Innovate Your Own Cure!

Few days back my friend Dan R.D (@ddrrnt is his twitter handle) and I were having an interesting dialog over Google hangout.

Dan is busy researching on many management issues like strategy, innovation, leadership, ethics and simulation games on leadership and management.

Our dialogue was more focused on innovation with a special emphasis on Rapidinnovation as I practice it.

Our dialog went somewhat like this:

Dan: Do you see manufacturing companies take up innovation as their first choice?

Me: No. In fact it is usually the last choice.

Dan: And why is that?

Me: This is because companies first try out tried, tested and proven methods to achieve their aspiration. In that process they do achieve quite a bit. The focus is generally on operational efficiency and cut costs. When they don’t achieve what they set out for then only they take up innovation to achieve their goal. They generally take up innovation when they find their ‘magic bullets’ not providing them the needed relief or results.

Dan: Why do you think innovation is needed in an organization?

Me: Two things. First, while strategy gives direction to an organization innovation drives it. Strategy and innovation go together. Second, all organisations are unique in their own individual ways. This is because design of all organizations differ. These small differences create the uniqueness for each company. Hence there seems to be no common magic formula or bullets to bite. Each organization has its own story and those stories can only be improved by people within the organization through their innovative efforts.

Dan: What does Rapidinnovation stand for? Do you mean to say innovations are done quickly.

Me: Rapidinnovation is an acronym, which stands for Reliability, Availability and Performance Improvement through Design Innovation.

I agree with you that innovations are also be done quickly and effectively. If you see it that way you may call it RAPID.

Dan: Say more.

Me: People are generally afraid of innovation. And rightfully so. This is because there is always a risk involved in innovation. So there must be a decision making criteria to achieve a balance between risks and rewards. Rewards must be very clear in their minds, especially in the minds of the management. These are in terms of improved reliability, availability and performance – something that help them earn more by doing something better with lesser effort and earning more revenue in the bargain rather than only focus on producing things cheaply by cutting costs. Also innovation should be such so as to reduce risks to the minimum while maximizing the benefits.

Dan: How is that achieved?

Me: This is achieved through design innovation which is a type of minimal intervention that maximizes return on the assets.

Dan: What is the central idea in design innovation?

Me: Anything that we find in a manufacturing organization or for that matter in any organization is a result of design. It might be machines, their layout, their maintenance systems, product design, management systems, strategy and organizational design. So we find design everywhere. However, these are designed separately and also managed separately. But then these are also made to work together. This is precisely where the problem arises. When all these systems work together they intensely interact with each other. Small imperfections within these interactions produce failures, problems or issues that prevent any organization from achieving what they want to achieve.

[Additional notes – interactions within an organization is like different elements communicating to each other like people to produce an overall symphony. If there are imperfections within such communication links the symphony either turns into noise or stops. Design innovation aims to eliminate those imperfections to correct and regain the energy flow of the symphony]

The job in Rapidinnovation is to find or identify these hidden imperfections and then eliminate them through innovation thereby releasing the trapped or clogged energy within the organization to flow again smoothly and more productively. Thereby you achieve more with less. However, such innovations must be minimally invasive so that it not only uses the least amount of effort, resources and time to execute but also minimizes risk to the minimum possible extent. It must however ensure long term benefits to the company in terms of ROA (return on assets). Else innovations are meaningless.

Dan: How do we find out these imperfections?

Me: Start from failures an organization experiences. Start anywhere and soon one gets to see the whole symphony.

Dan: What makes it difficult?

Me: Labeling and placing things in silos. It is usual for us to label things. It is useful but not when trying to solve a problem. The issue becomes more acute when we attempt to solve complex problems for which answers are neither obvious or clear. So for example when we see a quality problem we instantly label it as a quality problem. Or for instance we observe a problem in customer experience we quickly label it as say a HR issue. Then we appoint appropriate persons to look at the issues. What is missed in the process is the links and interactions. The quality problem might well be an issue connected to machines and their performance and the customer experience issue might well be connected to manufacturing issues. So labeling and silo approach make things difficult.

Dan: What is the process you generally adopt?

Me: It is mainly through dialogues with people. They tell about their pains, shortcomings, challenges, problems and you soon get to see the patterns within those stories and narratives. You then help them see or notice the underlying patterns that are affecting them and off they go on their own creating their own cures. Seeing the affected patterns is the important thing. Once seen the rest follows. However, there is one problem. If you don’t get to see the pattern in a blink you possibly miss the pattern for a long time. Whatever it might be — at the end of the day, there is really no magic formula to apply. People must innovate their own cure to get rid of organizational diseases and keep them at bay.

