Why the Hypes were FadsHigh Reliability Theory as an Explanation

> Gerd Van Den Eede (VLEKHO Business School)> Bartel Van de Walle (Tilburg University)

Newark, October 12th 2007

Agenda

1. Objectives of our contribution2. Do not look where the light is3. High Reliability Theory

a. Descriptionb. Five Principles

4. Five popular management paradigms against the light of HRTa. BPRb. KMc. TQMd. MATRIXe. HRM

Objectives

We want to find out why management themes did not – or only in part – fulfill their promises:- Matrix Management- Knowledge Management- Business Process Reengineering- Total Quality Management- Human Resources Management

We want to point out that in time most management practices create their own nemesis

We will deduct why this is the case by relying on insights from High Reliability Theory (Rochlin, La Porte, and Roberts 1987) and by inclusion on constructs from:- Loose Coupling Theory (Orton and Weick 1990)- Sensemaking Theory (Weick 1995)- Practical Drift (Snook 2002)

Do not look where the light is• Stronger than Contingency Theory• Foster Paradox• Design and behavioral characteristics that are robust – in the

sense of reliable and flexible enough – to allow for an ‘all-seasons’ approach to organizational performance.

Don’t look where the light is

Think like an economist Equilibriums are dynamic

Acknowledge, even embrace, complexity Don’t act as if the future is foreseeable

Don’t deal with the extra-ordinary in an extra-ordinary way Don’t over-rely on rationalistic decision making

Don’t cut too much fat Don’t make a univocal interpretation of coupling

Think like an economist

• Organization models tend to disregard the fundamentals of economics, more particularly the fact that everything comes at a cost and that economics is about balancing revenues and their corresponding costs.

• The optimal situation emerges where marginal revenues equal marginal costs (MR = MC).

Equilibriums are dynamic

• There is an implicit organization equation that drives managers and consultants; by which they see organizations as a static equilibrium.

• Modern management paradigms usually deal with static views. They talk about ‘alignment’ and need ‘re-organizations’ combined with ‘change management’ initiatives to make the organization face new challenges.

• Revolution is hardly ever the best scenario because it takes energy, time and money, because it causes frustration and destroys variety.

Acknowledge, even embrace, complexity

• Complexity should not be embraced but reduced.• Management initiatives often are built around the destruction of

complexity.• At he same time complexity is overestimated. It is easily stated

that everything is complex, whereas in reality it is not.• Strangely enough, the opposite is also true: far too often

complexity is underestimated in the sense that the system dynamics is not acknowledged.

Don’t act as if the future is foreseeable

• Often, organizations are designed from an implicit worldview that the future is – at least to a certain extent – foreseeable.

• Again, even if lip services are paid to its ‘unpredictability’ or ‘volatility’, designers continue to align an uncertain future with a more or less certain present.

• They do so by designing standard operating procedures and they attach an almost sacral importance to them: Procedures are holy – deviation from procedure is bad, regardless of the context.

Don’t deal with the extra-ordinary in an extra-ordinary way

• System’s design does not incorporate dealing with crises. Crises are seen as exceptional circumstances which management is kept outside of the system.

• System’s design should be the other way round: take the exceptional as a starting point and build everything else around it.

• When facing the extra-ordinary one cannot expect system users to shift to other tools, interfaces, accompanying procedures etc. (See e.g. Threat rigidity, HCI)

Courtesy: Murray Turoff

Don’t over-rely on rationalistic decision making

• Don’t over-rely on rationalistic decision making and man as homo economicus.

• In reality, people do not make decisions the hard way, they make sense out of a situation.

Don’t cut too much fat

• Redundancy is a two-sided cutting sword.

- Redundancy is good (because it creates back-up)

- But too much redundancy is dangerous (because the defense mechanisms might interrelate, hence endangering the complete system)

• Our research focuses on the composition of this ‘reliability cocktail’. There seems to be a need for studies that underpin such interactions (Pearson and Mitroff 1993).

Don’t make a univocal interpretation of coupling

• Organizations are shifted between extreme stances of either tight or loose coupling.- Tight coupling by means of procedures, structure, control…- Loose coupling by means of slack, redundancy, trust…

• Both coupling types have benefits:- Tight coupling efficiency- Loose coupling effectiveness

• What a dialectical interpretation of Loose Coupling theory has to offer is that the interplay between loose and tight is valuable in explaining organizational success in terms of a combination of efficiency and effectiveness.

• It does so by alternating tight and loose coupling, by compensating what is tight by what is loose (and vice-versa)

High Reliability Theory (HRT)

If the answer to the question is many thousands of times the organization is highly reliable

Examples:

nuclear power plants, aircraft carriers, air traffic control, emergency services, army, SWIFT, Nissan, Railways, BP, Shell

“How often could this organization have failed with dramatic consequences?”

Five Principles

High Reliability Organizations are attentive to failures, simplifications, operations, resilience, and distributed expertise.

