en'tro-py n. (Physics) the ultimate result of the
degradation of matter and energy in the universe.
A simple observation. As we work our desk gets messy.
The work environment presents demands on skills and resources,
we apply structure and observe how the environment responds. We
are adapting to a constantly changing world. If we stopped adapting
we would quickly loose our value/purpose.
There are three major factors that cause large work organizations to naturally become dysfunctional and eventually break down (loose their value).
First factor of enterprise entropy is rooted in process
complexity and how the human mind manages complexity. Fundamentally
we deal with complexity by partitioning the process into manageable
functions, creating boundaries and interdependencies. The size
of these functions (number and complexity of work steps) is determined
by our ability to control/manage the work steps. There is a tendency
to take responsibility for only the work we can control. Because
of this, for the people doing the work, functions become the purpose
of the work. Bureaucracy and ritualized work soon follow. Functions
become optimized at the expense of the overall organizational
purpose. Soon the individual functions become desensitized to
the overall organizational purpose, become resistive to change,
compete for resources, and blame problems on other functions they
are most dependent on. The organization becomes unable to adapt
quickly to changing markets, organizational learning breaks down
and becomes dysfunctional.
Example: Invoices were collected from sales for monthly billing. There was a monthly crunch to get as many invoices into the ledger as possible, even those with account coding problems. The same people entering invoices spent the first two weeks of each month correcting coding errors. They saw this correction process as part of their work efficiency (ritualized). When it was proposed that sales enter their invoices directly, the billing department felt this would be a disaster, that sales couldn't even get codes right (blaming) (rigidity). When sales did eventually enter their invoices directly they got immediate feedback on coding problems and corrected them on line. This freed up over %60 of the billing department who could then follow-up with customers, ensuring customer satisfaction.
The second factor is that the world we live in is
constantly changing. Any organizational process that is not constantly
adapting to this change is progressing towards dysfunction. In
other words there is no perfect organization, no optimal work
flow, no optimal measures, no ideal vision. Much of consulting
and process analysis/design is focused on achieving the optimal
(lowest cost, highest quality) business functions. For free I'll
give you what would cost millions of dollars and many years of
consulting time. Optimal business functions don't exist. What
is needed is holistic purpose driven adaptation to an ever changing
environment. Organizations, processes, measures, and visions only
have value as structures that help us adapt. People adapt more
quickly than structures.
Example: The help desk function logs and resolves
shop floor problems. It had a good reputation in resolving problems.
A new shop floor supervisor was hired in from the engineering
department. Since he knew people in engineering he would go directly
to the design engineers to resolve shop floor problems more quickly.
The more the help desk was bypassed the more dysfunctional it
became, blaming both the shop floor and the engineers. In effect
blaming their customers. This is the path of least resistance
problem. As the environment changes, the path of least resistance
is dynamically shifting, causing shifts in control structures
and work flows.
If men are from Mars and women are from Venus, then
accountants are from Jupiter, senior management are from Uranus,
and MIS are from Pluto. When senior management says "new
market opportunity" MIS hears "we are not sure what
systems we need but we need them right away or it will be your
fault if we fail", and the accountant hears "we have
hunch this will make money (not like the last hunch) and we need
resources that I already told you to use someplace else".
The partitioning of roles within the enterprise puts us in conflict.
That conflict can be seen most clearly at the boundaries of our
roles, ritualized work practices with localized sense of purpose.
How do we share responsibility for achieving the enterprise (shared)
purpose.
My work as a consultant has taught to me have great
respect for these powerful forces of enterprise entropy. My
work is to help design and implement structures and processes
that are self adaptive and help keep these forces in balance.
If I am successful a tremendous energy forms. This energy permeates
the enterprise and dynamically adapts to maintain a shared enterprise
purpose.