How complexity spilled the oil


Satellite image showing us the sun reflected b...

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Notice for regular readers (thanks!) I did not write or influence this headline in any way. If you follow the link you will see it is all the work of one of the most authoritative sources global research companies, Forrester, via the, ever reliable, Computerworld who will keep you up to date on IT and general “geekery”.

If the subject matter looks familiar that is precisely because IT IS! I have written about this specific incident in the blog on several occasions and from a couple of perspectives, going back to the days when it wasn’t fashionable NOT to have a daily dig at BP and poor wee Tony Hayward: a man whose, now legendary, gift for miscommunication, could have been learnt at piñata finishing school!!!

They had just placed themselves, respectively, in the positions of “Big bad Corporate” and “sacrificial lamb” for an outraged global population and US administration desperate to find someone to BLAME. WE already suspected that so much of that rhetoric was about deflection…we ALL knew, from the collapse of global banking, that, when it came to Corporate activities, regulation was a fallacy, only an effective smokescreen and that risk management perceived a mere drain on potential profit and bonus potential…therefore tax revenue!

Current societies…are characterised by their extreme complexity at a moment in history in which traditional political institutions have lost much of the power, a power which has now passed into the hands of multinational companies with their relocation strategies. In this situation, a growing deregulation can also be observed which, in turn, redounds in the appearance of new risks and uncertainties.

Ulrich Beck

The best any of us concerned citizens could hope for was that this incident would be, not so much a disastrous oil spill as an inglorious watershed.

The Gulf oil spill of April 2010 was an unprecedented disaster. The National Oil Spill Commission’s report summary shows that this could have been prevented with the use of better technology. Read more of this post

BP Report: Black Swan …or just a bird covered in oil!?


Does complexity guarantee “system failure”? (revisited)

Even before this event became highly politicized it was shaping up to stand as a 21st Century monument to a culture of Corporate mismanagement: Economy before ecology! The incentives to “cut corners” were simply too great. I have argued before that, all too often, sound risk management comes a poor second to generating profits.

It tends to be “dressed up” as compromise…until it hits the fan!

Anyone care to draw a line?: Global financial meltdown – Toyota – Gulf of Mexico spill – ???

This was/is a hugely complex operation requiring enormous financial and human resource. A tight chain of command communicating and coordinating across several companies. Undertaking a range of interdependent functions as part of a feat of engineering that would not have been possible just a few years ago. NO SCOPE TO TAKE CHANCES, TO CUT CORNERS OR TO BE ABLE TO CONTEMPLATE GAMBLING WITH THE ECOSYSTEM OF A VAST AREA.

Even a company like Toyota (Lexus), whose reputation for quality was well-deserved, were tempted by the lure of $100m per annum savings! I’m sure someone better informed than me has already worked out what their direct financial losses have been, in addition to fines, settlements and the long lasting reputational damage for a proud brand.

BP said in a statement that the report, like its own investigation, had found the accident was the result of multiple causes, involving multiple companies.

Read more of this post

Does complexity guarantee “system failure”?


According to one journalist, whose speciality is deconstructing accidents, it does (see below). Naturally we at Ontonix would like to respond to this statement:

When complexity reaches the point of “critical complexity” system functionality is lost and failure can ensue.

System  complexity can be managed…that is what we do! More Complexity Facts from Ontonix


Nevertheless this is an interesting and worrying observation. One that, when taken in the context of Global Financial Services, begs the obvious question: Read more of this post

Beware Self-Inflicted Complexity


Gulf of Mexico with ship

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Here is an insightful piece from Harvard Business Review, by Ron Ashkenas, a managing partner of Robert H. Schaffer & Associates and a co-author of The GE Work-Out and The Boundaryless Organization. His latest book is Simply Effective.

If you’ve read the papers lately, it sounds like “complexity” is the explanation for many of the world’s problems. A feature story in the Sunday New York Times business section, titled “It’s Complicated,” suggested that too much complexity was behind the financial crisis, the difficulty in understanding health care reform, and the oil spill in the Gulf of Mexico. The author of the article, David Segal, summed it up this way: “Complexity used to signify progress…the riddle of some advance in technology. Now complexity lurks behind the most expensive and intractable issues of our age.”

Of course blaming complexity for various problems sounds good and may even feel good, but it doesn’t really accomplish anything unless we can do something about it. But in order to move into action, we first need to look at the difference between naturally occurring (and perhaps inevitable) complexity and complexity that is unnecessary and self-generated. With the former, the best we can do is to learn how to live with it; while the second type of complexity we can attack. Unfortunately, the two are often intertwined. And that’s where things really start to get complex.