With this the dialogue ended.

Later Dan beautifully summarized the outcome of our dialogue in the following paragraph:

“The inclusive and participation-driven approach in which his inquiries spark the needed interactions which then trigger change in organisations is awesome, to say the least.  What I found most appealing, is that we’re not offering magic formulas or proven solutions, but helping people come up with their own solutions.  We’re nurturing the emergence of patterns which can then be woven into a shared narrative, a shared strategy, a shared objective.  The harmonizing effects reduce imperfections and increase flow, so that exchanges carry more value and are RAPID with increased potential for innovation. “

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Model T in a Famous Hospital

Few days back my friend, Debu and I visited a famous heart hospital called Rabindranath Tagore Heart Research Institute in Kolkata named after the famous poet.

It was founded by Dr. Devi Shetty, a famous heart surgeon. Its team of doctors were top grade specialists. People trusted them for their skills and diagnosis. Even patients from the neighboring countries of Bangladesh, Nepal, Bhutan & Pakistan flocked to the place patiently milling around to have themselves treated.

Started in the year 2000 it has acquired a formidable reputation. In little over a decade the place had an overcrowded look. With the ever-increasing stress of handling the ‘swelling crowd’ the smiles on their employees faces were turning into perceptible unwelcome frowns.

Big photo posters were displayed all around proudly showing their team of competent doctors loudly proclaiming the enviable number of successful operations and other procedures they carried out. It was a service replica of Ford’s Model T. The founder Dr Shetty prided himself for having applied that model so well in service of the people. A well-known national daily covered an interview with Dr. Shetty about his dedicated application of Model T in service industry.

Soon we were discussing with the chief administrator about their operations. He looked a bit worried. Other heart hospitals were coming up in the locality. Some of their patients were switching to their competitors. Many of their loyal patients stopped turning up. Some of their good doctors were leaving them. Profits were going down. And they wanted to boost their profits by opening similar facilities in other towns and nearby states. He wanted to know how we may help him keep their heads high and profits up.

It is at this point I asked, “Where are your research facilities?”

“Well, to be honest we dont have one”, he replied.

“But the name of your facility proclaims that so boldly”, I shot back with curiosity.

He looked blank, unsure of his response.

“Well that might just be the thing that you need to keep your heads high and profits up”, I quipped.

I think, one may choose to find out about anything. Whatever they find out would help them restrategize their business.

What is going wrong? How do they strategize? What else can they do? Any clue?

How to create an Incentive scheme to boost Self Organized Productivity?

The Issue

Creating an incentive plan or scheme in an organization is a tricky affair. Most don’t seem to get it right. As a result the desired goals are left unmet. So the top Management feels that they lost in the bargain. And surprisingly the employees also think the same that they have been unfairly treated or cheated by the scheme. Nonetheless it leaves behind a bitter taste that isolates Management from its most vital resource — the employees.

What is known or desired by Management?

However, the aims of any well-meant incentive plan is clear; some of those being —

a) Improve productivity through self organized improvement of efficiency and effectiveness of a production system.

b) Improve self managed quality as an inbuilt factor into any production system

c) Enables employees to quickly discover systemic faults in the production system and self correct those through self-initiated interactions.

What is Unknown by Management? 

a) Management does not yet have a model to work out an incentive plan/scheme that is not only systemic but also self organizing to improve the system.

b) Presently management looks at bits and pieces of data to create work wise incentive plan that is applicable to an individual or a group or a department at most. It does not know how to create an incentive plan that would map and address both interdependence of different departments and their independence too.

c) The same goes for correctly evaluating or assessing the contribution of different types and grades of employees who work in various departments.

d) Management is also unaware of the type of data to look for that would not only help them create the right type of incentive scheme but also keep the inherent dynamics of the system, where the central idea is to create a dynamic incentive plan that helps the production system to be resilient rather than a static one, which can prove to be quite anti-resilient and limiting.

