in a Lean Six Sigma environment that they will improve the results of these approaches. New knowledge is searched and eventually created where the pain point is and ideally by those people who feel the pain and want to avoid it. They have the highest motivation and the closest knowledge of the problem. Knowledge segmentation is a key benefit of hierarchies which do not enforce knowledge from the top-down. Each hierarchy level develops and uses its own knowledge to do its job.
To support of these problem solving activities and emerging business knowledge from user interaction requires the creation of new data, new content, new rules, new goals, new user interfaces and new roles by the business users. Simply adding To-Dos or task lists, enabling message threads, or offering data or content access does not provide ‘actionable knowledge.’ To make new knowledge manageable and accessible, user activities have to be organized in defined process goals, which are derived from global objectives and focused on customer outcomes, with all entities managed by architecture to ensure compatibility to the existing processes and to ensure common understanding between all involved.
Orthodox BPM ignores these emergent properties of a hierarchy: properties of the system that the separate parts do not have (Axelrod & Cohen, 2000). This was also considered by Donella H. Meadows in ‘Thinking in Systems: A Primer’: “Hierarchical systems evolve from the bottom up. The purpose of the upper layers of the hierarchy is to serve the purposes of the lower layers. The original purpose of a hierarchy is always to help it’s originating subsystems do their jobs better. This is something, unfortunately, that both the higher and the lower levels of a greatly articulated hierarchy easily can forget.”
Systems Thinking improves the business strategy by increasing the understanding of complexity (to utilize its adaptive ability) rather than trying to turn the business into a fragile complicated machine whose knowledge is hardcoded into some business processes. Knowledge is not only power, as the adage goes, but it is the difference in knowledge between business and customer that is turned into a profit. The success of a business is directly related to how much of its non-manufacturing work is deemed a) automated, b) process managed work, or c) knowledge work. The more knowledge work is performed the more value the business brings to its customers.
Microsoft founder Bill Gates has suggested that in an inefficient organization more technology amplifies inefficiency. That may be correct in some large, poorly managed bureaucracies like Microsoft. Great technology can also amplify the creative ability in people. I propose from my own executive experience that only creativity enables a business to innovate its processes through self-organization from within. Organizations do not fall from the sky as effective and they are not only efficient when hordes of consultants optimize them by squeezing the organization dry like a lemon. I propose the best businesses are those where the innovative powers come from within and from the bottom of the hierarchy – from its people! It is the executive’s job to empower that creativity and guide it by objectives and not by flowcharts. Its the executive who must understand the difference between hierarchy and bureaucracy!