Perverse Effects of Business Metrics

Please think about this:

[T]here is a tendency to fall back on what is easiest to measure and to count, i.e. outputs, even if they are less important than outcomes. The danger of this, however, is to negate the major purpose of results-based reform, which is to refocus efforts on what citizens and society ultimately gain from government.

From OECD article http://www.oecd.org/dataoecd/4/10/2497163.pdf paragraph 25.

Methodolatry

I just came across this article discussing "methadolatry" and although the author is discussing modelling and simulations, I think a lot of his insights could be applied in business planning. http://www.palgrave-journals.com/jos/journal/v2/n3/full/jos20087a.html

I love the sections entitled Methodolatry, the Dead fish fallacy, and the Jehova problem (6-8), especially the stuff in each section written under "The motivation".

I will be expanding on these thoughts in the near future.... Something about their impacts on the culture of work and employee engagement. Stay tuned.

A Short Definition of Leadership and its Opposite

A leader sees, encourages and enables others' better natures.

The micromanager will ignore, discourage or otherwise diminish them.

Leaders open and support (authorize) vital systems, while authoritarians shut them down.

Leaders are attuned to creative possibilities, while the officious urge the return to familiar ground when confronted with them.

How Organizations Remain Bureaucratic

When people mistake efficiency for effectiveness (means for ends), there is a pointless adherence to the administrative rules (i.e., bureaucracy in its pejorative sense.) To avoid making this mistake, what has to happen in organizations is a cultural change around the reporting requirements, because people will do (and generally restrict their attention to) what they are measured on.

If the measurements are all about either efficient transactions (e.g., in purchasing, staffing) without reference to context and objectives, or an assessment of the value of the objectives, then nothing has been measured. How can you measure efficiency without some reference to a strategic, big picture, generally not-easily-measured end, especially in public sector and non-profit organizations?

When bureaucratic controls slide from being necessary evils to being just plain counterproductive , something is dreadfully wrong. Controls need to be aligned with goals.

A very crucial element in remedying such a situation is to help people understand that reports are not results, they are just means of getting information, which might be more or less (but is quite often less), helpful to broader planning and information sharing.

A report is information subset covering some aspects of what happened. It is not identical to the concrete events that actually happen. Neverthlesss, some people seem to spend more time bean  counting  than doing, following procedures, rather than innovating, challenging, and leading change. Their efforts need to be undertaken with a view to deep, quality results. Quality and depth of results is important, and that does not mean pulling out an army of accountants immured in a quantophrenic vision of quality control. It means having inspiration, courage, and support to use one's own judgement and discretion in assessing how to best align one's activities with the organization's goals, or even to question the broader social value of the ends being sought.

So it's not just a web of institutional regulations, it's the stifling amount of reportage that is not aligned to anything other than short term means and efficiencies that makes an institution overly bureaucratic (and therefore less efficient). And this adminstrative kind of bureaucracy eventually becomes an entire focus, even a way of life, providing some (i.e., the uninspired and officious) expediencies and a sense of power and accomplishment, having done everything "by the book".

The rest just wither away, eventually.

And thus bureaucracy sustains itself.

Putting theories into practice for organizational renewal

Years ago, I taught a first year introduction to psychology that was being offered to provide students with some information that would help them be more effective in their studies. To that end, I was introducing them to some concepts in learning and memory as modeled in cognitive psychology. The idea was that if they knew how memory worked, they could understand why certain methods of study were more effective than others, and apply that knowledge to their own advantage.

I was totally taken aback one day when I asked a class to do an exercise that involved drawing a conceptual map, or “mind map” of the structures of memory. One of the students asked,

“When you ask us to draw a mind map of memory, do you mean real memory or the stuff we’ve been learning in class?”

Ouch.

How could such a question occur? I heard myself answering that scientific theorists are people doing their best to explain realities such as how real memory works.

When you introduce people to a new theory or model, you are really asking them for a change in perspective, a new way of selecting and organizing information. In fact, a theory is a way of selecting and organizing the information that comes through experience. A good theory is a more systemic way of integrating information. (And as we all know, there are bad theories.) But people are resistant to change, and new theories just bounce off them as theoretical. A change in theoretical paradigms, or institutional perspectives, has a huge impact on how people see themselves and their world, and it takes more than a few reasonable sounding presentations to bring people in.

We select and organize information all of the time, and usually through a combination of two largely complementary dimensions of culture:

1. The residue of theories and beliefs that we have inherited as members of a linguistic community
   
2. Ideas and conversations that support the economic structure (and by economic structure, I mean the actual concrete social interactions and hierarchies in which we participate collectively to produce our livelihood ).

When new theories start to emerge, new ways of looking at things, there are three strands of activity.

1. Conservation: The conservators of tradition (usually the majority) dig in their heels. It’s as if there is a collective antibody to a revision of thought. (e.g., Reductionist backlashes against complex systems theory, patriarchal backlashes against understanding the reality of misogyny.)
   
2. Naïve Adoption: The radicals react to the conservators and, in their haste to get on a change bandwagon, don’t bother to do in-depth research and reporting, and divest the new theories of any credibility and do them a disservice by reducing the ideas to appealing but fanciful metaphors. (New-agers, for instance, on complexity theory, or radical feminists and some of their more questionable generalizations about men.) Genuine researchers get tarred with some kind of pejorative brush, and may even turn away from these research areas given that they have become ideologically tainted.
   
