Harvard Business Review: “Embracing Complexity”

By: Frank Buytendijk, chief marketing officer

Be Informed helps organizations embrace complexity, this has been our mission since the beginning. We’ve even using the same term, “embrace complexity”. In essence, fighting complexity is useless, it is a natural phenomenon. Harvard Business Review (HBR), the world’s most influential management magazine, acknowledges that and chose “managing complex organizations” as its theme in its September 2011 issue.

Here we highlight some of the statements in the HBR articles, and add our experience.

HBR: “Managing a business today is fundamentally different than it was just 30 years ago. The most profound difference is the level of complexity people have to cope with”

This trend is particularly visible in business operations. Compliance regulations, a wide variation of customer requirements and shorter product and strategy life-cycles make that administrative professionals and other knowledge workers can’t rely on conventional wisdom anymore. Mass customized products and processes have become the norm. Analyst firms such as Forrester and Gartner estimate the market for more unstructured and knowledge-intensive business processes to be 2-4 bigger than traditional structured business processes.

HBR: “It’s harder to place bets, because the past behavior of a complex system may not predict its future behavior”

We believe business processes and IT should work  more “above the line”. This means that business logic is not embedded in custom code and business applications, but is stored in a so-called meta model. Once the rules of the games change, or you’d like to change the rules, this can be done without affecting the IT systems, it requires only changes in the model. This way you can still invest in a long-term IT architecture, but keep your options open, as the business keeps changing all the time.

HBR: “It’s easy to confuse the merely complicated with the genuinely complex.”

Here we have a different point of view. HBR defines complicated as a situation with many moving parts, but predictable patterns, like flying an airplane. Complexity, however, describes systems in which the interactions continuously changing. The same starting conditions may result in different outcomes. We’d rather see a more practical definition. We see complexity as a natural phenomenon, that organizations need to deal with. There are many moving parts, they can change all the time, or all of a sudden new moving parts emerge. Complicatedness, however, represents how you deal with that complexity in your organization. For instance, governance, business operations and systems may be complicated. Complicatedness can be reduced, in order to embrace complexity. For more information, go to www.beinformed.com/whitepapers and www.beinformed.com/takethetest.

HBR: “In a complex environment, even small decisions can have unintended consequences. […] It is very difficult, if not impossible, for an individual decision maker to see an entire complex system. […] Limit or even eliminate the need for accurate predictions.”

We couldn’t agree more. We believe strategy formulation (or policy-making) and execution should be a continuous closed loop. Before making any strategic decision, the consequences should be clear. Simulation is a powerful tool for doing that. And these decisions should not be made in isolation, but a collaborative processes, involving multiple people and disciplines. We also don’t believe in “sticking to the plan”, we opt for “sticking to reality”. If you have business operations that can quickly follow any changes in the environment, there is less need to accurate predictions.

HBR: “Take a real-options approach”

Our research has shown that real-options thinking is not very well-known in the business world. But it should be, and we all know examples. For instance, a service oriented architecture is a real-options strategy: you invest in keeping your future options of use open. Be Informed is based on real-options: business processes are derived on the spot, and are based on the unique characteristics of every case. And once you change the rules, the system changes with it immediately.

HBR also publishes an interview with Legg Mason’s chief investment strategist, Michael Maubossin. He argues that in complex adaptive environments, we don’t really know how things are going to unfold, so it’s difficult to make forecasts or budgets going many years into the future. He refers to another HBR article, called “Strategy as Simple Rules” (2001), that recommends creating a set of decision rules that are clear to everyone, and that describe what the organization stands for. “Then you pretty much let people decide on the fly in the field what they think makes sense given what they see, without violating the rules.”

We couldn’t have said it better ourselves. The Be Informed business process platform is designed to do just that. And our customers tell us it works. They typically save more than 30% in their cost of operations, more than 60% on their system’s TCO and up to 90% in their cost of change. How? By letting go the idea of fully predefined and prebuilt processes, but allowing administrative professionals to organize their work based on how they see fit, based on the customer conversation they have, or the specifics of the case at hand. Without breaking any rules. Would you like to know more? Contact us.

