The resilient organisation

The concept of resilience, essentially the capacity to adjust, is a useful one in considering organisational change and indeed survival.

Resilience is a very different concept from the popular focus on risk management. In risk management we try to identify and manage specific risks. Risk management aims to make things more secure in an uncertain world. By contrast, resilience deals with the capacity to adjust to change whether foreseen or not.

All organisations are complex systems constantly adjusting to a changing world. If change out-runs the capacity of the organisation to respond, then the whole system may collapse. One problem here is that complexity makes the adjustment process itself complex and difficult to see. A second problem lies in what I see as the growing rigidity of modern organisations.

A few years ago I was running a planning workshop for a major organisation. Those present suggested that their organisation's IT system had become a barrier to change and growth. Leading edge in its day, there was now a growing gap between the IT system and the organisation's changing business needs.

The problem faced by those in the room lay in the fact that the IT system was absolutely central to company operations. Its replacement would be disruptive as well as very expensive. So for the present at least, they had to find ways of working round the problem.

This is an example of an identified rigidity. The problem is at least known. Others are less recognised.

In Problems of redundancy and systemic failure I suggested that there was a growing disconnect between modern organisational structures with their focus on measurement and the way people actually worked. In Systemic Rigidities in Modern Management 1 - Setting the Scene I extended my argument with a generalised public sector case study. Then in End of the IT revolution - organisational rigidity I extended the argument further looking at features of organisational IT systems.

There is nothing especially profound in these posts. However, they all deal with often un-recognised hardening of organisational arteries that work to reduce organisational resilience.

As I write this post, the Australian airline Qantas has been experiencing a series of equipment and maintenance problems. This is an airline recognised for its effective management and high safety standards. However, it is also an airline that has gone through a constant business change and cost cutting process.

The airline's profit performance has been outstanding by global standards. Now, for the first time, people are asking whether the changes within the airline have reached the point that they are creating systemic failures.

Postscript

After writing this post, I did a web search on resilient organisation. Quite clearly, the concept itself is a popular one!

Postscript 2

The Australian Civil Aviation Authority has released the report of its inquiry into Qantas's maintenance standards. While praising the airlines willingness to cooperate, CASA concludes that the airline is now falling behind its own maintenance benchmarks, recommending a range of corrective actions.

Management Perspectives - most popular posts 1

Looking at the last 100 visits on this blog, the five most popular posts have been:

• The Importance of Demography and Demographic Change - update
• Australia's new minimum wage - July 2008
• Common Management Problems Series 1 - managing up
• Global Demographic Trends - Asia
• The Balance of Payments, Australia and the sub-prime crisis

End of the IT revolution - organisational rigidity

In my last post, I posed the question Have we come to the end of the IT revolution? Now this really should be a rhetorical question.

Over the last weekend I was a speaker at the 2008 conference of the Australian Federation of Intellectual Property Attorneys or FICPI. There Peter Williams from Deloitte Digital set out cogent reasons why the internet should provide a base for a continuing IT revolution. Despite this, I am sceptical.

In this post I want to look at some of the institutional rigidities that have emerged in modern organisations that work to prevent gains from the internet. Then in the following post I will look at some of Peter's arguments as to just what might be possible if those rigidities could be overcome.

Consider the modern organisation. It is likely to have the following features:

1. A web site used to promote the organisation and its services or products. This may include password protected areas to allow staff and possibly customers to access services and facilities.
2. An intranet used to give staff and in some case customers access to key information. As much as possible, this will be used for specific internal functions to reduce load and costs. As a simple example, as many HR functions as possible will be worked through the intranet.
3. Great dependence on email to communicate within the organisation and between the organisation and its customers, suppliers and other stakeholders.

It is also likely to have the following features:

1. A central IT department that attempts to control the whole process.
2. Rigid rules governing what can and cannot be put on the web site and intranet, along with formalised content approval processes.
3. Rules governing use of email. This may include limits on the size of attachments, as well as the number of adressees.
4. Rules governing what can and cannot be loaded to specific computers, along with approval processes.
5. Monitoring systems to track traffic and to identify improper use.

Now I understand all the reasons why these features exist. However, in combination they have become a real drag on the effective application of new technology.

The problem here lies not so much in the rules, but in the way that they are applied. A further problem lies in the focus on cost cutting as compared to performance improvement. The type of problems that can arise include:

1. It takes so long to get new content up that people no longer bother.
2. Individual authors who want to do new things cannot access the necessary knowledge because no one is responsible for making it available.
3. Experimentation becomes impossible because the hurdles that have to be jumped to do so are just too high.
4. Required internet access crashes because of things like spam filtering devices that give you an error messages.

