All entries for March 2011

March 31, 2011

To manage assets, you must manage knowledge.

I stumbled across one of the major links between knowledge and asset management today. It might sound really obvious, but assets generate information! To effectively manage assets, be they property, machines, people, etc, you need to have a way of dealing with the flows of important information surrounding them, and of converting that into knowledge that is useful, and an aid to your decision-making processes. This is where the Knowledge Management comes in.

It's not just that you're managing assets based on knowledge and theory (which you should be anyway of course - theory is the basis for action), it's that the assets themselves need continuous monitoring/maintenance/support and all of this generates information that must be handled appropriately for effective use later. For example, for a single component of a machine you own, you must: record the decision-making process that led to purchase, the cost, market and book value, likely depreciation values, how often it needs maintaining, what kind of maintenance is required, its productivity, etc. Now, if you scale that up, that needs to be repeated for every machine you have. In every factory you own... that's a LOT of information, and this is just one small area of asset management!

Even then, as we have previously discussed, that's a small part of the battle. It's fair to assume that you require more than just one person's input in your asset management. If you had a small operation and you didn't, life might be a little easier. But, assuming you do, because the operation is big and there is too much for one person to consider, then you have fresh problems, because it is no longer just about making sure the information is collected and occasionally used; no, you have to get past communication barriers. And we know that while this isn't too tough with explicit information, it's much tougher with tacit information. Even with just two people managing all assets, an incredibly high level of communication would be required for effectiveness, and with every extra person involved in the process, it becomes even harder to sustain!

And yet it is vital that you do have a lot of people involved, or else, you completely lose access to the huge volumes of tacit information within them, as well as their buy-in and consequent compliance or interest in 'your' (not 'their'/'the company's') asset management policies.

So it appears this is the challenge: Knowledge and Assets are inextricably linked in this way, and you need to manage both effectively to succeed. Wow... good luck to us all... no wonder KBAM seems so big!


March 29, 2011

It feels different this time…

Group work for the KBAM project has begun... and it is daunting. Asset management is HUGE! Knowledge management is also a vast topic, but I haven't quite got there yet ;-) Of course, we know that this is like a PMA; with 40 hours each (so, 200 as a group), you can only go to a certain level of depth. It is clear though, that you could easily make a full-time job out of any of the aspects we have discussed briefly today.

As for the task itself, well I think I have a bit of a Leadership hangover. Volunteering for leadership of this task may prove to be a great decision, it may prove to be a bad one if I can't cope with everything and let the team down. That is unlikely - I think I am stronger than that, but something about this module feels different to previous ones. I don't know what it is. Perhaps the positional power that comes with the task, and has my team members looking to me for direction (which I like), or perhaps it's the extra responsibility I feel for the overall outcomes that we have to deliver in a few weeks (which I also like, and in fact, I thrive on). Perhaps it is the fact that the scope of the task is just so much greater than anything else we have come across on this journey to critical autonomy. By the way, with this task, and how most of us have dealt with such an open-ended, real-life parallel, situation, it is clear that we are well on our way to having developed this responsibility. I'm reminded of what Paul told us yesterday - last year, this is where the students found everything coming together.

So far, it is going well. We have discussed the background of our company, and almost all of us have now directed ourselves to areas of interest, for further work. We have briefed each other on our achievements, and we seem to have developed a good working structure - I think this will be of great benefit to us as time elapses. I'm relaltively pleased with my role in that so far - I learned a lot from LE, and am trying to put it into practice. I've made a point of planning our time, short and long-term, and I've done my best to make sure everyone understands what we have to do (vision), and is happy about how we are going about it, through asserting my timings, but giving everyone the freedom to work in a way that is best for them. 

I am also really pleased with our team - it is solid, we have a good work-ethic, and I already feel confident that we will be pleased with the effort we've put in, and the results we've achieved, when the time comes to self-assess.

One thing I have really been trying to push is our wiki-usage. I think, this task, there is no way we can be successful without excellent knowledge management of our own. There is just too much information to handle otherwise. And the irony of the challenge is not lost on me; we only have to communicate and keep control of this vast amount of information for three weeks. Real organisations have to do it for as long as they plan to operate... and there is a lot more at stake there too!


