HomeIndustry Commentary

KJR themes in the news

Like Tweet Pin it Share Share Email

Favorite themes from Keep the Joint Running in the news:

Zero Tolerance Policies: The use of process is the difference between effective management and bureaucracy. Effective managers keep the goal paramount. Processes guide action, help the organization learn, and are ignored whenever they don’t fit the situation.

For bureaucrats, the process is the point. Following the steps is all that matters, never mind the outcome.

In another example of zero tolerance being a synonym for bureaucracy, we have a six-year-old boy who swatted a schoolmate on the bottom.

The principal, citing the school’s zero tolerance policy for sexual touching, called the police. They, unlike the principal, showed good sense and dropped the matter. Sadly they did not show more good sense by arresting the principle on general principles.

Internal customers also made the news.

Well, not exactly. Misuse of the word “customer” is what made the news.

Customers are properly defined as the people who make buying decisions. Many business consultants define it, incorrectly, as those whose inboxes receive the contents of your outbox.

That use of “customer” is an analogy, and as the Economist points out, “Being an analogy … is not the same thing as being the same thing.” This particular analogy caused serious flight delays over the past couple of weeks.

A story brought to my attention by sharp-eyed subscriber J. MacKenzie (“Airline Safety Alarms Unheeded,Washington Post, April 4, 2008), reports that FAA inspectors were told the airlines are … yes, that’s right … their customers.

More than told. When they tried to enforce the safety rules their supervisors sided with the carriers, threatening the inspectors (according to testimony before the House Transportation Committee).

The good news is, the FAA’s top safety inspector isn’t giving the usual “few bad apples” speech. He’s acknowledging a systemic problem. That’s an excellent first step in accomplishing a useful result.

The FAA episode reinforces the importance of industry regulation — a concept that has become unfashionable over the past few decades.

Industry regulation is needed when the results of pure, unfettered competition are not in the public interest. It fell out of fashion because its downsides — added expense, extra steps, lots and lots of paperwork, and entanglement in government bureaucracies — received excessive emphasis, while propagandists explained away its obvious successes (one example: The Cuyahoga River is no longer flammable).

Speaking of deregulation mania having resulted in even more inconvenience than the regulations themselves, the tipping-domino-like state of the world economy is also in the news. In one of the most insightful articles yet written on the subject (“Chaos on Wall Street,Fortune, 3/31/2008), Allan Sloan dissects both the situation and what we can and should do about it.

Most past downturns were caused by a weak economy dragging down the markets. This one is different: Weak markets are dragging down the economy. The last time this happened? 1929.

As Sloan convincingly demonstrates, you can’t create a mess like this with just one mistake. It took several. One was, clearly, a too-weak regulatory environment.

Following the Great Depression came minimum capital ratio regulations for banks — basically, how much cash they must have to cover their risks. And only banks, even though brokerages and other financial institutions are now allowed to act in bank-like ways.

The result: The bank-like entities don’t even know their risks. Many of their “assets” are portfolios of portfolios of portfolios of loans, packaged as investment vehicles.

It’s the financial equivalent of spaghetti code. It works until it stops working, and once it does it’s very hard to repair.

What possible relevance does all of this have for a working CIO with a job to do? Quite a lot, as it happens.

  • The importance of eschewing (gesundheit!) zero-tolerance policies is, I hope, clear. Policy is a poor substitute for clear principles and good judgment, and should be reserved for situations where everyone must be treated exactly the same, always, rather than being treated fairly and well.
  • Treating those who use IT’s services with respect, without pretending they’re customers, is a key to the ongoing success of most 21st century CIOs. Those who work together in a business should collaborate as peers, not serve each other as suppliers and customers.
  • Recent KJRs have emphasized the desirability of deregulating PCs. As with business deregulation, PC deregulation has a number of benefits.

Also as with business deregulation, once a good thing starts to be too much of a good thing, it can become a bad thing.

Balance matters.