The dark side of management
When I designed BPM Conference Portugal together with Rumos, I setup as a guiding principle that each year the event agenda should have a theme, like an orientating guide, and such theme should provide guidance for the session agenda that unfold into innovative talks. The presentations delivered by the speakers should help managers to make a reflexion about the future of their organisations and what and how needs to be implemented to tackle their challenges. At the same time, the content of the sessions should be based on experience, not in years to date reading hours about books and magazines you can buy about the theme.
2015 edition is oriented towards the M letter of the BPM, Management. Initially I had reluctance in putting such a stamp in next years event. Some of the reasons it made me not going forward with such a theme are related with the fact that it’s a mature, worn out, tired and tiering and because today everything is about the future of technology and how it turns and twist operations and our lives.
Nevertheless, management is important and it is forgotten. It’s forgotten, because managers are distracted looking into scorecards, to running process instances, trying to match agreed performance with customers. The art of management it is spoiled, ruined and rotten because such capillary approach (day to day shotgun management) deceives and shifts attention to define a vision of the future (that sometimes can last 3 short months only) innovation and make change happen. Under other perspective, I heard many professionals advocating what it should be pursued is real value chain management, aligning strategy, operations and execution, sparking new change initiatives, Business Process Management is called, instead of Process Management. Confused? So do I and I am a BPM addict, now imagine the poor Manager considering of adopting a BPM initiative in his organisation. This year, I attended a session during a conference, on Center of Excellence styles and organisation structure and how it shaped the practice of BPM. This should be a very interesting theme, once thought the act of proper governance, it is supposed to achieve the so called holist BPM these professionals are referring to. Unfortunately, not a single example was provided (not even organisational structure proposals). It was so vague and dry (despite the presentation was a spin off of documented academic research) that anyone did not understood what a center of excellence does and how it should be organised (yes, a size does not fit all).
Hence what it is left to talk about? Everything.
This year I decided to read Nassim Taleb’s Black Swan, after reading the latest book, anti-fragile. I was looking to search some answer shy decision makers make bad decisions and let companies perish, being overtaken by competition ou fail a new technological wave. I can say to you that I did not found any information to answer my questions, in a way that make me search for more (the book, in the Portuguese translation have 456 pages). The only interesting aspect I found interesting is a simplified version of how knowledge diffuses (in page 127). Still I prefer my version <link> that goes well beyond how knowledge is built and spreads. Regarding this theme you can read my book chapter based on a real world case study <link>.
During all this years I always questioned why managers make bad decisions and fail to adapt a correct change strategy. Many can think this all about how a change idea is sold to the board of management or how a return on investment is pitched (totally different that those studies full on fallacies on ROI). Based on my experience both as a consultant, as an entrepreneur, I witnessed managers to whom, it was presented, clearly in a crystal clear quantified way, how to avoid millions in losses and still the manager did not make a decision, to the point it let the organisation record the losses in the accounting journal entries as it was propelled by the newspapers. Again, why this kind of outcomes happen?
Some years ago, I was involved defining risk management frameworks in industries like oil & gas and airport management. The objective was construct a model for risk assessment and mitigation that was aligned with the value chain operation reality of those enterprises instead of a simplified version of probability versus impact (now you understand why I was so keen to read the black swan).
In one of the industries, the method to calculate risk included a manual correction of the calculated values, in a way that jeopardises any kind of mathematical formula and judgement. It drives crazy the ones that use carbon copy methods for years, also called professionally verified the correction (or distortion if you are not familiar with the concept) was to change the final vale of the evaluation,managed on operational tacit knowledge. For example the risk assessment team knew that some events were not registered (because people were hiding it) they automatically aggravate the risk value. The simple fact that those records were not in any spreadsheet, pirate database or system, make the corporate risk members (yes governance frameworks exists with this purpose) angry (that was the consequence of being as the operational called them, the lads of the office). In other example, if there was a crash between a vehicle an a tank, but that scenario never occurred, the risk value was typically low, even if the proportions of the impact were catastrophic. Under such circumstances, additional preventive measures were out into force, adulterating coercively the risk value. This is something that the ones that like precise formulas fight and argue (with very bad results by the reasons exposed).
In the book black swan, too much is written about the gauss curves used to measure probability. I assume that the book author was exposed many times to the curves, like radiation that entered in “peroxidation “. There is an interesting example to explore about the probabilities models. The accident at the nuclear station in Fucoshima in Japan. This example was also explore in the books Thinking fast and slow, as also the signal and the noise. Many authors state that the cause of the accident was negligence of the ones that designed the system. According to the experts, the nuclear station was build to hold an 8 scale earthquake measured on the Ristcher scale. Once that the probability of existence of an earthquake higher than 8 was very low (on thin particular aspect I am brothers in arms with Mr. Nassim) it happened what everybody knows. Still, there is an important aspect about this episode. The Ristcher scale erroneous ends in 10 (it is not a point scale) meaning that an earthquake of 12, it is still a 10 earthquake (the scale has no limit, but the maximum value it can be measured is 10, like when you drive in a descendent highway and the velocity of the vehicle is higher than what the dashboard instrument can measure). In this regard, I leave an important question to the referred book authors: how to build a nuclear station able to handle such extreme earthquake? To close this reflection, I would like to leave an important pointer: do or do not the Japanese have a long tradition and knowledge constructing buildings that deal with earthquakes (since those fancy oak villas with dynamic dumpers). Hence, again, I think that the issue is more related to an extreme event that we are not prepared to handle (just to remember how small we are embedded in Mother Nature).
These are some pointers only. Why we make sob bad decisions? Why we don’t change, when change is necessary? Why we put our customers filling forms and firms just to send a traceable letter when with a smart ID card it was possible to pour all the data into the form? Why some airports only offer 30 minutes of free internet assess, on a time were mass customisation is the trend? I hope you could find the answers in next edition of BPM Conference Portugal, because this will be the kind of sessions the distinguished speakers will deliver.