The net effect in many organisations I know is that the new technology, and especially the internet, becomes something to be controlled rather than managed.

Have we come to the end of the IT revolution?

Over on my personal blog, Bob Quiggan and I have been discussing Kondratiev cycles. Those who are interested can find the posts here, here and here.

One of the issues that arose in the discussion is whether or not we have come to the end of the IT revolution. Bob thinks no, I am beginning to think yes.

In saying this, I am not saying that technological improvement will stop, nor am I saying that there are not further productivity gains to be had. Rather, I think that we have come to the end of the easy gains.

When I look at the organisations I know, I am hard pressed to see real IT gains over the last few years. Here I am referring to business improvement and productivity gains, not changes to technology itself.

My gut judgement is that current organisational forms and management styles work against further gains.

The first round of the IT revolution gave great processing gains. To go beyond this point, we need to change organisational structures, and I cannot see this happening.

Am I wrong? I would be interested in comments.

Management Perspectives - most visited post

Every so often, I look at the most visited posts to get a guide to visitor interest.

Looking at the most recent list, Australia's new minimum wage - July 2008 was by far the highest scorer, followed by The Importance of Demography and Demographic Change - update.

This post scores consistently well. The impact of aging populations on recruitment is becoming an increasingly popular topic, in part because organisations are now feeling the impact of reduced numbers in the traditional entry level age cohorts.

Still on demography,Global Demographic Trends - Asia came in at number four, Global Demographic Trends - A few macro numbers at five, both just behind Common Management Problems Series 1 - managing up. This post scored well in part because it is an entry post to a series.

Number six was Changes in Public Administration and their Impact on the Development of Public Policy 1 - Introduction, followed by Project Management for Professionals - Introduction. Looking at this post I realised that I had still to add in the series linkages.

If things aren't wrong, don't try to fix them

I suppose that it is an occupational hazard for consultants (and new senior managers too) that we want to fix things up, to improve them. Sometimes this is a very bad thing.

Some organisations face real problems and require radical action. However, most organisations rub along. Here action to improve things can in fact make them worse, unless the initial diagnostic has been properly carried out.

Then there are organisations that are in fact working well. In these cases, the desire to improve can lead to disaster by disrupting the very things that have made the organisation a success.

Part of the problem here is that organisations are quite complex animals. This can make it very difficult to understand the relationships between all the elements making up the organisation.

We live in a measurement world. Yet many of the most important elements in organisations such as its culture are "soft", not easily quantifiable. A focus just on those things that can be measured may disrupt those that cannot.

A further problem is that both managers and consultants are prone to the influence of fashion. We can see this in the way that management language changes over time. Concepts rise and then fall.

Management fashions can contain worthwhile ideas. However, too often they are not based on hard analysis but on subjective judgements. If implemented without thought, they may have adverse effects or even destroy the organisation itself.

I do not have a solution to this, beyond the need to exercise a degree of caution.

Guide to job seekers - Ronnie Anne's Work Coach Cafe

I have continued to enjoy Ronnie Anne's Work Coach Cafe. This is a seriously good blog for those seeking to switch jobs. It also provides me with a wealth of material for my various comments on management issues and problems.

Common Management Problems - combined posts

Back in November 2006 I began a series of short posts on common management problems that I had encountered as a manager or professional adviser.

I have just been updating the list. Those interested can find the entry page to the whole series here.

Australia's new minimum wage - July 2008

Some employers are crying foul over the $A21.66 increase in Australia's minimum wage, bringing the minimum weekly wage to $A543.78. I cannot agree.

Very few Australians are on the minimum wage. Those that are would be hard pressed to rent accommodation in the private market place plus pay for food.

Australia used to have the concept of the basic wage. As originally envisaged, this was meant to be the amount that a family with a single wage earner could live on. Pretty obviously, $543.78 is a long way removed from the concept of a basic wage.

Employers are worried that the increase in the minimum wage will flow on to those higher up the change. This is a legitimate worry. However, it has to be put in perspective.

The gap between the bottom and the top has been widening. If Australia cannot afford to pay its lowest income earners a wage that will allow them to at least survive in minimum comfort, then we have a real social problem.

I would argue that we need to look at a new approach that will allow all Australians to share to some degree in our growth. Without this, we are a pretty poor society.

Reasons for slow posting

I have been struggling to find the time to post. I have therefore decided to draw a line under the past and instead aim to keep up with current posting.