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February 10, 2006

Pointing The First Finger, Having the Last Word

One of the more interesting opportunities to demystify organizational ineffectiveness rests on turning over a common assumption that Authority should delegate Responsibility.

In a revised view that brings operational discontinuities to the surface before they do their damage, organizations should consider having Responsibility delegate Authority.

Responsibility requires explicitly committing to performance levels that are critical to the welfare of an organization's clients and stakeholders. When the stakeholder view of performance is itself explicit to all members of the organization, authority can be a flexible tool dynamically distributed to where and when it is needed most.

Members of the organization should be encouraged to identify what they can do to contribute to the organization's successfully meeting the responsibility; thereafter, the operational issue is understanding when their actual opportunities to contribute should be solicited and/or approved -- in other words, authorized.

Distributing authority is the main purpose of Approvals. If approvals are designed correctly, they are based on a set of priorities based on rules and requirements that represent the stakeholders' best interest and guide the interpretation of real-time events versus. Formalizing the understanding of these interests is where Policy comes in.

Obviously this also brings up the issue of what stakeholder is being represented -- consequently it is easy to appreciate that there may be multiple policies representing multiple stakeholders. This is presumably good for the stakeholders, but it is also problematic. For example, customer-oriented policies may overlap supplier-oriented policies in some repects but conflict with them in others. Since there is a greater variety of customers than suppliers, the chance of this happening is not insignificant. Emphasizing this point: anyone who has been caught in an "unsolvable" customer support problem, where multiple support parties cannot agree on providing a successful response, already knows that the likelihood of conflict is very real. This means that policy reconciliation is important to be able to pursue, and it needs to be timely in order to be considered effective.

By example on a grander scale, the breakdown of cooperative recovery in disaster situations such as the Katrina Aftermath exemplifies the weakness inherent in the system of authority delegating responsibility. This article from the New Orleans Times Picayune spells out the typical complications. In the story, the presumed top-level responsibility is to manage levees to protect the city from future flooding. But the attempts to align parties to the responsibility are conflicting with the current distribution of authorities (which have not issued from the responsibility). This current setup finds the practice of "standing authorities" delegating responsibility, with the result that the levee protection appears to remain uncoordinated. Excerpt:
[Republican Representative M.J. Mert] Smiley, whose district includes Livingston Parish, told Boasso that local-level leaders had opposed being part of the [proposed consolidated] authority “because we will never benefit in any form from your bill.”

In essense, that party refuses to accept the high-level responsibility, leaving it dis-organized and, even worse, ripe for competitive blaming should future flooding occur.

But let's keep that in context. Policy-based granting of authority also presents the issue of who should be interpreting approval requests, and who should account for compliance to approval standards. Since the policies and rules already set the key terms for granting the approval, approvals per se do not stem from the interpreters. However, in actual practice, authority based on the approval mechanism is granted by virtue of the interpreters. Who are these interpreters? Administrators and executives.

Thus we can see that to avoid dis-organization, what an organization needs administrators and executives to do is to dedicate themselves primarily to promoting acceptance of the high-level responsibility that represents the stakeholder to the organization. From this predisposition, it is far more likely that the resources actually resident in the organization can be tapped at far more depth and variety than is usually done. Organizations that enjoy the idea of being "agile" and "adaptable" must understand whether their basic premise for granting authority internally is actually productive or counter-productive.

In achieving that understanding, another key consideration will need to be the ways that processes currently distribute authority in competition with policy interpretation. As a proxy for approvals, processes can eventually hide the assumptions behind the decisions that the process enforces. This is actually being revealed somewhat dramatically through a new generation of business process management tools (BPM) that excavate rules from the processes and leave the rules bared to direct re-examination. Because of that, organizational behavior can be freshly evluated for how it connects the assumptions behind the rules to the demands behind currently respected requirements. Then we can adjust the assumptions, the connections, or both. Thus we can see how BPM works as an aspect of managing performance. The big opportunity is to improve alignment of the processes to the same responsibility that spawns policy and its approvals. That way, processes are more likely to productively support policy -- a "no-brainer" improvement objective in the face of challenges such as regulations, competitive differentiation, environmental risk, and economic pressure.

Posted by Malcolm Ryder at February 10, 2006 8:22 AM

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