Replacing Efficiency with Reliability

Coop-oriented thinker Bob Cannell discusses some of the ideas of our friend Roberto Verzola:

“So what should we be looking for as our guiding light in an age of redundancy and low/no cost production. Roberto Verzola, at the International Conference on the Commons, Berlin, Oct 31 – Nov 2, 2010, says it is reliability.

He says that in an age of abundance (of information, data, relationships, networking) what people now want is reliability. He says we live in a new age of information ‘commons’. Unlike old style grazing grounds our e-commons cannot be degrade by over grazing (although Nobel prize winner Elinor Ostrom showed that the ‘tragedy of the commons’ was a fabrication if commons based economies were left to find an equilibrium). The more these new data commons are used the stronger and more sustainable they become.

Reliability means customers get what they actually want, when they want it and whenever they want it. Personal service, at their convenience, predictably for an indefinite future.

The law of requisute variety says that the onlt way to ensure this complexity of demand is satisfied is to use a systems controller of equal complexity, human minds. Any IT system must be less complex (the human mind is the most complex thing in the known universe).

Wasteful processes are often more sustainable because they are, like natural processes, more diverse. ‘Duplication’ that horror word for old style business process engineers, can actually be a good if it ensures there are alternative channels for production if the main one ‘goes down’.

Many 1990s management studies highlighted the importance of social capital in maintaining sustainable business processes. The implicit knowledge actioned by participants in their organic relationships with colleagues, without thinking, that keep business processes running. For example, Jenny just knows that if Johnny is on holiday she had better check that Jilly knows about Jackie’s foibles in how she wants her order. You can’t keep track of the complexity of those kind of relationships. Implicit knowledge cannot be ‘surfaced’ and written down, Many attempts at doing so have failed.

These elements of the complexity of human thought and behaviour can only be practiced, they cannot be prefigured and designed. But we can design dehumanising production lines.

This is why business process re-engineering was such a disaster with 80% of BPR initiatives resulting in decreased performance, because it destroyed the social relationships and social capital that kept old ‘inefficient’ processes running. BPR is fine for production line drones but not for any creative customer facing business. In that you need the complexity of human behaviour to meet the complexity of human behaviour from customers.

In an age of redundancy and ever faster change, production lines are too slow to change. We must rely more on duplication and redundant behaviour to find new and better ways of doing work. Even work which is resource costly.

For example a warehouse collating orders for customers. It can be designed so that order pickers just do as they are told brutally efficiently. But what the customer wants is the best fit with their current requirements. A brutally efficient operation delivers what the customer thought they wanted when they placed the order. It is conceivable to have the order pickers wired up with real time stock levels for different products, new ‘just in stock’ products, and with access to the latest CRM information for specific customers, in real time communication with customers and collating their order in collaboration with the customer.

Undoubtedly many suggestions would be redundant but this active relationship marketing could generate far higher sales than the production line of ‘old information’ order fulfillment of today.

What would you do if the Amazon order picker rang you up on your mobile as you were on your way to work and said, I can give you your favourite author’s new book at 50% off because I’m about to pick his old book to fulfill your order and the new one is in the next bin and did you know this author likes that music and you might like it too. This is already done by Amazon of course using IT intelligence at the ordering stage (when it is easy to ignore). Many other businesses could do it using humans, a vastly more complex tool than any software.

But the core of this argument is that prefigurative , simplifying, predictive, set, business processes are no longer fit for purpose, even in normal business, that is, outside of information reproduction enterprise.

Business which are class based, with controllers and controlled, are less likely to be able to adapt to this new redundant work style. “

1 Comment Replacing Efficiency with Reliability

  1. AvatarLori

    Just today I placed an order over at Abe Books, for two copies of a book. It would have been neat to have the capability to have two shipping addresses for one order, but nobody thinks of everything, at least beforehand. There was a text area for ‘instructions to seller.’ I was tempted to try that route, but figured that would trigger a cascade of events like being called on the phone by the seller, questions about the machine-parseability of the address typed into the text area, wondering whether adjustments of shipping charges would have to be made and OK’d. Since the intended recipient is local, I think I’ll just hand deliver it. A ‘consultant’ might think up something like ‘why not relate “ship to” to “items” rather than to “orders,”‘ but would that also trip up some customers? We might never know.

    Perhaps a reduce-reuse-recycle culture can alleviate some of the inefficiency of reliability. A close cousin of reliability is durability.

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