What is needed? 

a) A clear understanding of the system dynamics.

b) The maximum and minimum potential of the system

c) What would be the stability zone to operate in and how to predict when instability sets in?

d) The inherent potential for the system to improve without any additional investment

e) The limit beyond which only additional investment can improve productivity.

f) The right parameters to be selected

The Resolution

The resolution to the above issue is depicted by the conceptual model as shown below:

incentive Plan
Incentive Model

Results

This model (based on science of complexity) was applied to one relatively large Indian multi-national unit and the results were the following:

1. Productivity improved by 1.75 times within 2 months of implementation of the scheme.

2. Self organized improvements took place

3. Real time communication increased between employees

4. Quality improved and sustained.

5. The improvements were self-sustaining without any other capital investment.

How the Heck we Cascade Strategies of a Balanced Score Card?

Note: This is a talk to be given by me at CII-SNCEL – 3rd National Seminar on Manufacturing Excellence 26th Sept 2012 at Kolkata.

How the Heck we Cascade Strategies of a Balanced Score Card?   

By Dibyendu De,

Director Reliability Management Consultant Pvt Ltd

And Chief Mentor of International Institute of Nemetics Foundation

Summary

We would discuss the groans and joys of cascading strategies developed in a Balanced Score Card down to the shop floor level in a manufacturing unit and examine the importance of the interface between Human and Technology to bring about changes, order and balance in an otherwise uncertain world. In other words how do we implement the strategies that would help an organization to survive and do better?

Why is this question so important?

It is important because we aren’t always quite sure about how to implement good strategies in reality. As of now a top-down approach is usually taken with employee ‘buy-in’ in mind. Hence we have a 3 tier approach to the traditional roll out usually accompanied by loud and clear drum rolls. The first of these tiers, i.e. Tier 1 is about framing the Balanced Score Card (BSC) by the top management.  This is followed by Tier 2 roll out where departmental and unit heads are involved, which then is finally handed down to the shop floor – Tier 3 usually not on a platter though always accompanied by a lot of anxiety and trepidation.

What is a Balanced Score Card (BSC)?

But before we delve any further let us have a working metaphor for BSC.  It is a dashboard. It is something like we have in an aircraft’s cockpit which is laid out with wonderful and often beautiful looking array of impressive instruments measuring all sorts of parameters and variables, while an aircraft is in flight. Such a dashboard informs a pilot whether everything is going on track and whether he/she would be able to achieve a given objective of safely flying hapless passengers to their desired destination. That is the good part. The bad part is that these same instruments also inform when something starts to go wrong so that the pilot can take corrective actions to maintain the safety of the aircraft and its passengers, which, fortunately,  in most cases they are able to do.

With this metaphor in mind it might be easy to understand as to why a firm’s strategy as outlined by a BSC has four fundamental components or building blocks, which are as follows:

a)      Financial Performance

b)      Internal Processes

c)       Learning and Growth

d)      Customers

Clearly all of them are interdependent on one another. The success of such interdependence as a whole would then determine the overall performance, productivity, profitability and future sustainability of the firm.

However, it might be fair to say that creating a strategy through BSC is relatively easier than cascading the strategy down to the shop floor for any measurable improvements to take place. Why is it so? This is because there are no clear cut defined strategies in place. But that is not an error or mistake. It is nearly impossible to think of any pre-defined strategies to take care of implementation. This is simply because of the complexity involved within the whole organization. Therefore, emerging strategies have to evolve. And these would be uniquely different in style, content and application from one strategic unit to the other. Even the implementation strategy for sister units might not be the same. That is precisely the challenge and the beauty of cascading or implementing the broad overall strategy formulated at the top management level.

It is easier to picture it like the famous Russian doll, Matryoshka, having strategies within strategies each with their own implementation plans. It goes without saying that it would not only involve a very liberal dose of applied creativity but also a non-linear process of sense making within the overall complexity of an organization and its various interfaces. Moreover, such measureable improvements must be done quickly enough so as to be reflected in the balance sheet and customer happiness.

Let us now see through some examples of how cascading takes place in real life in some manufacturing units. For want of time and space, I would take only one objective from each component of the overall top strategy of a BSC along with its specific measure and then illustrate the point through a live example, to demonstrate how that objective is effectively met to provide on-going benefit to a manufacturing organization. Perhaps it is not out of place to mention that in each of these cases I have been intimately engaged. That might have possibly left me wiser with a receding hairline that helps me to share such intimate moments with you all.