Read more:

• Learning to Live with Complexity
• Smart Rules: Six Ways to Get People to Solve Problems Without You
• Embracing Complexity

You will only see if you get it

By: Dick van Mersbergen

All meeting rooms at the Be Informed headquarters are named after famous philosophers. Large posters explain how they relate to our product and company. The second philosopher I came across is Ludwig Wittgenstein. His quote:“Logic takes case of itself; all we have to do is to look and see how it does it.”

The poster reads: “At Be Informed, our approach is more logical. We look at the goal of the process and then simply and logically work our way back to what is needed to successfully complete transactions towards that goal.”

Like every sports-minded Dutchman, the combination of the wordslogic andgoal made me think of the most famous Dutch footballer: Johan Cruijff. He is not just dazzled defenders with his football skills; his pseudo philosophical comments and weird twists of old saying had the same effect on people. Completely unaware of this, Cruijff ends every cryptic sentence with: “…it’s logical.”

In 1983, Cruijff joined long-term rival Feyenoord. During the first training session they played a 4-2 rondo on a small square pitch (see figure 1). Black has possession of the ball and the two in the middle (orange) have to conquer it. An easy game, played in during training sessions everywhere.

The Master immediately said: “Stop! You do it all wrong.” The other players replied: “But we play this game for years and it works fine. What’s the problem?” Cruijff explained that when the 4 players are in the corners, they limit their space. There are just two good passes possible (the orange arrows), as the pass through the middle is likely to be intercepted. There is hardly room for improvement, for example when X1 and X3 move will not change a thing.

So the others asked: “Well, this might be, but how to play it right?” Cruijff said: you need to stand halfway along the sides (see figure 2). Then, when moving, X1, X2 and X3 will create space and give the player with the ball more options. Even the pass through the middle will be OK because the defenders will be forced to leave this space more open.

At first, the others of the Feyenoord squad were sceptical. But they tried it and it worked really well. They understood and adapted the new playing style. So by simply turning the players’ square 45 degrees and introducing a new vision, a whole new game was created. Cruijff did not change the rules, he gave the players a new perspective. To use an other famous Cruyff quote “You will only see if you get it” (Je gaat het pas zien als je het doorhebt). This is actually the title of a management book on Cruijff and leadership.

And there is a link with our company as well. At Be Informed, we looked at the way business processes were automated and we said: “Wait, is this really the best way to do things?”. Instead of playing the same game over and over again, we introduced a new goal-oriented approach and created a completely new -and winning- game in the world of Business Process Management.

By the way, in the 1983-1984 season Feyenoord went on to win the Dutch leaguefor the first time in 10 years. It’s logical.

Sun Tzu: Check and mate.

By: Dick van Mersbergen

In one of the meeting rooms at Be Informed I came across a famous quote by Sun Tzu:

Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.

As a vivid (but not very strong) chess player, I study strategy and tactics. So I grinned and nodded - every chess player knows that Sun Tzu was right.

Besides, working at Be Informed, I am interested in computers and artificial intelligence. So Sun Tzu’s quote also made me think of the link between Be Informed and chess computers. The two proved to be very similar.

A short history of chess computers
The first chess machine was constructed by Wolfgang von Kempelen in 1770 to impress Hapsburg Empress Maria Theresa. It was called The Turk, after the mechanical Turk that executed the moves on the chess table. The machine travelled Europe and beat strong players and even Napoleon in 1809. Soon after that, the machine was unveiled as a hoax. In the small chamber underneath a master player was hidden, he made moves via a ingenious array of mechanics.

The David Levy bet
As soon as computers appeared, programmers tried to make it play chess. In the 1970s and 1980s many thought no chess program would ever be able to defeat a top human player. In 1968, International Master David Levy bet that no chess computer would be beat him within ten years. He won this by beating Chess 4.7 (the strongest computer at the time) in 1978, but admitted that it would not be long before he would be surpassed. He was right: in 1989, Levy was defeated by Deep Thought.