These five principles can be thought of as hard-won lessons in the continuing “struggle for alertness” that high reliability organizations face every day.

Karl E. Weick & Kathleen M. Sutcliffe, “Managing the Unexpected,” Jossey-Bass, 2001

Principle 1: Preoccupation with Failure

Worry chronically that analytic errors are embedded in ongoing activities and that unexpected failure modes and limitations of foresight may amplify those analytic errors.

Assume that each day will be a bad day and act accordingly. But this is not an easy state to sustain, particularly when the thing about which one is uneasy has either not happened, or has happened a long time ago, and perhaps to another organization”

Institutionalize disappointment: “to constantly entertain the thought that we have missed something.”

(Reason, 1997).

Principle 2: Reluctance to simplify

Ordinary organizations have to ignore most of what they see in order to get work done. The crucial issue is whether their simplified diagnoses force them to ignore key sources of unexpected difficulties.

Mindful of the importance of this tradeoff, systems with higher reliability restrain their temptations to simplify.

They do so through such means as diverse checks and balances, adversarial reviews, and cultivation of multiple perspectives.

Principle 3: Sensitivity to operations

Pay close attention to operations. Everyone, no matter what his or her level, values organizing to maintain situational awareness.

Resources are deployed so that people can see what is happening, can comprehend what it means, and can project into the near future what these understandings predict will happen.

Principle 4: Cultivation of resilience

Not only try to anticipate trouble spots, but the higher reliability systems also pay close attention to their capability to improvise and act without knowing in advance what will happen.

HROs spend time improving their capacity to do a quick study, to develop swift trust, to engage in just-in-time learning, to simulate mentally, and to work with fragments of potentially relevant past experience.

Principle 5: Deference to Expertise

Willingness to organize around expertise

Let decisions “migrate” to those with the expertise to make them

Adherence to rigid hierarchies is loosened, especially during high tempo periods, so that there is a better matching of experience with problems

Business Process ReengineeringProblem Type BPR HRO

MR ≠ MC The leaner, the better Not too much, nor too little redundancy

Static Equilibrium Business/ICT alignment

Five-Year plans

Reliability as a dynamic non-event

Complexity Reduction Workflow, uniformity enhancing

Plan A, Plan B

Foreseeable future No deviation from procedure

Deviation from procedure

Separate Systems ERP, DSS, EIS… Incident Command System

Over-relying on ratio Rationalistic Sensemaking

Too much fat cutting Erasing middle management

Empowering middle management

Univocal Coupling No degrees of freedom Controlled degrees of freedom

Matrix ManagementProblem Type MATRIX HRO

MR ≠ MC Effectiveness is important, but so is Efficiency

Static Equilibrium One kind of rigidity is replaced by another type of rigidity

Bureaucratic Collegial

changing styles in situations where this is more convenient

Complexity Reduction Specialization Big picture and specialization

Foreseeable future But complex A mixture of complex and complicated or simple.

Separate Systems Separation from standing organization

Remaining part of the standing organization

Over-relying on ratio

Too much fat cutting Redundancy reduction and gaining of time

Slack’ & ‘safe areas’

Univocal Coupling Rigid structure Deference to expertise

Knowledge ManagementProblem Type KM HRO

MR ≠ MC More data, information, knowledge… is better

Sometimes, less is more

Static Equilibrium Lessons learned Lessons observed

Complexity Reduction Analysis Synthesis

Foreseeable future Designer’s perspective User’s perspective

Separate Systems Intranet, extranet, databases

KMS as a basis. Other applications built on top.

Over-relying on ratio Explicit knowledge Rational decision making and intuition

Too much fat cutting Idle time is no knowledge time

multiple instances and opportunities for shared information (discussions)

Univocal Coupling Standardized communication

Varied communication

Total Quality ManagementProblem Type TQM HRO

MR ≠ MC Centralization or Decentralization

Centralization and Decentralization

Static Equilibrium Reliability is static

Going concern

Preoccupation with failure and business as usual

Complexity Reduction Analytical perspective Holistic perspective

Foreseeable future If there is no procedure for it, it doesn’t exist

Commitment to resilience but people remain people

Separate Systems TQM is part of Management TQM equals Management

Over-relying on ratio Root cause analysis Out of the box analysis

Too much fat cutting Specialization Big picture - shared mental models

Univocal Coupling Procedures are alpha and omega

Improvisation of procedures must be allowed

Human Resources ManagementProblem Type HRM HRO

MR ≠ MC

Static Equilibrium

Complexity Reduction KPIs

Inflow uniformity

Reluctance to simplify

Requisite variety

Foreseeable future

Separate Systems Single-layered: structure or attitudes or basic assumptions

Multi-layered: structure and attitudes and basic assumptions

Over-relying on ratio

Too much fat cutting

Univocal Coupling Trust or control Trust and control

Conclusion

Mainstream Organization Theory could benefit from HRT insights

Essential is the abandoning of and/and combined with an embracing of and/or.