3. Realization: Then there’s the ineluctable (barring any “dark age” forces) but gradual adoption of the new paradigm (such as the adoption of complex systems by certain researchers in environmental science, biology and geology, or the acceptance of the equality of men and women.)

Organizational changes, such as the Government of Canada’s PS Renewal initiative need to be seen to be seen as realizable, not just an "academic exercise" by those who have the responsibility to move it forward.

In order to change the culture, these new ideas need to become ingrained in the discourse but also in the "economics" i.e., systems and practices, of the public service. But before that will happen, it is important to recognize that there will be both a conservative backlash and possibly a rush to a naïve adoption that will serve the interests of the conservators.

Sound leadership, an enabling infrastructure, and a strong focus on the public good will allow the better forces to move the organization forward.

Emotional Intelligence: It's just small-p politics

Some people are brilliant at coming up with routines, processes, tools, and methodologies to manage meetings and address the difficulty, in corporate circumstances, in talking about the subject of their creativity and curiosity (while some techies have "permission" to do that, most people working in large organizations don't.)

People who are members of a community of practice are excited by their work and sharing their expertise as an end in itself. For these people, meetings aren't tainted by having to negotiate a plethora of hidden agendas. And people have the courage to own and speak about their creative ideas without needing some cumbersome legitimating routine. Other groups are more caught up in institutional politics and therefore they need a hand creating "safe spaces" for themselves to have what really should be ordinary conversations about things that interest them as human beings (other than small-p dominance and getting ahead.)

It's not a healthy situation to need some kind of negotiation strategy just to have a conversation about what inspires people's thoughts, hopes and imagination. Perhaps the ability to do that is considered emotional intelligence, but in my book, it's called Promotional Intelligence.

In my opinion, we should learn about emotional intelligence from people enthusiastic about sharing the opportunities for discovery life affords. We should emulate people from communities of interest. We should not emulate those supposedly "emotionally intelligent" members of the narrow small-p politics set who find enthusiam embarrasing generally, or their complements, i.e., those waiting for permission to speak.

Complexity and Employee Engagement

In a blog entry called Social Media vs. Knowledge Management: A Generational War , Venkatesh Rao states

[N]ot only do Boomers not get complexity, they are suspicious of it, thanks to their early cultural training which deifies simplicity. The result of this difference is that Boomer management models rely too much on simplistic ideological-vision-driven ideas. Consider, for instance, the classic Boomer idea of creating “communities of practice” with defined “Charters” and devoted to identifying “Best Practices.” No Gen X’er or Millenial would dare to reduce the complexity of real-world social engineering to a fixed “charter” or presume to nominate any work process as “best.” … I suspect, as Gen X’ers and Millenials take over, that the idea of vision and mission statements will be quietly retired in favor of more dynamic corporate navigation constructs.

I don’t know that this is strictly about the generations, but it certainly is insightful. I’d like to link this to the debate between what is called reductionism and complexity. Reductionists believe that “the truth is simple” and try to explain things by reducing everything to a narrow set of definable objects and a set of laws for their interactions. It’s as if there is a warehouse full of categorized objects (e.g., sub-atomic particles, genes) and a certain set of rules about how these are to interact, that are based on these things’ intrinsic, mathematizable qualities.

To me, it’s obvious that nothing in the universe is like that. First of all, laws are not forces, but mathematical conceptions of patterns of interaction. The idea that you can produce and explain things through the placement of objects and the application of laws leaves out a lot of information. For instance, in nature, when does a process start, and with what event or thing? What are the boundaries and parameters of a system of interactions? (How do you know what factors will be/become relevant?) Does one particle have the same properties as a number of them, and if not what is the “minimum”?

In recent years, complexity and complex systems theory have undercut a lot, but certainly not all (or even most), of reductionist thinking. Physicist, Robert B. Laughlin, for instance, argues that laws are not what causes certain interactions, but the reverse, laws are what emerge from interactions. Complexity theorist, Stuart Kauffman observes that reductionists just take parameters as givens, while showing that in living systems, life creates its own parameters (e.g., cell walls). Nature is self-organizing.

The point is that the old Newtonian paradigm is now crumbling and a new paradigm is well underway to becoming the reigning one, a point that Gilles Paquet has made with effect. So how does this tie to mission statements and charters and what-not?

Methodologies parameterize: They define limits of operation, without necessarily any awareness being generated of how the limits are drawn. This is why there are predictably going to be “perverse effects” of target-setting. Transaction quotas, for instance.

Programmed procedures might be great when you can reasonably identify all of the things that might have an effect on the outcome and control for that but, outside of a laboratory or some staple factories perhaps, life’s not like that. It’s putting the cart before the horse to think that the methods, processes, templates, and formalized procedures we've come up with so far provide adequate parameters of possible activity. Process templates and toolkits, initially touted as panaceas, are all eventually discarded, not always because of the shocking unforeseen, but due to the fact that they can never capture all of the complexity of normal operations. And besides, most people prefer to think rather than follow instructions, as long as they have the time to do so.

An over-reliance on methodology cuts off possibilities and prohibits learning and risk-taking and the use of good judgment, and sets up blind, impersonal systems as abstract authorities. The results of over-programming organizational processes mean you’ll lose the engagement of more risk-tolerant and innovative employees and wind up entangled in a web of rules.