Complexity Primer

Complexity ≠ Safety + Efficiency

Introduction

Complexity is a much discussed issue nowadays.  Whether it is about financial markets being too complex and difficult to regulate, about a form being too complex or about a major incident that resulted from a complex organisation complexity gets a bad press.

The complexity and interconnectedness of the financial markets is highlighted as a major cause of the credit crunch.   The report into the space shuttle Columbia’s crash highlighted complexity of the NASA organisation as being a significant issue.

While it is difficult to pretend that the shipping industry is a complex as either of the above examples it should be clear that for a relatively simple and historic task i.e. the transportation of goods by sea the degree of complexity is probably more than it needs to be.

This paper will explain what complexity is and how it relates to the marine industry

Complexity for beginners

It is worth taking a look at what complexity is

A Dictionary definition is:-

1.       Composed of many interconnected parts

2.       Characterised by a very complicated or very involved arrangement of parts units etc

3.       So complicated or intricate as to be hard to understand

The figure below defines the terms simplicity, complicated and complex in a more scientific context.  The critical point in these definitions is the ability of people to understand what is going in a system.  It is about perception to some degree and providing the individual with the right tools and context can improve understanding.

The other important point is about change in the system.   If you are often surprised by the results of changes you make to your organisation then you are face to face with complexity or at least a complicated system that has not been modelled. 

A great deal of research is being done on complex adaptive systems.  The examples that are often considered are such things as insect swarms, traffic movement and once more financial markets.  The research has shown that complex adaptive systems have a number of features.

The figure below shows the generally accepted features of a complex adaptive system and how the system behaves.

It is important to not try to force fit the shipping industry into the bullet points.  Indeed one report into the Columbia tragedy blamed bulleted presentations for hiding the real messages that presenters were trying to give.

It would be hard to define the shipping industry as competing for scarce resources in the way that insects do to feed but it can be said that the scarce resource the industry is competing for at present is revenue.  Within the shipping company the scarce resource may well be time.  That competition for scarce resources can result in decisions that are not in the best interest of the business or industry.

It’s clear the system is open because the shipping industry in its role connecting countries together by moving cargo is influenced by virtually everything that happens whether it is economic downturn, energy prices, terrorism, and environmental concerns.  The shipping industry is not an island. 

There are a large number of interacting ‘agents’.  These ‘agents’ can be people or organisations.  Large number?  Try to count the number of bodies that influence the ship operation and the number of people within them.   Within the owners ‘system’ he needs to think about the people in his organisation both ashore and afloat who are influenced by their history, who remember things that happened in the past and things that you tell them now.  The ability to adapt to improve performance should be a valuable asset.  However great care needs to be taken as to how define ‘performance’.   If you have defined a narrow goal and provided a large incentive to reach that goal then it should not be a surprise when you meet that goal.  You should also not be surprised by the unintended consequences of reaching that goal as with rogue traders who lose large sums of money or manipulate markets etc.. 

It does seem sometimes that organisations are alive but I struggle with comparing the shipping industry with financial markets which do seem to have their own mind despite the number of pundits who claim to be able to predict the outcomes.

That the behaviour of a shipping organisation is emergent (i.e. is produced by the system not by a guiding hand) and sometimes surprising is more easy to understand.  The classic example is when you consider an organisations safety culture.   This is especially the case with an organisation which has a very low accident rate.  An organisation achieves that low accident rate when it has built a large number of effective physical and process barriers to prevent accidents and those that are left are mainly in the domain of people and their behaviour.  Accident rates emerge from the culture and it is often surprising to find how that culture has developed and how your actions have affected it.

I would also struggle with the lack of an invisible hand.   Most shipping organisations are relatively predictable until they reach the point of overload at which point managing the workload may dominate over the organisations goals.

Organised then suddenly disorganised is more recognisable.  An organisation may go along happily with all the systems, KPI’s etc. telling its executive that all is well and then suddenly a major incident, event, problem appears leaving that view in tatters.

What are the features of a complex shipping company?

The features of a complex shipping company are as follows:-

       Periods of steady running followed by sudden unanticipated  mishaps/disasters

       High executive workload on management (rather than leadership) issues.  Large numbers of meetings on process issues and failures.

       High and growing cost from countering complexity (pedalling faster)

       Difficult to predict what will happen when changes are made

       Disconnection between ship and office

       Reduced ship performance as goals etc become confused and staff focus on just following the rules rather than using their experience and knowledge

       Difficult to analyse problems because there are too many ‘pieces’ of the problem that may conflict

       Difficult to draw the correct conclusions from investigations and find solutions

 

If you recognise even some of the above then you are probably already dealing with the problems of complexity.

The Workload Issue

There is a general understanding that the workload on board vessel has reached or exceeded the ability of those on board to absorb it.

The figure attempts to illustrate the growth in workload and hence complexity over time.  The figure illustrates the increase in both procedures and compliance requirements at the same time as the capacity to absorb is reduced. 