March 26, 2011

I have a problem, and I'm relieved!

It has been a tough week. My house is undergoing renovation (I don't currently have a working kitchen or functioning bathroom). I am ill (it's a pretty devastating case of man-flu :P). My girlfriend is away. I didn't get to see my brother for his birthday.

Still... all that pales in comparison to the stress that my project has been giving me lately! But, the bright side is that it is starting to pay off. I'm getting very close to being able to define my work properly. That in itself has been a long, drawn-out, frustrating process, that has resulted in me getting far behind my colleagues. It's not that I haven't been looking, I just couldn't find a problem that REALLY grabbed hold of me until this week. The question you have to ask yourself is what can keep you interested for 900 hours? Well, maybe I've been too picky, and it's surely resulted in me being behind on other work, but I feel like it was a necessary and worthwhile sacrifice.

So, what will my project be about? Essentially, we live in a world full of social and environmental problems, and in many ways, we have lost our ability to deal with them effectively. Currently, governments worldwide are somewhat crippled, preoccupied by various crises, be they financial or natural. Business around the world is also undergoing a lot of change. There is increasing customer requirement for business to act more responsibly and ethically, but beyond that, business doesn't currently have much financial incentive (the only thing it tends to respond to in the short-termist world that we live in) to do so. CSR is vital, but the way it is currently deployed is as an add-on; something that business attaches to the end of its existing activities.

This is where the concept of creating shared value (CSV) comes in. In the same way that we attempted to integrate CSR practices into our Waverider strategy plans, the concept of CSV aims to make the solving of social and environmental problems integral to business and value creation. While many large companies, for example Unilever or GE, are already doing this, there are many more needs that are not being met. Social enterprises, have, of late, begun to fill this gap, as CSV is at the heart of what they are attempting to do. One of the key aspects of CSV is partnerships; many companies can achieve a lot with a CSV approach, whereby value is created for both themselves and society, but collaborative efforts can make use of even greater resources, knowledge and expertise, to solve problems in potentially more efficient ways.

The area I plan to focus, therefore, is to investigate how social enterprises can best utilise partnerships to further society's goals, and thus create added value for all. In terms of the benefits this can bring me... well, I would very much like to become a social entrepreneur in the next 10 years.

Excellent 7 in particular, what do you think?


March 18, 2011

Explore your options

In one of the lectures last week, Jeff touched on the point that one of the key steps of the decision-making process was exploring and developing the options or alternatives available, through various means. Doing so tends to result in having more choice obviously, but it's also likely that you might spot a more out-of-the-box solution than otherwise that challenges what is expected. If I'm honest, the creative solutions that our team came up with were not the result of a particular brainstorming session, or any special technique. They spontaneously arose during the natural course of our collective approach. Perhaps we had an element of luck in this, but I think that the really open nature of our working environment helped this.

I think that this is a really important lesson to take-away. Always take the time to think what else you could do, before you take a decision. This is especially important if you're not particularly happy with any of your present options! Real progress only ever occurs by step change, when someone like Gandhi brings to the fore the ideas of total non-violence, or Steve Jobs introduces the Ipod, or Ipad for that matter. You can bet that they were not happy with the status quo!

It's obviously a difficult thing to do in practice - there is not always time to generate alternatives or to challenge the assumptions of a given situation. But, you can be sure that if you have done so, your eventual decision is likely to be more robust, because you know a lot more about what else you (or others competing with you) might have done. It's quite similar in that sense to having more information when making any decision. Sure, you might become paralysed, waiting to act until you are sure, but the very fact that you have considered what is relevant means that your informed decision is one you can have confidence in.


Good research for robust decisions

We gave our decision-making presentations today; wow that was a long, tough session to endure! I’m not sure anyone was able to sustain their focus through the whole thing, especially due to how tired we all were. Still, in the moments that I wasn’t completely vacant (some might say that these are rare, or non-existent even! ;-)), I did get to note some interesting comparisons between the approaches of other groups and our own.

Something that surprised me though was the lack of research that some groups put into their marketing strategy and budgeting. I don’t know whether anybody was already quite familiar with the industry and so didn’t need to do much research, but I am pretty sure that the task specifically asked for it. How can you expect to make a robust decision without having the requisite knowledge to base it on (I’m sure you can hear the undertones of Deming in what I am saying hehe!)?