Deep blue
Turning point was the 1996 match between IBM's Deep Blue and Gary Kasparov (one of the strongest chess players of all time), where the latter lost his first game to a computer. But Kasparov regrouped to win three and draw two of the remaining five games of the match, for a convincing victory. In May 1997, an updated version of Deep Blue defeated Kasparov 3½-2½ in the rematch. Note that athough the Cold War was long over, this was still a match of Russia vs the USA. A new era began: chess programs had overtaken human players.

How did computers become unbeatable at chess?
The first study on the subject was published in 1950 by Claude Shannon, long before anyone had programmed a computer to play chess. He predicted two possible search methods that would be used and labeled them Type A and Type B. Type A programs would use a brutal force: exame every possible position for a fixed number of moves. Shannon thought this would not suffice, because:

• the computer would be to slow. With about thirty moves possible in a typical position, looking just 3 moves ahead for both sides would take about 16 minutes(!), even in the very optimistic case that the chess computer evaluated a million positions per second.
• it ignored the problem of quiescence. When only calculating a number of moves deep, you never know if there is a move later on that refutes the combination.

So it was clear Type A needed improvements. Shannon already suggested that Type B programs would be improved by:

• only looking at good moves for each position
• using quiescence searches.

What is a good move?
Programmers worked on these improvements for years, but the problem is that it is very hard for a program being to decide which moves are good enough to be worthy of consideration. Chess players rely on their ability to recognize patterns and on their intuition. Because computers don’t have an intuition and don’t have a strategy, this proved to be counterproductive.

Quiscence: look for stability as a goal
Instead of imitating human thought processes and knowledge it turned out that computers need to do what they are best at: calculate. But they needed to understand what to calculate. Not having to check all possibilities, modern chess programs look for steady positions and the ways to get there; just these are evaluated. This was the key to world domination.

The Be Informed approach
Similar to chess computers, traditional business applications are very good at Processing, but very weak at Management. This is where Business Process Management goes wrong. The BPM suppliers at first used brutal force to deal with the zillion possibilities, then tried to improve that by making the software to think like humans.

As with chess programs it is better to define goals instead of define and manage all possible paths. This is exactly what Be Informed did: the knowledge models within Be Informed let the application work towards goals and look for the paths itself. Be Informed gave BMP its quiescence search.

So where chess programmers found that it was useless imitating a chess player, we at Be Informed don’t want our business process platform to imitate the knowledge worker. We want it to free the knowledge worker. Let’s make them both do what they do best: calculate and and decide what is good respectively.

Being a chess player I can truely sum up Sun Tzu’s view with the pleasing words: Check and mate.

The mantra is dead, long live the mantra!

By: Dick van Mersbergen

In a recent blog entry, Peter Evans-Greenwood gives his view on the current shift in business process management. His analysis matches the basis of the Be Informed philosophy.

Since Frederick Taylor’s time we’ve considered business vast machines to be improved. His mantra: Define tasks and then fit men to the task. By reducing inefficiencies you will be able to optimize you business and eventually you will have the perfect organization. Driven by this mentality we automated processes. At first small repetitive tasks, later on the interactions between these tasks, resulting in full-blown Business Process Management (BPM) applications. We dreamt of a single technology platform which will allow us to program our entire business: business operating platforms. This seemed to good to be true. And it proved to be.

The first problem is that programming is the automation of the known. Business processes, however, are the management and anticipation of the unknown. A business is not a computer. Secondly, the world of business is becoming unstable. In the past instability occurred as a transition between two stable states, but this time business seems not to settle into a new groove. The instability we’re seeing is here to stay: the only remaining constant is instability itself. The environment we operate keeps changing, pushing us to become externally focused, rather than internally focused.

It is clear we’ve reached Taylorism’s use-by date: his mantra no longer works. So what do we replace the Taylor’s mantra with?

There has been some steps in the right direction, with the emergence of Adaptive Case Management (ACM) -or Dynamic Case Management (DCM) as we call it- being the most obvious one. When the process is triggered (for example by an online application, a phone call, whatever), a knowledge worker creates a case and starts building a context by pulling data in and triggering small workflows or business processes to seek out data and resolve problems. At some stage the context will be complete, the exception resolved, and the final action is triggered. Using DCM, your business is goal oriented, flexible and keeps adapting to its complex and ever changing environment.

