Let’s Fire the MBA Bean Counters
For over ten years I have been questioning the viability of rigid process management methodologies and was ridiculed for ‘not getting it’. I have presented the scientific evidence around complex adaptive systems, the benefits of Systems Thinking, the heuristics of human decision making, as well as workplace psychology in terms of people motivation. I was and am still told that businesses are not interested in scientific evidence but in Return on Investment only and my response was and is that this is wrong. Customers and business people don’t care about ROI at all, therefore executives should put financial aspects as second priority as well. I have often complained about the short term financial perspectives forced upon businesses by stock market analyst expectations and the ubiquitous bean counters. Doesn’t anyone realize that this is why we have a ‘jobless recovery?’ But slowly, it seems that the tide is turning. I suggest that you read Car Guys vs. Bean Counters: The Battle for the Soul of American Business, in which Bob Lutz, the former Vice Chairman of General Motors, argues that to get the U.S. economy growing again, we need to fire the MBAs and let engineers run the show. Read an abstract in this TIME article.
BPM and the God Complex
BPM is sold to these bean counters as a top-down control methodology to reduce costs. As a way to define all the processes of a business in detail, it is weighed down by an immense governance bureaucracy that stops it from getting off the ground. I have asked often for proof that it does and I can only state once again that after 20 years of BPM implementations there is no statistical proof that all-out BPM is good for a business. People who do BPM as a fully blown methodology to turn a business into a predictable entity suffer from what economist Tim Harford calls ‘The God Complex’. They arrogantly think that they have it all under control and that innovation can be encoded into processes. Harford writes for Financial Times the ‘Undercover Economist’ column. Like me he describes the economy as a complex adaptive system that can’t be analyzed and fully understood. He proposes that the markets are far too complex and unpredictable to be controlled by expert opinions and says: “I’d like to see many more complex problems approached with a willingness to experiment.” In his latest book Adapt: Why Success Always Starts With Failure he suggests that we need to learn to make better mistakes by improvising rather than plan. He presents his perspective in this great TED talk: Trial, error and the God Complex
Process Evolution at the Edge of Chaos
There are those who claim that a huge BPM government bureaucracy represents process maturity and supposedly provides business agility. Excuse my French but that is pure BS with no evidence whatsoever. One can formalize change processes, but one cannot enforce innovation. I am not against BPM as a management principle that focuses the minds of its managers and employees on customer outcomes and helps them to structure their organization accordingly. It is a viable way to organize a business. But BPM must be no more than the organizing context on top of the adaptive complexity that the economy and the business represent. Everything else is a stranglehold of bean counters or shareholders. Businesses show the most innovation and dynamics when they are operating at what Stuart Kaufmann first called ‘at the edge of chaos’, that phase-transition from an unordered to an ordered structure — like water turning into ice crystals. Dynamics are only productive if they are sufficiently guided by goals. Order them too strictly and you kill the ability to innovate. The same problem does exist in software development.
Agile and Scrum for Software Development
In 1995 Jeff Sutherland and Ken Schwaber presented a formalized Scrum process for the first time to the public. In February 2001, Sutherland, Schwaber, Kent Beck, Alistair Cockburn, Jim Highsmith and Mike Beedle, and others, drafted the Agile Manifesto as a Declaration of Independence from the inflexibility of waterfall development. According to Sutherland, Scrum builds on the theory of complex adaptive systems in nature, “to deal with physical reality where things are often not linear, not simple, and not predictable. Scrum — by virtue of its iterative and incremental nature — mimics the biological instinct to survive through constant adaptation.”
Bursts of Innovation
While Charles Darwin assumed that evolution was slow and gradual, he did however not assume that the pace of change was constant as there was no fossile evidence. In 1972, evolutionary scientists Stephen Jay Gould and Niles Eldredge proposed a “punctuated equilibrium” meaning that long phases of genetic stability were interspersed by rapid bursts of change that resulted in new species. Genetic innovation to create a new species is not constant, but driven by a change in outside conditions that enforce adaptation for survival. Sutherland says, “When enough mutations occur in multiple parts of an organism, the system shifts to a higher plateau of functionality.” If seen as a methodology and not a mindset, Scrum can’t guarantee success, but it does push to assess progress and direction on an ongoing basis. That enables many small changes that result under guidance in these bursts of change that have the potential for substantial innovation. See my post on ‘The Complexity of Simplicity.’
The Core Principles of Scrum
Scrum was originally defined as a project management approach for very skilled people who don’t excel under strict guidance and are unable to utilize their creative abilities. What is interesting is that Scrum principles are virtually identical to the requirements of empowerment: Authority, goals and means!
- Define work goals clearly by the intended outcome for the user.
- The team interacts and discusses results with the user not management.
- Teams are autonomous in work estimation, assignment and measurement.
- Management doesn’t interrupt the team during a work cycle.
- Management provides means and removes obstacles.
Nothing in the above definition says that this will only work for software development or engineering projects. It can and should be utilized anywhere. And I do not see the culture as a prerequisite.
Scrum as a Business Management Approach
I am fortunately not the only one and most certainly not the first one to promote such dynamics also for business strategy and management. Steve Denning is a bestselling author and thought leader in leadership and innovation. In The Leader’s Guide to Radical Management (Jossey-Bass, 2010), he shows that the future of management needs five fundamental shifts in terms of the firm’s goal, the role of managers, the way work is coordinated, and turning from value to values and from command to conversation. Denning says: “Traditional management has failed. To deal with a radically different marketplace and workplace, today the whole organization must be focused on creating a stream of additional value to customers through continuous innovation. This reinvention of management reflects an application of Agile/Scrum thinking to the whole organization.”
How Agile is LEAN?
There are some similarities of Lean to the concepts of Agile and Scrum. I see it however as firmly rooted in manufacturing and not for people-to-people interaction. It is still way too rigid and top-down driven. In particular I object to the proposals of motivating people with money for financial performance. It is scientific fact that this doesn’t work. Lean proponents also say that at first all the excess people ought to be fired. That is the worst way to start anything. Who is excess and why? What is well positioned in Lean and should be embedded in the Business Architecture is the concept of Value Streams. And by the way: Plan-Do-Check-Act is not a scientific method!
ACM Enables Agile and Scrum
Along the lines of my above convictions I created software to empower the people of a business to execute their processes transparently but at will. In 2009 at a WfMC meeting we decided to name such an approach ACM — Adaptive Case Management. Focused on knowledge workers only, I was not satisfied and continued to push for a more global, holistic business perspective for process management. Some progress seems to come about in that direction. So is ACM a concept, a problem domain, an integrated solution, a market fragment or even an ‘UN-solution’ as Keith Swenson suggests? It certainly was pitted against BPM for a while, which is both a business management concept and a market fragment. The conflict is not about products but about management concepts and therefore fundamental. Therefore it can’t be resolved. ACM follows the same ideas as Agile and Scrum and not the Tayloristic control illusion. We even do have a Scrum template in our ACM platform that we use for our inhouse Product and Application Lifecycle Management. Some say that ACM requires a change in culture, but as always I like to turn these ideas upside-down: ACM empowers the executive to bring out the best in his/her organization without enforcing processes or enforcing changes in company culture!
References, resources and interesting blogs: