Introducing bufferts and slack in organisational processes

Typically when estimating how long a task will take for a project you see managers multiplying the estimate with some factor. This leads to estimates inflating like a balloon. Estimation is however typically done based on a deficient understanding of the problem. The effort put into estimation is further limited, typically to just something that can be measured best in minutes for tasks taking days.  Surprises and new circumstances arise as work is done. I would  however argue that these additions to the time a task will take is not necessarily linear in nature, as the multiplication of effort estimates would assume.

Perhaps an alternative way of inflating estimates would be to apply an exponent to the initial effort, but this will mean even bigger estimates that will not be easy to sell. This would be better if the distribution of delay as compared to initial effort estimations are exponential in nature. This may still not reflect the true nature of problems with estimates. Could applying a random unlimited exponent to estimates produce a value better reflecting the true nature? Perhaps the conclusion is that random values would be the best, as you save the effort of estimating over all... Work however exhibit the behaviour that it takes as long or longer than estimated. People tend to use the time allocated to the full extent. Padding processes and estimations slows down everything and waste time as a result.

Another alternative is to not inflate the estimated duration of single tasks, but add a buffer for the entire whole of all tasks to  be performed as a part of what is done. Each task overrunning its initial estimate can then use a fraction of this buffer. The remaining buffer would then give a good estimate of what the state of the over all project. When your buffer is going to zero, you know that your project is in trouble.

When organisations mandate that the utilisation of people processing work is kept very high any delay will have a severe impact. Full utilisation in a non deterministic system will mean that everything grinds to a halt. For an entirely deterministic system full utilisation can be seen as efficient, but entirely deterministic systems are rare and if the demand exceed the capacity also a deterministic system will cause delays. According to the Universal Scalability Law adding a node (person or machine) to process some work can degrade the overall performance of the system as a whole, due to coordination costs between nodes.  

Failure demand is also seldom included into the model used for estimating work. Depending of your circumstances some things will need to be done to correct mistakes, misunderstandings, communication gaps, variation related issues and systematic errors that may occur with the outcome of the work. When failure demand is high all predictability will anyway be close to none. Addressing failure demand can be a first step to reach some form of predictability, but failure demand will never go away completely and time must always be allocated to addressing issues. Reducing failure demand, especially in terms of common causes arising from the attributes of the system can in the long run free up some time, but require an investment in terms of work, further increasing the workload momentarily.

Time buffers are clearly needed whenever you have tasks performed by people. So what if the individual person has time to take a pause, as long as the system over all run smoothly?  Efficiency of the individual steps in a process or of the individual doing the work does not mean that the process overall is running efficiently. Efficiency of the overall process is dependent on that each node has the bandwidth to address needs as they arise. At high individual utilisation this is impossible.

Curing organisational incompetence

Organisational incompetence was defined in the 1990:s by J. Steven Ott and Jay M. Shafritz  an inability of an organisation to learn from its success, failures, or its environment (see https://www.jstor.org/stable/977385). Predating that in the 1980:s Chris Argyris used the term skilled incompetence to describe something related, where the repeated use of a behaviour results in unintended consequences as described in an HBR article (https://hbr.org/1986/09/skilled-incompetence).

Today we still see a lack of critical thinking when applying best practices, rules and procedures. Although best practices has a valid application when dealing with clear or obvious problems there is an inability of organisation to limit the applicability of the practice. In dealing with complicated problems the use of a best practice can be questionable. With what certainty can anybody say that the practice is the best possible? In the complex domain, where the cause and effect can only be seen in retrospect, the use of anything like a best practice is going to produce a suboptimal result. The same goes for problems in the complex and disordered domain as the result of an intervention may be all over the place. 

Most organisations fail to recognize this limitation to best practises. In stead organisations reward and promote individuals following the rules, applying the best practices and who does not criticise the entrenched behaviour. Individuals also them self opt for this behaviour, as it is risk free, comfortable and does not need any extra effort. As a result organisations are likely to end up with managers having limited skills in critical thinking. What is worse is that this can be a negative spiral and the situation become worse over time.

Mostly the result of any organisational incompetence is just waste of time, money and effort that can be considered as normal. On a society level this waste amounts to astronomical amounts, but to the individual organisations it is just the cost of doing business. Some times things do blow up, as exemplified by huge overruns in terms of cost or schedule. The outcome may also be dysfunction in what the organisation produce. There is also risk for organisations being affected by organisational incompetence that is worth noting. Organisations may end up living in a dream world where all is well according to the norms, but in reality they are headed for disaster that they fail to see. Required business transformation may also fail as a result of the inertia existing norms.

To solve the problem a first step  should be to recognize there is a problem. Many people are highlighting that there is new thinking required but few listen. Organisations also must ensure that any issues can be brought forward without risk of repercussion. Psychological safety is a crucial a precondition. Once the problem is recognised and safety is ensured, a sense of curiosity towards all existing practises should be encouraged. According to my understanding this is what Toyota does with its philosophy around the use of the andon cord. The leadership of an organisation finally need to make sure to enable change. More diversity in leadership is one thing that may help. The diversity should also include diversity of thought in addition to what is traditionally considered in diversity. Traditional MBA and other management training does not seem to produce any favourable outcome in this respect.

As people slowly are starting to recognize the problem also the media is starting to apply pressure towards organisations affected by organisational incompetence. The recent episode of Dystopia from Swedish Radio (https://sr.se/avsnitt/1742863 in Swedish) highlights this in an excellent way that i would recommend anyone with a basic understanding of Swedish to listen to...