The mantra is dead, long live the mantra: Identify the goal and assemble the team to achieve the goal.

Systems versus The Real World

By: Frank Buytendijk, chief marketing officer

This morning I bought a train ticket at the machine. The procedure was aborted by the machine: “Unusable Card” it said. Unusable? I had just bought a sandwich with it, and it was quite usable yesterday too, thank you very much. The machine should have said “I am terribly sorry for failing in the single task I am actually supposed to do, but I can’t seem to read your card”.

As the mother of all ironies, when I was sharing my frustration about the machine with someone on the phone, we got disconnected. A metallic voice told me “Your call has been completed.” Excuse me? My call wasn’t completed at all, it was terminated. That is what the voice should have said.

Both examples are typical results of engineering thinking, reasoning from within the system. Everything outside of the rules of the system is seen as an anomaly, a.k.a. the real world. As much attention is being paid to user interfaces and interaction, if the designers live within the confines of their own systems, instead of in the world of the users, they will create silly responses that annoy users, and reduce users to operators of the system. The purpose of the system is the use, not the system itself.

Focusing on what is happening in the real world is one of the most important characteristics of Be Informed. The business rules that drive the system’s are completely transparent, as part of a metamodel. They are not locked into the system at all. And with Be Informed you don’t completely predefine the processes it needs to support. All you do is define the boundaries of the possible activities a user could do. Within those boundaries, users are completely free to use the system in the way they see fit. There is no predefined order of steps, and the system is simply there to help you find the shortest and best way to complete the transaction. This idea is called dynamic case management. Building a system with Be Informed is not about application development, it is not more (and less) than business engineering. Engineering as it should be, putting the user and his or her reality first.

Medieval Best Practices

By: Frank Buytendijk, chief marketing officer

Medieval Best Practices is the first article of already the third series of articles on strategy, philosophy and analytics. I am arguing that many of the discussions we are having around the right approach towards business intelligence, data warehousing and so forth are purely dogmatic of nature.

In Part II, I elaborate on what advice the philosophers in the Age of Enlightenment would have had for us. They would have urged us to think for ourselves, and not blindly adopt best practices. The enlightenment view feels remarkably fresh, as these were the days people truly believed in technological advancement, much like our generation.

Part III then continues criticizing the Age of Enlightenment, that is the basis of most of our thinking in business: decision theory. Decision theory assumes human beings to take rational decisions, and new insights in behavorial economy question that assumption.

In short, I feel that best practices are the solutions to yesterday's problems.

Show them how it works

By: Rik Hoogenberg, chief executive officer

Change programs don’t often meet with a favourable atmosphere. Why? Because all too often, change programs haven’t worked. I am convinced that the vast majority of professionals within organizations are motivated and willing to deliver their best performance. But if IT support falls short, they get frustrated. And if even change programs to improve IT support fail, they lose interest.

That is why it is essential to demonstrate as soon as possible, that change works. Usually it is enough to show what others have done with Be Informed - it's amazing how similar problems businesses and government institutions face. Sometimes more is needed. At Be Informed, we are able to tackle the toughest and most intractable problem and within a few days up to several weeks we show how the solution works in practice. Not as a demo, but as an actual working system.

To do this, we work with dedicated specialists of the organization to understand the basics of the organization and it’s processes, in order to find the best possible solution. Shifting from a “no, it is very complex, it hardly can be done” towards a “we will solve it” state of mind. Once the core solution is up and running, the promise of change that works has been proven and other professionals can be involved for optimization. It is our experience that people don’t need to be convinced to contribute to it. Once they see the core solution at work, they will get inspired to be a part of it. Success sells itself.

Several Be Informed implementations have taught us that the key inspiration of a running application within such a short period of time was that the Be Informed business process platform restores the role of professionals within knowledge intensive administrative organizations. No longer will they be forced to adjust inadequate process results, Be Informed empowers them to add value to effective and efficient business processes. And this perspective initiates their collective dedication to the change program. This way, not only the Be Informed powered solutions add to the success of administrative organizations, but also the way in which they are implemented contributes to a mind shift within the organization.