Financial Performance (the 1st Component)

Objective -> Cost Leadership (this appears to be a very common objective for most manufacturing organizations)

Specific Measure -> Unit cost

Case:

This is a case of a polyester yarn producing unit located in the eastern part of India. During the years following economic liberalization they were facing tough competition from the Chinese. While they were selling their yarn at Rs 112 a kg the Chinese competitors were happy selling the same quality of yarn at Rs 97 a kg.

To bring down the cost to a competitive level was a difficult proposition due to various factors the first of which was their complete dependency on import of raw material. Second was their inability to scale up operations owing to chronic fund crunch. Third was the cost of energy that went into the process. So this was a complex problem waiting to be resolved.

Clearly there weren’t any self evident solutions in sight. They would be forced to rely on their imports, pay the energy bills in time without being able to scale up owing to the prohibitive cost of technology that has to be obtained from Japan.

So what was done? They focussed on improving the plant reliability and upgrade their production capability within the given constraints.

With 24 failures in a month plant reliability was extremely poor. Such frequent stoppages also caused a lot of work in progress material loss with the consequent rise in energy cost apart from the poor productivity of the plant.

With this in mind they concentrated on improving plant reliability through the following means –

  1. Focus on the plant as a whole.
  2. Understand the ‘failures’ and the nature of the failures that were taking place.
  3. Implement small inexpensive design changes to improve both performance and reliability
  4. Implement integrated Condition Based Maintenance by taking a systems approach.
  5. Try to extract more production out of the given resources with the help of accelerated testing methods.
  6. To cascade the strategy it took them around 24 weeks (6 months) of intensive effort.

Results:

  1. They could produce 129% of their given capacity, which meant a total reduction of energy cost by around 20% apart from the increase in productivity by 29% using the same resources.
  2. 24 failures in a month were brought down to 1 failure in a year bringing down both energy cost and loss due to loss of work in progress material.
  3. Cost of imported spares brought down by more than 50%
  4. The improvements enabled them to sell their products at a rate of Rs 87/- per kg against the Chinese price of Rs 97/- per kg.
  5. And they could sustain the on-going benefits for the next five years.

 

Customer Perspective (the 2nd Component)

Objective -> Responsive Supply

Specific Measure -> On- time delivery (this also appears to be a persistent problem for many manufacturing firms).

Case:

With the opening up of markets in India a manufacturing company suddenly found themselves flush with orders, which was much more than what they really expected. As a result they began to fail in their deliver y commitment to their customers and in no time the delay in delivery grew exponentially to touch 725 days. This meant that the unit could only deliver the goods to the customer in 2 years. It was obvious that it wasn’t acceptable to the customer and if this continues the sudden opportunity for accelerated growth the company found themselves in would quickly evaporate.

Considering the cash flow and the company’s resources it was also not possible for the company and the unit to immediately build up on their existing infrastructure to match the demand.

Hence what was done instead was to look at the entire production process and initiate quick changes in the design of the production system, which fundamentally meant the following:

  1. Institute a ‘factory within factory’ concept. That meant produce different types of products in separate designated spaces instead of everything going together in one space. The amount of space given for each type of product depended both on the product volume and the expected growth in that market segment.
  2. Instead of measuring their throughput in terms of tonnage they started measuring the throughput in terms of order processed and adapted their processes according to the number of orders to be handled in a month and the committed delivery dates against each order.
  3. Always trying to find the shortest path to accomplish an order in the shortest possible time. The strategy was to combine flexibility and structure.
  4. It took them 6 months to implement the strategies to reorient their production systems.

Results:

  1. The delay in delivery was brought down from 725 days to only 17 days.
  2. The turnover of the company increased from a mere Rs 8 Crores (Rs 1 Cr is around $ 0.2 million) to over Rs 150 Crores in the next 5 years (i.e. over 15 fold increase) without any major capital investment to boost their infrastructure.
  3. The cost of production went down drastically and their profitability improved by over 50%.
  4. Now the company has grown to a size of Rs 1500 Crores in just under 12 years from the start of cascading the strategy.  It is now a legitimate Indian multi-national having their presence in 4 continents.

 

Internal Process Perspective (the 3rd Component)

Objective -> Manufacturing Excellence

Specific Measure -> Cycle Time, Yield, Quality etc..

Case

This is a case from a FMCG (Fast Moving Company Goods) company. The company had a strategy to increase their sales of shampoo. In order to do so they thought of penetrating the market of rural India and make its product available to the masses instead of concentrating in the cities for their turnover and survival. In order to do so they strategized to sell their shampoo in small sachets and sell those at Re 1/- per sachet. The idea was grand and it was rolled out from one of their strategic units in India.