I was really proud of the fact that my group did spend quite a lot of time on this. After initially struggling, and trying to base the decisions on our own biases (e.g. “we all do our shopping on the internet, so fishermen will too”, or, “I always take in adverts that I hear on the radio”) the availability heuristic in particular was clearly present for all to see. When we could find no academic work related to what we were looking for, we simply decided to ask those who might know! This entailed looking for companies producing fishing boats in the UK, and effectively calling them up and speaking to their leaders or marketing departments in order to ascertain the information about the best and most effective marketing methods. From this, we learned that TV and radio were virtually useless (we had previously assumed fishermen listened to the radio all day, and that it would be an effective route), but also, most importantly, that internet and advertising in fishing magazines was good. However, the best find for us, which wasn’t one of the options given originally, was that boat shows were the most effective route for selling boats. For example, the Southampton boat show is the biggest in the UK, runs for 10 days each year, and brings in around 120,000 people each year, with average incomes above £95,000 and around 80% of visitors making a purchase from exhibitors of the show. What a fantastic way to target customers who have disposable income and want to buy from you! And we would never have known without picking up the phone and speaking to professional boat salesmen. Doing so informed our decision no-end, leading to confidence that if we had to implement our plan for the different methods, we are relatively sure we would have been successful. Good theory (or knowledge or experience) should be the backbone of decision-making.


I guess I’m a (Decision) tree–hugger!

After spending a lot of time looking at a lot of different tools lately, I have decided that DT’s are probably one of the best (obviously, depending on the situation and the information that you have. Their ability to get to the heart of a problem through finances (or utility) is quite amazing, and the structuring of the process is brilliant in that it helps you to ensure that you have covered every eventuality. It is especially good at helping you to avoid the confirmation trap. For example, any time you make a branch, you also have to question if there is an opposite alternative at the very least, if not more completely distinct ones. They are also hard to argue with, and help you make informed decisions based on the likelihood of certain scenarios playing out. The power of decision trees is something that I am unlikely to forget, and they are probably something I will integrate into my general System-2 decision-making methodology.

In terms of helping our team to reach a final decision, about whether to continue or not, and where to locate, they were absolutely invaluable. Of course, the tree doesn’t know anything that you don’t tell it, so qualitative factors are very hard to incorporate, and something like Grid Analysis or Analytical Hierarchy Process are much more appropriate. Similarly, while we did include marketing costs, or factory re-sale gains, other costs that are difficult to estimate, such as the potential training costs of workers for the Exmouth factory, were not included.

So it can be argues that DT’s do not always give you the full picture, which is true. But, you don’t have to take the outcome as fact. Even after evaluating the tree, you need a high degree of judgement to decide what is important or not, and how risky certain paths really are. The chance of the worst case-scenario playing out for Waveriders (so, product doesn’t get developed until Dec 2012, and when production begins in Jan 2014, the market conditions are poor) is around 0.15. That is the only situation under which producing at both factories might be a problem, so it is worth balancing the risk and pursuing that course of action anyway.

However, DT’s are clearly an excellent tool for decision making, and when used correctly, are capable of judging a situation in a way that our own cognitive processes are rarely capable of. Of course, there is still potential for bias, and they are no substitute for experience and good judgement. They cannot be relied upon to actually make the decision, as they will certainly NOT be taking the blame for bad decisions!


March 12, 2011

Group Decisions in the Real World

Not that we need to make this task harder, but while reading earlier, I thought of a complication that would often be present in group decision making in the real world. In our groups, no-one really has their own agenda; we are all working together, collaborating for the group in order to do as well as we can. There are no competing agendas or ulterior motives. Additionally, we are all equals - no one person has any more say than another in theory (that might be different in practice!).

However, within a business for example, many groups might be composed of multi-functional teams, or with management of varying levels of positional power present. Each of these might have different areas of concern, i.e. the finance manager's role might be to cut costs, the engineer might be attempting to maximise quality, the marketing manager might wish to preserve the size of the budget available, etc. So how do the competing agendas of these people affect their decision making, and consequently, the ability of the group to make decisions? There is bound to be some bias in the proceedings. We know that Deming would advise that the best way forward would be to break down the barriers between these people, instill constancy of purpose, and get everyone thinking about the organisations goal as a system, rather than their own. But of course, in practice, this is difficult.