Let’s look at the ecological disaster in the Gulf of Mexico. Many aspects of this drama are just plain complex. Trying to stop the flow of an oil gusher 5000 feet below the surface in extremely cold water is a complex engineering challenge — as was the original exploration, drilling, and construction of the oil rig in the first place. Similarly, trying to contain the oil and limit the environmental impact is also complex, involving multiple technologies, the coordination of public agencies and private sector firms, and the mobilization of huge amounts of equipment and people. This is “inevitable complexity” — the application of advanced technologies and human ingenuity to solve new problems in uncharted and unclear waters (excuse the metaphor).

What makes the Gulf situation so frustrating however is that a certain amount of unnecessary complexity may have contributed to the disaster in the first place, and since has made it harder to resolve. On the BP side it seems like operating pressures and quality assurance procedures were not properly balanced; and the accountability between BP and the operating company was unclear. From a safety perspective, the mixture of regulatory authority and industry support made it difficult to insist on compliance to disaster prevention standards. Then after the accident the confusion of responsibility between BP, the oil rig operator, and federal and local government slowed down the response and created disjointed and unclear communications.

It’s possible to argue that these complexity issues are also the inevitable result of having multiple organizations trying to work together. But that would be a cop out. If the leaders of BP and government agencies had a constant and consistent focus on clarifying accountability, sharpening regulatory authority, and making it easy to do things the right way, the Gulf spill might have been prevented. This type of complexity is self-created by the way we structure and manage our organizations. And when combined with the already-existing complexity of technology and business, disasters can occur.

Doomed magazine cover

But this isn’t just a problem for large-scale public issues. Every organization includes a mix of inevitable and preventable complexity. We have complex technologies and manufacturing procedures, multi-stream product discovery and development processes, intricate partnerships with suppliers and customers. All of these are complex. But when we amplify the complexity by adding unnecessary layers of management, confused accountability, slow and unclear decisions, garbled communications, and lack of focus, it’s our own fault. Maybe we don’t create ecological disasters, but we do create small ones in our own organizations every day.

It’s easy to bash complexity. But we need to also look in the mirror and ask ourselves whether we are adding to the complexity.

What’s your view?

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Dilbert speaks out on: complexity and a novel alternative investment strategy


OK so, in truth, it’s Scott Adams (creator of Dilbert) a man put on this earth to observe everyday office life and nuances of business culture then point out how absurd it all is and make us laugh at our own stupidity. When he speaks out it would serve us well to listen…or get a life:[W3Feature1]

Adams Complexity Threshold

“Complexity is often a natural outgrowth of success. Man-made complexity is simply a combination of things that we figured out how to do right, one layered on top of the other, until failure is achieved”

The Adams alternative investment strategy has as much merit as any other…

Invest in companies you HATE. Be warned though, it starts with having to ask yourself a tough and rather unexpected question:

Can you justify owning stock in companies that are treating the Earth like a prison pillow with a crayon face?

Thankfully we aren’t simply left with that thought, he does offer further guidance.

Leadership

When companies make money, we assume they are well-managed. That perception is reinforced by the CEOs of those companies who are happy to tell you all the clever things they did to make it happen. The problem with relying on this source of information is that CEOs are highly skilled in a special form of lying called leadership. Leadership involves convincing employees and investors that the CEO has something called a vision, a type of optimistic hallucination that can come true only in an environment in which the CEO is massively overcompensated and the employees have learned to be less selfish.

BP

I hate BP, but I admire them too, in the same way I respect the work ethic of serial killers. I remember the day I learned that BP was using a submarine…with a web cam…a mile under the sea…to feed live video of their disaster to the world. My mind screamed “STOP TRYING TO MAKE ME LOVE YOU! MUST…THINK…OF DEAD BIRDS TO MAINTAIN ANGER!” The geeky side of me has a bit of a crush on them, but I still hate them for turning Florida into a dip stick.

Apple

Recently I bought something called an iPhone. It drops calls so often that I no longer use it for audio conversations. It’s too frustrating. And unlike my old BlackBerry days, I don’t send e-mail on the iPhone because the on-screen keyboard is, as far as I can tell, an elaborate practical joke. I am, however, willing to respond to incoming text messages a long as they are in the form of yes-no questions and my answer are in the affirmative. In those cases I can simply type “k,” the shorthand for OK, and I have trained my friends and family to accept L, J, O, or comma as meaning the same thing.

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