For this they bought some expensive machines from Germany and Italy to run a pilot. Soon the pilot became quite successful and the demand for their product was growing by the day. In order to meet the rising demand they would have to quickly do something to boost their productivity and quality else the new found market would soon be taken over by their competitors who by that time have deployed similar strategies to tap into the large Indian rural market to ensure sustainability of their business. But they had a few problems in hand, which were the following:

  1. In order to meet the growing demand they would have to increase their productivity from their present level of 60 sachets per minute per machine to around 80 sachets per minute per machine.  But their present machines just would not allow that to happen. As soon as they wanted to step up the production rate the machines violently shook from a level of around 15 microns to 65 microns making it impossible to continue operation.
  2. This meant that they would have to augment their production system by adding 10 more new machines each of which would cost them a little over Rs 1 Crore (around $ 0.2 million). The return on investment on the additional Rs 10 Crore in 2 years time wasn’t working out. The additional problem was that such machines were neither designed nor built in India. So none had the expertise to help the company with a cheaper but more effective machine.
  3. In addition the wastage of material with the present process was around 8%. That was pushing up costs which was undesirable in the cost conscious business landscape the company wanted to grow in.
  4. Then there was another major issue. The sealing of the sachets was giving way under pressure which led to loss of material and customer complaints. Such losses occurred during transportation and during end use of the product.
  5. On top of all this there was an rigid labor issue. The contract with the labor union was to operate at the maximum designed rate of 60 sachets per min and not go beyond that. They would only agree to produce more than the agreed rate only if the company procured higher rated machines.

So, the problem as a whole seemed insurmountable. Moreover it appeared to be a problem that involved many disciplines like Quality, Maintenance, Production, Finance, Personnel etc. It was clear from some initial efforts that this complex problem cannot be addressed by the usual reductionist approach to solve problems.

Since the company was not making any headway they decided on the following strategy:

  1. Redesign the machine by not only keeping the functional objectives in mind but also find ways to address the present failures and problems to improve upon the situation.

Soon a completely new design was drawn up and local vendors were engaged to build the machine. Initially one machine was built to test out how it works.

Results:

  1. The machine effortlessly produced 80 sachets a min. That meant an increase in productivity and energy conservation.
  2. The vibration level at the enhanced rate of production was only 6 microns way below the previous level of 65 microns.
  3. Material loss reduced from 8% to less than 1% helping them achieve cost effectiveness.
  4. The sealing problem vanished.
  5. More importantly the machine could be designed and built at Rs 7 Lacs, which was less than 1/10 the cost of an imported piece of machinery.
  6. However, the more important point was that workers cooperated in the production process as promised. The production process was re-designed accordingly.
  7. The company achieved its given strategy by installing 10 such new machines at the cost of 1 imported machine giving them an ROI in less than a year’s time.
  8. The company continues to enjoy the on-going benefits till date.

 

Learning and Growth Perspective (the 4th Component)

Objective -> Manufacturing Learning (a vital but often overlooked fact in manufacturing units)

Specific Measure -> Time to design a new product and quickly bring it to market

I think Product Design and Development would soon become a very important aspect for Indian companies in as our focus on manufacturing keeps growing if we are to keep up with other competing nations in the manufacturing sector.

The usual reason of not being able to keep up with the desired pace of creating and bringing in new products in the market that is cited and felt is the lack of adequate manpower – those who might be exclusively dedicated to this purpose since all manufacturing units try their best to operate on minimum possible manpower taking cost into consideration.

However, we would see in the following case how this problem can be cleverly addressed without much strain on manpower or budgets. This is indeed a true leading indicator of strategy that would help any manufacturing organization to be in good stead as learning within the organization grows.

Case

An Indian MNC felt the need of quickly developing a few new products and also improve upon their existing products to suit changing requirement of the market and also to face competition. However, for reasons as cited above, the company was in a fix as to how this issue might be properly addressed to increase their haul of patents to help them penetrate new markets and grab a part of the market share from their competitors.

What was done?