So, I wonder, what would this task have been like if we were all to play a role? Pretty difficult I imagine, to the point that it might even defeat the purpose of trying to use all the tools and work together. However, maybe there is cause to have a seminar on this, or some (LE style) role-playing exercise to explore the challenges of a situation like this?


Tools for deciding, or confusing?

The last few days have been spent clarifying the problem and then trying to understand the tools best suited to solving it. We used a little bit of a methodological approach even in deciding which tools to try (!), and then each person volunteered to try to implement the ones that interested them. Upon meeting again, we attempted to present the results of our findings to each other, most of us thinking that our work had got us to the point where the group might be able to finalise decisions.

How wrong we were!!! Our internal biases had once again led us astray, and into thinking that our work could be without fault, and that each of the others would automatically understand what we had worked on, making the assumption that they had the same tacit knowledge that we did! It's becoming clear to me that managing all kinds of bias is certainly the biggest and most important challenge when making any judgement or decision.

What actually happened was that we found our work either littered with mistakes we hadn't previously seen, or in some cases, the rest of the group held wildly different views when presented with the work we had each done. This meant that much of what we had done turned out to be work in progress rather than the finished article, as so much rework was required! For example, I had largely focused on the decision trees, both for deciding what our options were and working through the possible results of around 8 different resultant scenarios. But, I'd failed to take into account that we might need another tree entirely for choosing the best location, or that sunk costs shouldn't have been included in the expected value calculations...

Once again, that means that after much confusing of our teammates, who might not have known the tools we worked with as well as we did, and realising that even we might not have used them correctly and entirely, or done requisite research, we find ourselves unable to make a decision still! Monday will be an important day for this.

Reflecting back, and thinking about future applications, I think that this will always be a problem. We will often have to present to colleagues entirely unfamiliar with our methods, so it will be crucial to learn how to translate our resuls in a transparent way, making sure to avoid the curse of knowledge. Of course there will be times when we fail to see errors in our work, so it is also very helpful to have colleagues who also know the methods and can check our work. This is quite a common approach in most engineering situations already, but perhaps as managers or leaders, we are not quite so used to this.


March 10, 2011

Am I going to get MORE indecisive?

This module has provided a lot of food for thought so far. I especially always enjoy seeing the links between whatever we are working currently, and what we have seen before. For example, we spoke a lot in Leadership about the ability of leaders to make decisions, and how they should go about doing so, and now we are being given the methods for how. Similarly, we spoke about the difficulties using lessons learned effectively in our PEUSS PMA's, and that the main problem was that tacit knowledge was very difficult to consciously access. Now we see the effects that it can have when the tacit knowledge we hold is based on unconscious biases (related to the concept of mental models in Learning Organisations from CBE!), and these lead to decisions that might seem good at the time, but ultimately result in unforeseen problems.

I am very thankful that we had the chance to test our own judgement. I think that mine came out relatively well, in that I was right a little more than half the time (but don't tell my girlfriend that it was that low! :P), but it was relatively clear to me, and probably most of us, that we're not right about things nearly half as much as we think we are. System 1 lets us down, and that is where the need for System 2-type methods present themselves, of which we are currently discovering so much. However, I have a concern about all this - while it's good that I'm currently questioning a lot more of the decisions I make, is it counter-productive to question yourself constantly. If you can never rely on your System 1, that arguably makes your ability to respond to new developments in general much worse!

Still, I fully accept the need that it is better to question judgement, and understand our internal motivations, than blindly assume correctness, but it also makes it harder to function...


March 02, 2011

Can there be such a thing as too green?

I don't have the energy for a full-on entry right now, but this very interesting blog article caught my attention and I wanted to share it. In the light of our recent work on CSR, and Jack Welch's management policies, it is a very interesting read. I'll come clean, the reason I found it was that I just made an application to work for GE, and it was part of my research...:P But it seems to me that they're headed in a much better direction than they used to be...haha!

http://blogs.forbes.com/stevedenning/2011/03/01/dont-blame-green-for-ges-problems/

What are your thoughts?


March 2011

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