(This is a short version of the full post: The Value of Failure)
After centuries of Tayloristic command and control management approaches, adaptive concepts are finally being considered in the business world. Tim Harford wrote in ‘Adapt: Why Success Always Starts with Failure’ that we can’t rely on expert advice, command economies, and top-down organizational structures when human endeavors exceed a certain complexity. It is an illusion to expect to be able to anticipate and plan for all consequences of decisions taken. Complexity doesn’t allow predictability and therefore hinders planned improvements. Innovation is only found in environments that support variation through experimentation on a small scale in randomized trials. Selection of successes is achieved through competition and diverse feedback.
Enter Adaptive Case Management
My own life experiences are the reason that I turned a scientific perspective into the business and software concept that is today at the core of our software solutions. Today I can use the example of the Apple Appstore social network as a vivid and verifiable proof of the success-through-failure approach. It provides an ecosystem of autonomous innovators who thrive through the power of evolution. The best apps will succeed, while many won’t. Steve Jobs himself failed multiple times until he succeeded. Thomas Edison invented 6000 failures to finally discover a usable light bulb. Both are well documented history. While a guiding vision is certainly essential, one has to be willing to admit failure, learn from it and try again, and again, and again …
Quite obviously, wanting innovation is not just inventing new successful things, but much rather a focus on customer value. Innovation does and must happen continuously on all levels, in the small and in the large, while not all innovations will succeed. Tom Watson Jr. supposedly said, “If you want to succeed faster, double your failure rate.” As an executive you have to allow and even promote the opportunity to fail, which is diametrically opposed to perfect business processes as demanded by BPM or SixSigma.
James March pointed to the importance of exploration and exploitation of knowledge in organizations in 1991. But how do you fail fast and ensure that the newly gained knowledge isn’t lost? Nobody likes to share his failures, right? That is why the concept of Adaptive Case Management offers a radical departure from the perfectly-optimized-process illusions. ACM enables large organizations to fail and innovate faster by ensuring that gained knowledge becomes transparent and reusable without needing a bureaucracy. The ability to ADAPT (change future process execution through learning by doing) is very different to Ad-Hoc or Dynamic processes.
A process optimization bureaucracy of any kind (i.e. BPM, Six Sigma or Lean) might ensure cost cutting but it will not support, promote or provide true knowledge-from-failure innovation. Perfect and cheap processes designed by an outside consultant are stale and dead. Yes, code-freeze kills the germs of infectious innovation! Giving the process owner authority to pursue assigned goals any way he wants as long as he achieves outcomes, operational targets and handovers is the kind of social empowerment needed for success.
Autonomy is further a key element in employee (and thus customer) satisfation. Allow for a variety of processes and tasks to fail or succeed until the best ones sustain. For effectiveness you need to allow processes to be improved by the people who perform them. That is additionally the most natural and efficient approach to optimization. Governance should at most define the high-level Business Architecture and ontology to reduce ambiguity but not nail down low-level processes. As I posted recently: “Let’s face it, orthodox process flowcharting won’t survive the social and mobile revolution.” I am going to stick with that prediction.
Outside manufacturing, we deal with a business complexity and speed of change that makes it near impossible to tell others exactly what to do. It is ridiculous that predictive analytics promote statistical correlation as causal decision points for processes. Knowledge workers improve outcomes through emotional inspiration and not Boolean if/then/else logic. We need to trust their skill. They listen to customers, translate goals into needed activities, and then execute based on their intuition and experience.
Yes, many people in large organizations don’t care about outcomes because they are jaded by bureaucracy. And now we punish and mistrust them for our failure as executives to empower them? How will a rigid flowchart allow for innovation and make them less jaded? Yes, your people need understandable and documented objectives, targets and goals, but then authority, autonomy and means will be the only thing that takes them from careless to caring. ACM is therefore not about cost cutting but about empowering people to deliver value to their customers and make doing so transparent to management.
Soichiro Honda said: “Success represents the ONE percent of your work that results from the 99 percent that is called failure.”