  1. Every year students in their third year of engineering go for internship by being attached to some company doing real work. This was the opportunity that was exploited. Five to six good students from a good engineering college were carefully selected or handpicked through an innovative process making them eligible for a paid internship with the company to work upon new product development and improving design of existing products.
  2. The new interns are given a liberal dose on how design improvements are done and how new designs are created. This was  supported by live examples with hands on understanding. They are then given a firsthand experience of the applications and the manufacturing processes that produce the product. This is followed by presentation of the design problems.
  3. The interns work on these problems for around 2 months with minimum guidance (based on the principle of self organized learning) to bring their concepts to the prototype stage before they return to their college for their academic sessions. Their designs are then subjected to rigorous tests including field tests. If it passes the tests the product is given the finishing touches to form the final shape.
  4. Once through, the new products are rapidly introduced in the market.
  5. The time taken to complete such a process is around 3 to 6 months.

Result:

  1. This method has now been tested over the last 5 years. In this short span the company has been able to obtain 12 new patents in international markets and many of their existing designs were upgraded.
  2. With a slew of new or upgraded products backing them, the company has been able to make inroads into markets which were thought to be impenetrable at one point of time thereby making their presence felt in existing markets which helped them to flourish and create a ‘niche’.
  3. It has proven to be extremely cost effective. However to step up on the proven success the next natural course of action would be to go for more open innovation.

Lessons Learned and Conclusions:

  1. Cascading the strategies of a Balanced Score Card is often difficult and at times confusing. The primary reason for this is not the lack of management focus or lack of employee ‘buy in’ as usually thought. The difficulty of cascading lies in the difference in the perspective we take on improvement and cascading strategies.  The usual perspective is the linear perspective. We think that cause and effect are directly linked for anything we would like to improve upon. Unfortunately that is not the case. The world of manufacturing is a highly complex system that necessarily calls for a different type of skill set to negotiate the given non-linearity within this complexity.
  2. In most cases of improvement initiatives, we focus on changing people’s ‘behaviour’ through some methodology. My experience has shown that such a perception hardly works or to tell the truth has not worked at all. The trick is to focus on either changing the behaviour of products or machines or technology or focus on ‘failures’, which then changes the collective consciousness of the organization to create good hard value that sustains the organization in the long run. This as I find is a proven and effective route to change human behaviour for the better. It also makes their job and life easier and effective leaving human beings to do what they do best – that is focus on exceptions rather than focus on periodicity.
  3. In every case that we discussed was focussed on any or all of the following: a) Productivity b) Performance c) Profitability. However, the spin offs are of no lesser importance, which are a) Energy conservation b) Material conservation  c) Cost effectiveness d) Sustainability. It helps the society and our planet at large.  And in every case the underlying focus has continued to remain on ‘failures’. So ‘failures’ and their nature inform both strategy and its cascading to create value. The principle that is involved is ‘model failures’ not ‘systems’.
  4. Lastly, there is no ‘one hat that fits all’. Every case as I have tried to show is unique in its own context. What works in one situation might not work at all in other situations, however similar they might appear. Therefore, strategies, innovations and implementation plans are to be worked out based on the emerging context a manufacturing organization operates in. Only some clever thinking would not do. Only some brilliant ‘doing’ would not do either. The difference lies in thinking and doing things differently and contextually. This is the only difference that creates the essential difference in performance. It calls for contextual intelligence which when developed to a collective level is simply unstoppable.

Let us create the difference that creates the difference in our lives. So much depends on us to build a sustainable future for the next seven generations.  And the best thing is we don’t need a big theory to create that essential difference since we live in a non-linear world that calls for creative non-linear approach. We call this a Nemetic approach to life. And it works. We as Nemeticians assert this claim with evidence based confidence.

Note: It does not really matter whether we improve through BSC or Business Case or Business Plan since the principles of long lasting changes and improvement remain exactly the same. The principles of Nemetics employed to improve any situation goes beyond all changing terminologies, which are often called fads. Surprisingly, the same principles can be employed in Design, Health, Education and a host of things.

References:

a) Research notes of the Institute

b) Discussion notes with Gautum Dhar, Mgr, TMKPL on pitfalls of cascading BSC.

