Rendering plants for people

February 4, 2015

An interesting day working with a group of Partners from ETHOS with whom we are starting to form an interesting series of relationships.  I’ve had several meetings with them since I was introduced by Euan Semple and Jon Husband.   I share many of their values and approaches in particular a passion against the tyranny of utilisation based consultancy models.  Today and tomorrow I’m working through SenseMaker® with them with three objectives: (i) to see if it can provide a measure of value for share allocation etc.; (ii) to look at its value to differentiate major bids; (iii) to create new (or use existing) product offerings that will help sell value.  I’m also using the occasion to flesh out some of the Zurich work on creating templates for SenseMaker® projects, so expect some more on that over the next few days.

Wider applications apart the utilisation issue was already on my mind.   I had dinner the night before with a former close colleague at IBM now one of the many post 50s in effect pushed to take early retirement/exit options by a management which has in my view lost all sense of purpose, morality and value.  Steve Denning has written an excellent series of blog posts on the growing perversion of what was one of the world’s greatest companies, the latest of which focuses on financialisation.  A simple search on Denning + Forbes + IBM will give you the rest and I recommend reading them.   I have disagreed on many subjects with Steve over the years (not least the rebadging of a failed approach to KM for learning in the SCRUM community) but in these posts he is spot on.  I was frankly amazed to see announcements of large bonuses and pay rises for Ginny Rommetty a week ago give the parlous state to which IBM has beenrendered by her, and earlier Sam’s focus on short term measures over long term value.  That bonus alone would have allowed the retention of many key knowledge assets that IBM is loosing.

The main ethical problem with utilisation as a model is that assumes that people are widgets in a manufacturing process that deliver value in direct proportion to time used.  This dehumanises the consultant to an object within a system rather than an engaged subject. Aside from what that does to the consultant think about its implications for the client?   Without spending too much time thinking about this I came up with seven negative implications:

  1. When I first designed and programmed decision support systems on mainframes we were even worse, charging for times and MIPS.   So if you were a poor programmer then the client got charged more.  Time is not a measure of value, but manufacturing models of consultancy as opposed to artisan ones by their nature assume it is.
  2. In a utilisation driven business a line tends to be drawn on a list every quarter or every month and everyone below that line is in trouble.  That means that individuals need to manage their projects with care and large team long term projects are more safe that short term small team ones.  A consequence of that is that few good people are prepared to work on innovation or risk based projects and the client suffers as well as the consulting firm.  Bigger teams mean that poor performing consultants can be hidden
  3. Of course as all auditors know, big teams allow them to hide training costs in client billing, the same is true for most large consultancy firms
  4. That in turn means that large, high utilisation, high dependency contracts are the most valued.  So Principles who bring in contracts that end up deploying large teams over years with high dependency on them get promoted faster.  It means that there is little interest in skills transfer to the client as that would (i) reduce utilisation and (ii) reduce decency which in turn would (ii) reduce more long term contracts etc. etc.
  5. Utilisation does not take account of experience and the linked ability to spot something early or see a connection between things.  That ability is often greater in older people with more experience of different contexts.  The ability to reflect is damage by a model based on utilisation.
  6. As competitive pressure increases and in consequence rates go up the need to maintain earnings means that utilisation targets are increased.  That in turn leads to less reflection, less insight, more heads down and execute regardless of the context.
  7. It further increases the tendency in modern forms to manage by spreadsheets rather than knowledge of capability.

Of course this does not just reduce value to customers, it dehumanises all those engaged int he process, reducing people to objects.  So I am sorry if the image offends, but it is more than appropriate to the subject.

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The Cynefin Company (formerly known as Cognitive Edge) was founded in 2005 by Dave Snowden. We believe in praxis and focus on building methods, tools and capability that apply the wisdom from Complex Adaptive Systems theory and other scientific disciplines in social systems. We are the world leader in developing management approaches (in society, government and industry) that empower organisations to absorb uncertainty, detect weak signals to enable sense-making in complex systems, act on the rich data, create resilience and, ultimately, thrive in a complex world.

Cognitive Edge Ltd. & Cognitive Edge Pte. trading as The Cynefin Company and The Cynefin Centre.


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