Ashby in a project scenario
In the previous paper we got to the point of the dotted red line or the adaptive frontier of the Ashby Space. We had completed the explanation of the X and Y axis, the 45 balanced line, the regime areas. In this paper we try to explain the last line on the Space and bring it all together in a specific project scenario and talk about position Q. Further papers will then look at Agile project management and why projects fail. So we will be putting aside our chicken examples and using a construction company scenario. Our friends the foil fencers will appear as well from time to time but less so.
To make it easy for you we put our Ashby space picture back in here. We are looking at the dotted red line and Position Q here and we have explained the other lines in the previous paper.
A project scenario
Family construction company
But as nice as the headless chicken analogy was- let us move to a more project orientated commercial business or organisation. Let us imagine a construction company of some 15 years experience. It was set up by a family of builders and has been building starter homes in green field sites for many years. Starter homes are usually small, terraced or semi detached, they are never more than ground and first floor, they are usually of similar style and finishes. Often an estate of 6 different types are constructed and the estate can be 200 or 400 properties.
It is a relatively low risk business and one that has low but reasonably consistent rewards.
Normal steady state business
The construction company has a regular team of workers, it has a long relationship with it’s financiers, its sales agents,etc. It knows the rules and regulations regarding permits, fire officer requirements, health etc etc It has developed knowledge, skills and abilities in this area of project management. This is an organisation operating in the orderly regime. It can concentrate on cost saving and profit maximisation as it has the responses ready to deploy in the face of any complexity that may arise. These are also called mature project organisations in other models.
Change of direction
Now let us imagine that there is a younger generation coming into the building company. Let us imagine that margins have been tightening, let us imagine that the regulatory bodies are seeking more residences per Ha of land as land is not infinite and extending sewers, electricity, roads, broadband etc is expensive.
As a result the company is being asked to develop apartments in multistory buildings with larger public amenity spaces. It is being asked to move away from its traditional type of house with gardens. A range of new complexities arise and the company has no historical responses to them. A 2 story building is much less technically complex than a 6 story one in terms of internal soundproofing, fire escape routes, noise suppression, structural steel, foundations etc etc..
In the past they left back and front yards as amenity spaces, now they need public areas with children playgrounds, pet meeting areas, storage areas. This is increasing the technical complexity.
Cash flow impacts
Another complexity is the working capital needs are much higher. In an estate in their traditional business model, they can build and sell houses one by one. So as the market moves up or down they can react by speeding up or slowing down house start and completions. In this way they can manage their cash flow and minimise their funding needs.
However in apartment blocks they have to finish out a completed block of maybe 20 or 30 units to be able to offer any for sale. This also greatly delays their incoming cash and raises their outgoings as they have materials and labour for a larger number of unsold units. If the property market downturns, they can be greatly exposed with lots of assets and no income or cash. This risk exists until they complete the sale of the apartment that is the one where cash in covers the cash out. The so-called break even point.
So while on the surface the construction and sale of residential property seems to be the same, it is not. The need for new knowledge, abilities, and skills is increased, not to mention the need for more money. So when this company changes it moves into the complex regime. Over time they will acquire the experience and they need and will increase their responses so that the organisation will move its performance back into the ordered regime.
Disruptive change of direction
Sticking with the construction company let us imagine they become very ambitious and they decide that they really want to become a major player in the construction industry. They want to jump up the complexity (and rewards) of their projects. They have a long history of quality and success, they have many new relatives joining the family business and have a reasonable cash pile and lines of credit. So they look for and win a tender to build a large tourist hotel in an earthquake zone beside a tidal beach in an area some distance from their normal base of operations. The new building is in a built up location and will replace an existing building that has to be removed before any new build work can start. The tender includes a hard delivery date with heavy penalties if the hotel operating chain misses the start of the visitor season.
The comparisons are quite stark compared to the business where they have built their knowledge and reputation. Even the payment is monthly stage payments of contract against progress. This is measured by teams of people and the last payments are only made 12 months after everything is agreed and completed.
The dotted red line, the adaptive frontier
So far so good? So what happens next? In the Ashby space there is a last line. The dotted line. This represents the so-called adaptive frontier. It is a line outside of which an organisation cannot process all the changes it is facing and outside of which it cannot allocate resources to attempt to respond. This area outside the frontier is where organisations are swamped. In the analogy of the fencer, there are so many thrusts that the defender has never seen before he cannot even begin to process what he is seeing. At the same time he is so overwhelmed he cannot begin to be able to choose what response to deploy in such a situation. There is a point that is called Position Q. It is here our construction company find themselves shortly after they win the hotel tender.