The author wishes to thank Mr Fabian Szulanski for encapsulating the Nemetic idea through his slogan ‘Don’t Model Systems; Model Failures instead’

The author, Dibyendu De, might be contacted over email – dde337@gmail.com

Problems, Landscapes, Habits; Leadership in the 21st Century

Excerpts from forthcoming book ‘Dancing on Peaks; Resolving Wicked Problems – A Nemetical View of Life

……

Fortunately, not all problems that we face in life are wicked. For most of these, though relatively few, we can get over them with our effort and practice. And we can do that so well indeed that they don’t seem like a problem any more. Like for instance, my getting to my desk, booting up my laptop, connecting it to the net and then letting my fingers fly over the keyboard at great speed to write this book is a simple problem. Though years back it took me some time and effort to master the process today it is effortlessly simple and predictable. But I remember my first brush with the computer, which was over two decades back and those were tense moments. It took me hours and some training to figure out MS-DOS and hours of brutal typing practice with some coaching from a friend. Resolution of such problems doesn’t require much thought. These can be easily mastered through controlled and dedicated effort guided by mentors if possible. The solution to such problems are known and are easily available. These I call the “library type of problem”. The operating context is predictable. It is something similar to mastering maths. A teacher or mentor is available and the answers are at the back of the book. We can refer to such ‘library type problems’ as problems of ‘flat landscape‘ since it is akin to walking in the park. Such problems can be easily mastered through the ‘habit of memory’.

Then there are problems that are slightly different to ‘library’ problems. It might be something like this – how can I get from my house to my office (10 km) in the shortest possible time and expense without sacrificing comfort. Given the information, such type of problems are straightforward problems. The problem opens up choices and a fairly intelligent choice has to be made. However, the result is always not guaranteed. Sometimes things can go wrong and we can be thrown off our desired intention. Such straight problems are fairly easy to tackle. And with some experience these can be tackled quite well. Hence I call these ‘experience type of problems. Such problems can be framed like – how to climb Mount Everest safely. There is one particular objective to be achieved. Once that can be done the problem no longer exists. More the experience better are the choices we can make and better can be the associated planning. And with better choices, planning and action the targeted outcome is achieved easily. Adopting best practices in the field also helps a practitioner. Hence such ‘experience problems‘ are problems of ‘single peak landscape‘. Such problems can be mastered through the ‘habit of planning and making choices‘.

Then there is a third type of problem which is continuous in time. We achieve something and then prevailing situation demands that we achieve something more. It is like scaling a mountain range, like the Himalayan range, which is full of peaks. We climb one peak and then we try to climb the next peak and then figure out how to reach the next. Sometimes we can get from one peak to the other peak quite easily, if they are nearby with a reliable connection between them. At other times we might have to take a detour, climb down from a peak and then scale up another. In real life this might resemble improving productivity or opening up new markets in a closed economy. While the economic environment doesn’t change much we strive to become better and better from our existing position. These are not very easy problems to resolve. It is similar to a cricketer who excels playing at local level and then aspires to excel playing his game at regional level before trying to move up and play at the national level. This is where complex problems start to surface. It would need enhanced cognitive skills, a basic level of contextual intelligence, ability to learn from mistakes, strategizing, refining intentions, better decision-making skills, emotional balance and continuous moment to moment adaptation without losing a sense of direction over long periods of time. Such type of complex problems may be termed as problems of ‘Rugged Peaks landscape‘. Such type of problems can be mastered through the ‘habit of time and learning‘.

However there is a fourth type of problem that needs constant adaptation in a complex environment. Such systems are called Complex Adaptive Systems. And the problems in this category can be seen as ‘adaptive type of problem’. Continuing our analogy of the ‘rugged peak’ problems, let us imagine for a moment that the ground below us continuously dances and also gives away at time. So the peaks, which were rather stationary in the previous case now start having different heights at different points of time. The peak that appears small suddenly grows big and the bigger peak suddenly drawfs in relation to the peak we are presently on. Nothing remains constant in both Space and Time. These are real ‘wicked‘ problems. Everything is dynamic leaving us clueless about both position and the rate of change (velocity) at any given instant. It might be better to call them the problems of ‘Dancing Peak landscape’.

In this book we would focus specifically on such problems. Such problems need a high degree of contextual intelligence, where previous experience would hardly be of any use. Sharp cognitive skills would be needed that would call for taking various perspectives at different levels along with a high ability to reflect, ability for deep understanding, instant strategy, quick actions and strong adaptation skills. This type of problem can’t be easily tackled by the habits of ‘memory’, ‘planning’, ‘making choices’, or by habits of ‘time’ and ‘learning’. Taking on such types of problems would need the habit of ‘practice of preparedness, attention and serendipity’, that is the habit of a ‘prepared attentive mind’ moving from moment to moment in time. This in Nemetics we call as ‘attentive contextual intelligence’, which is a mix of collective intelligence, combined with feelings, intuition, rationale and intelligence of an individual.

