Organizational Parkinson’s?

Scott M. Shemwell, D.B.A

Originally published as a newsletter in December 2003
This article is a reprint of a chapter from Shemwell, Scott M. (2005). Essays on Business
and Information Technology Alignment Issues of the Early 21st Century. New York:
Xlibris. pp. 39-43.

As information gets passed up an organization hierarchy, from

people who do analysis to mid-level managers to high-level
leadership, key explanations and supporting information is
filtered out. In this context, it is easy to understand how a senior
manager might read this PowerPoint slide and not realize that it
addresses a life-threatening situation.
– Engineering By Viewgraphs
Columbia Accident Investigation Board
Report Volume l
August 2003
Page 191
http://caib.nasa.gov/
Parkinson disease is a slowly progressive disease of the nervous system
http://www.parkinson.org/. Are we are seeing a similar, fundamental breakdown in the
communication pathways in organizational process and information flows? If so, what
are the ramifications to those organizations suffering from this disorder and what can we
do about it.
There is no argument that top executives should not be required to understand the same
level of detail that engineers and first line managers must have about specific processes
that are enabled by technology. However, in a world that is increasing facilitated by data
flow among automated devices, it is important for senior executives to understand the
overall process and information flow and the resulting systemic vulnerabilities that can
cause catastrophic failure to the enterprise.
According to a recent article in the Wall Street Journal, Communications Failures Cited
By Utility Officials for Blackout, September 3, 2003, page B2, by John J. Fialka, both
computer-to-computer and human-to-human communications failures contributed to the
August 14, 2003 Northeast blackout. Increasingly, in a world run by “real-time”
connectivity whether it is online commerce or automated power grids, failures hit the
bottom line, not only by the loss of immediate revenue, but potentially through damage to
reputation with the subsequent increased competitive pressures, as well as possible fines
and increased regulatory oversight.

Copyright © 2005-2010 by Scott M. Shemwell. All Rights Reserved.

 Flattening the Organization?
Pundits, including this one, have long pushed the hypothesis that information technology,
when integrated with business process change, flattens the organizational hierarchy and
can speed decision-making. However, the opportunity to accomplish this is dependent
on several non-technology and non-business process factors.
Good management has a high level of trust in their workforce; however, it is difficult to
commit capital funds to initiatives that management does not understand. Such is often
the case with IT funding. We are rapidly reaching an era when executives will need to
understand both the impact and unintended consequences of information flow in the firm.
On the surface, it would appear that lack of investment and a focus on electricity
marketing were factors in the recent blackout. How many of these same executives will
know how to appropriately spend the reported $100 billion needed to upgrade the
system?
Data reduction up the chain of command, such as described in the Columbia report, is
common procedure. Top-level executives are very busy and do not need the details.
However, they do need to be able to authoritatively challenge hypotheses put forth by
those “selling” their solution to a business issue and sort out the “bet your company”
situation. This is their job!
In the final analysis, rapid decision-making is a function of smart, competent agents
reacting quickly to changing events. When online systems are involved, the decision-
making process involves complex data handling and control systems coupled with human
intervention. As we all know now, major process failures in these environments can
evolve rapidly.
For now, we must address this type of problem using today’s capabilities, however, new
approaches are evolving that may better facilitate decisions in the future. Innovation is
the hallmark of the knowledge age, and despite its current problems, once again we look
to the skies.
Futuristic Decision Making
The space industry is working on sophisticated decision support models that incorporate
procedural and declarative execution systems into spacecraft operations, such as A
Hybrid Procedural/Deductive Executive for Autonomous Spacecraft,
http://groups.csail.mit.edu/mers/papers/agents98-hybrid.pdf. Spacecraft are inherently
complex and operate in hostile environments. Decisions are made against documented
procedures, which we have previously seen may have limitations, using automated
systems to manage physical processes that may not be readily observed. As with many
earthbound complex real-time systems, the default automated decision is usually the off
position or shut down. The authors suggest that there is a hybrid method for dealing with
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uncertainty. Ambiguity Management allows planners to construct worst-case models that
address a number of most likely scenarios against a most likely state of the world – not
just automatically shutdown; safety and environmental concerns need to be incorporated
into such a system. Clearly, this decision support model requires substantial context
integration with robust information handling systems.
While this may sound futuristic and even a fantasy, we may be closer that we think.
Today’s software is workflow enabled. Business rules (procedures) are routinely
incorporated into information flow and data handling systems. The hard part is keeping
procedures fresh or updated.
The next step will be to determine what options may be available other than “shut-down,”
when an automated system encounters a “failure”. Real options theory may have a role,
particularly if the automated systems can provide real-time scenario adjustments to the
humans making the ultimate decisions.
Challenges to be Met
For most of its life, information technology has largely been thought of as a back office
functions. Instruments, sensors, process control systems, and SCADA were part of the
engineering and manufacturing process. Recently, the online society is integrating these
systems as well as customer facing processes.
While there is much work to be done to realize futuristic decision support systems, unless
senior executives recognize the need to get involved rather than deferring to technocrats,
they their put organizations, and possibly supply chain partners and customers that
integrate with them, electronically at risk.
The Failure is Not an Option mantra, like all buzz words, is largely overdone. However,
currently, NASA is reevaluating the Shuttle program, and Northeast electricity providers
are undergoing additional scrutiny, facing potential fines and significant system wide
upgrade capital expenditures.
Corporate governance must extend into the field. Online systems, upon which the
organization’s cash flow depends, fall under Sarbanes-Oxley. Like Y2K before,
management can held accountable for material adverse impact on the organization if
online systems fail.
The nervous system of modern business must remain robust and vital if the firm is to
remain financially healthy. Management failure to understand the ramifications of their
information systems on their business is not an option, but rather a recipe for destruction
of significant shareholder value.
Once an organization goes online or real-time with its revenue producing and asset
management systems, it is by default, and perhaps by law, obligating it to take good care
of its nervous system. Good IT health begins at the top, is institutionalized throughout
the organization, and continues throughout the organizational life cycle.

End Notes

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Shemwell, Scott M. (forthcoming). Essays on Business and Information Series II:
Optimizing Business Performance. New York. Xlibris.