The capacity to absorb is not just a function of the number of people aboard but is a function of the quality of the system, training, competence and the allocation of work within the vessel amongst other things. 

As the capacity exceeds the workload you end up with:-

Corner Cutting.  Where procedures are not fully followed to save time.  The decision as to what to follow is taken aboard and is based on managing workload as well as the individuals perceptions of the organisations and their own goals.  

Box Ticking Culture.  Where check-lists and documents are completed without the underlying checks being completed.  This can create the illusion of compliance and steady state running until an incident occurs.

Before I am accused of slandering those who run our ships the occasions when people wilfully and deliberately ignore the procedures and compliance requirements are mercifully few.   The problem lies more with lack of trust in procedures either because they are poorly written or impractical.   Conflicting messaging on what the organisations goals are can also weaken the confidence in procedures.  With this background a number of reasons for not complying with procedures and checks can be found (from a book called Efficiency Thoroughness Trade Off by Erik Hollnagel.):-

·         It looks fine

·         It is not really important

·         Its normally OK

·         It’s good enough for now

·         It will be checked later(or was checked earlier) by someone else

·         There is no time to do it now

·         Etc......

 

The graph shows the evolution of workload over time.  Each company will be different in how it evolves but my view is that the period of clarity existed in the late 90’s where a combination of strong competence combined with the development of ISM created the right environment.  I believe some companies may have retained that clarity while others have created more process and more confusion.   

Distortion is a special case where either incentives or threatened punishments result in goals that are not those of the organisation dominating.

As we go from clarity to confusion the risk increases and this may be one reason behind the increase in incidents in the tanker sector (Many other reasons are possible)

 What causes complexity in shipping?

We have covered the increased in workload and confusion caused by large numbers of procedures.  This creates a difficult in understand what the goals are and what is important.   In a simple world the workload would be less of an issue and would only be limited by the physical ability to ‘do’.

When we think back to the various definitions:-

1.       Composed of many interconnected parts

2.       Characterised by a very complicated or very involved arrangement of parts units etc.

3.       So complicated or intricate as to be hard to understand

Anything that affects the interconnected arrangements or affects the perception of it will causes complexity.   The perception issue is important.  If you have a framework to fit things into then it is possible to deal with more complexity.   Issues that cause complexity in shipping are:-

Lack of clarity/Conflict in goals and strategy/Conflicting messages from Leadership

The framework is important.  It is the executive’s role to provide direction, leadership and management.   If there is no clarity in the organisations direction then there is no framework to work within.

The figure illustrates this from the point of view of those onboard.  Important point.  Complexity as viewed by those onboard is what is important.  The shore organisation should be able to cope with more complexity while preventing that complexity from reaching those aboard.

Conflicting messages from leadership is an important one.  Anyone who has managed in the email/internet era will know that it is not what you say in carefully thought out presentations that causes problems, is off the cuff remarks which ‘go viral’ and are received as the message ‘This is what they really want’.

Reward and Punishment

This was mentioned earlier.  If people are motivated by large rewards or by avoiding punishment then their understanding of the goals will be changed.   If the goal is to reduce accidents and people get a reward for not having accidents while being punished for not following procedures then you need to expect that reporting will be affected.  This is not to say reward and punishment are not appropriate but within boundaries.

Confusing Organisation Structure/Conflicting Accountabilities

Complex organisation structures increase the number of interactions and the number of potentially conflicting messages.  Conflicting accountabilities make decision making difficult and means endless means to resolve issues.  Such structures spend many hours creating elegant compromises with inelegant results.

Conflicting Messages in Procedures

Procedures take time to update.  If an organisation change, cost cutting drive or other change is introduced without the procedures reflecting the change then confusion results

Process becomes the end not the means

Process and management systems exist to deliver a result.  Over time and with monitoring of systems and audits the belief can arise that the organisation exists to serve the system not the other way round.  This is the ‘2001’ scenario where in the cult film the computer took over the spaceship.

This also leads to the law of diminishing returns.  Where early process wins added a lot of value with little effort, later changes give limited or no improvement at greater cost so that ‘continuous improvement’ can be satisfied.

Inappropriate Application of Cross Industry Learning

The shipping industry should learn from itself as well as from the wider world.  The problem arises when either fads are introduced or a shipping company as part of a larger conglomerate is forced to apply learning after incidents elsewhere.  This may add complexity without adding value.

Drawing the Wrong Conclusions

Most are aware of Murphy’s Law ‘What can go wrong will go wrong’.  Its less well know corollary is ‘What should go wrong doesn't and we draw the wrong conclusions’. 

The figure based on the excellent book ‘The Art of Action’ by Stephen Bungay illustrates the point. 

When analysing management or operational problems it is often possible to draw the wrong conclusions and makes things worse.   The alignment and effects gap shown in the figure illustrate this.



Using process for everything

Process is one tool that can be used and it is tempting to use it for all problems when training, competence, and leadership may be the right answer.   Using process for the wrong things will result in unwieldy organisations and structures. 


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martin shaw,
12 Dec 2012, 03:52
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