In this position the individual is outside the adaptive frontier, is in the Chaotic regime and will surely perish or fail and the project will also fail. The individual or organisation can only respond based on their existing knowledge, skills, and abilities. Their response will be that they will seek to move out of position Q and try to find safer ground from which to face the challenges, to face the complexity of the issues. The picture shows the three possible responses. All seek to move the organisation or individual to the 45 degree line. We know this is the line of safety where the organisation will manage the complexities.
The way they move is described as one of three possible choices. By moving into a contract to develop a hotel the family construction company has moved to point Q. Before we complete our construction company narrative, we will outline the general theory of position Q.
General Response to Position Q
In general when one is in position Q one assumes there is a need to move from there. It is sort of like standing without a weapon in front of an attacker with a weapon. There are three possible movements and these are described in terms of reactions.
The top horizontal pointing line or behaviorists line cannot decide what to do and just reacts and reacts until they perish. They seek the safety of the 45 degree line responding to every threat and attack. They attempt to reach the safety of the stability line by throwing responses at the complexity. By acting in panic mode and making knee jerk reactions, they are the ultimate headless chicken. They cannot filter anything and react to everything even if it is not threatening or is just a feint. A fatal attack will usually finish them off and they will go bankrupt or cease to exist.
The line pointing towards the bottom is knows as the Organiser. She will seek to move back to where she is comfortable. There will be no effort made to offer new responses to complexities. She will offer as a response to the complexities what has worked for her over and over again. In fencing parlance she will look for the attack moves that she is familiar with and attempt to parry them. She will deploy what resources she knows to try to counter the attacks and will actually ignore many of them. She will only respond to ones she has seen before.
She will suffer injuries and damage by not responding. She may or may not survive the injuries depending on what way the challenge and the responses align. If the new challenges only cause flesh wounds then she will be injured. She can retreat to do what she knows. She will survive bloodied and battered- but alive. A longer term response will be to develop a stick to the knitting management style.
The third line represents the strategist. He will seek to understand the attacks, to filter feints from attacks. He will identify the thrusts that may be fatal and to quickly adapt and learn how to respond and parry them. They seek to move to the 45 degree line, to get inside their adaptive frontier. This, in a way, is the learning organisation or learning individual. They seek to expand their range of responses and move to a higher point along the balanced line. The learning individual who faces the challenges, successfully filters out the ones that are merely noise and learns to adapt and respond to the rest.
Let us look at this in the example of our construction company
Position Q and the construction company
Constructing a Hotel
In our family building firm example when they win the Hotel construction contract they quickly find themselves at position Q. Position Q is in the complex zone, it is in the perish space above the 45 degree line and it is also outside the adaptive frontier. In our scenario, let us assume that complexities appear early in their new project.
During demolition, a historic human habitation site is uncovered and a range of new external stakeholders appear seeking to delay the work while the site is fully explored. The family imagine paying for a slew of archaeologists digging in the site with spoons and writing tomes of reports. Added to this there are letters speaking about cease work court orders, and new regulatory bodies becoming involved. These are demanding proposals to deal with the situation.
The general public gets involved with on site protests and pickets seeking full preservation of the site. A competing protest group is formed seeking to protect the jobs that will come when the new hotel is completed. Media, both social and traditional are making the matter a lead item and taking the coverage viral with all kinds of mis and mal information. All these challenges quickly overwhelm the family.
The family splits in their responses. The younger members want to bring in help and develop a strategy to deal with the challenges. They are following the strategists mode of action.
The older very conservative members of the family wish to do a complete U turn and get back to the business they know of constructing starter homes. They have no wish to learn anything. If it’s not broke, why fix it.
A middle group want to just flail away at the problems and cross it bridge by bridge as it comes along using what ever they can to figure it out as they go along. They think experts are not worth the money and that they will somehow manage to get to the other side by themselves.
The conservative members of the family ultimately win out. The company fails in this project and is divided by the experience. It is forced to negotiate to exit the contract and ends up paying a large penalty, plus a slew of legal and PR bills.
The younger members felt that they were not supported or allowed to acquire the new resources needed to make the step into the construction contracting market.
The conservative members of the family were horrified at the damage done to their balance sheet as they spent piles of cash to get out of the contract. As well, their reputation was dealt a blow from the negative press from all sides when they abandoned the contract.
The middle group were not happy as they lost the contract and lost money. Plus they are still doing what they always did. They still believe they could have made it work somehow.
So we see how the Ashby picture is fully constructed. This allows us to consider our role in projects and the impact of our knowledge and skill and abilities can impact.
We feel this is a metaphor for life. To develop ones skills, one must meet challenges and plan to push oneself to the limits. A good strategist will do so and plan to increase their learning. As a result they can benefit and earn a greater reward for their skills.
In our 5 ways to grow this is a cornerstone theory. We want to grow, we want to earn more from life. We want to take on challenges, but we do not want to be swamped. By following a strategist style of action we can do that. Using PM techniques will help us.