Finding such problems is not difficult. Actually such problems occupy most of our lives; problems for which we don’t have the answers and can’t predict when such type of problems would surface. And they are dynamic in nature. Slight changes in global economy throw national economies out of gear. It affects business operations, which must quickly adapt in order to survive. Customers change. Markets go topsy-turvy. Profitability goes under tremendous squeeze and the notions and targets of productivity and performance change continuously. Job markets fluctuate. Nature of jobs are redefined. Personal lives get affected. Even Nature gets affected. Climate changes. Plants and animals get affected. It then appears that we are caught in a deep and frightening whirlpool.

Under such situations, there are no answers at the back of the book. There are hardly any choices to quickly select from. There is no question of optimization. Experience hardly helps. Dedicated hard work might prove useless. Agility and resilience might have no real meaning. There is only one answer but we are left clueless. There are no best practices to follow, no techniques to use, no process to adopt, no framework to guide our minds. We either get it or we don’t. If we get it wrong we are doomed to be sucked into the whirlpool even deeper till we suffocate to death. If we get it right we live to see another day and perhaps another new moon. However, the only wherewithal we might have to rely on is the quality of our feelings and thinking brought together through the habit of ‘practice and serendipity’ or simply having a ‘prepared attentive mind’ since the need is to adapt moment to moment. Or simply stated, our contextual intelligence can come to our rescue to maintain balance.

In order to develop and apply such contextual intelligence to wicked problems operating in a ‘dancing peak’ landscape, Nemetics is an option. Nemetics is a flexible thought model that allows us to synthesize mathematical thinking, subjective insights and feelings to re-design our lives for the better. The objective of the flexible thought model is to make sense of complex adaptive systems and to act upon them. It may be effectively applied to various fields like organizations, manufacturing systems, engineering, organizational sociology, economics, design, system design, system reliability and even to psychology and a host of others fields.

In short Nemetics can be best described as a study of origins of the various complex phenomena within which we exist. Or in other words it is the ontological inquiry in general that seeks the transcendental truths operating behind everyday phenomenon.

This practice of Nemetics stems from the fundamentals of complexity science as applied to complex adaptive systems and is based on the time-tested principles of Engineering, Chaos, Complexity Science and humanities like social and economic systems.

Since the aim of Nemetics is to gain direct knowledge of the transcendental the fundamental premise is praxis for the simple reason that the theory of such complex emergence (a term which we shall deal with later) simply might not exist. It has to be worked out. The idea is to move from practice to theory and then to practice again.

In other words we first explain the situation, then act upon it and then only predict the outcome as a way of reflecting on our thought process and our decisions. We do so through attentive reflection. It is a practice to train the eye and mind to be prepared and attentive to spot emergence, engage with its structure and behavior, mull about the drivers that drive complexity and then exchange that helps to adapt to complexity.

Life is then in perpetual beta – no hanging on to assumptions, beliefs and opinions. That points to adopting a stance of nuanced but effective adaptation based on ‘attentive contextual intelligence’. It is a tall order, which asks us to do what is needed to be done and then keep adapting and tweaking as time goes on and situations change.

That is what Leadership of the 21st Century would look like. Problem solving would grow lesser in importance. Problem solvers would be passe. Problem and paradox resolution would take prominence. And persons who can resolve complex problems and have the ability to predict in the short-term would be highly regarded and would be in high demand. That can only be done by people who can gain direct knowledge of transcendental truths through their highly developed contextual intelligence. They with their highly trained minds would be simply priceless!

Summary:

  1. Types of Problems: Library problems, Experience Problems, Complex Problems, Complex Adaptive Problems.
  2. Types of Landscapes: Flat, Single Peak, Rugged, Dancing Peaks
  3. Habits: Time, Planning & Making Choices, Time & Learning, Attentive Contextual Intelligence
  4. It is not unusual to find combinations of ‘Type of Problems’, Landscapes and Habits co-existing within the same situation.
  5. Whole of life is nothing but a series of changes and issues waiting for resolution, facilitation, modification and nurturing to leverage us to new dimensions and states.
  6. Leaders of the 21st century would posses an unusually high degree of ‘contextual intelligence’ to reach essence of complex situations in a wink and know how to deal with those.