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Principles
Principles
refer to the most abstract level at which we can speak about
a company and make sense. Principles are meant to be descriptions
of anything. It is a misuse to expect them to provide scenarios,
specificities, or quantities. Principles offer a way of discovering
how far back we can meaningfully push our inquiries into what
we are doing. Through that activity, we can understand and
formulate the ideas that run our business. It is important
to realize too that if we violate the principles upon which
our business operates, we will either fail or become something
else. Principles are fundamental to the character and nature
of what we are doing. They help us recognize that whatever
we are doing make sense to us in a certain way. For HP it's
"satisfy our customers."
Models
Models
or theories are what we construct on the basis of principles.
When we say that ideas drive our models, we are describing
a situation in which we build things in the likeness of our
principles. Humans were created in the likeness of God. Southwest
Airlines was created in the likeness of low-cost, low-price.
Models are structures and concepts, the undergirding of the
complex adaptive system we call business. Because they provide
form to our ideas, they continually intersect the range of
adjacent possibilities. If principles are the ultimate abstractions,
models are abstractions in action. It is in the relationship
to models and theories that behaviors are defined and all
innovation takes place. This is why ideas are so critical
to doing business. If our ideas generated by our principles
are wrong, the models we built that are based on them are
faulty, too. In addition, our models since they are only likenesses
are ultimately flawed. Models are only as good, accurate and
effective as the available feedback and the feedback generated.
For example, if the CEO makes all the decisions, he might
surround himself with "yes-men" who merely echo his ideas.
In this situation, the accuracy of the organizations model
would be suspect because of the available feedback would not
be very good.
Rules
Rules
are temporary, approximate ways of adapting to very local
conditions. They do not define the system. Their only function
is to guide how the system behaves or operates in relation
to certain kinds of changing conditions and circumstances.
They are the ways we operate the models. The sole reason for
a rules existence is pragmatic. If rules work, keep them.
If they don't, drop them. Work usually has a very precise
definition that underlies way we formulate that rule at all,
so rules need to be designed to provide an initial level of
comfort and structure while someone is becoming familiar with
a way to do things. We have very specific rules that govern
how we operate machinery so that people don't get hurt. The
important factor about rules is that they are not fixed and
unchanging. Locking into rules as a method of operation freezes
the possible and eliminates real innovation.
Behaviors
Behaviors
are what people in the organization actually do in the performance
of their activities and work, in the execution of their models.
The question is: How is that behavior generated? It appears
to be generated by a person's simply learning the rules, but
in reality, paradoxically, it does not. To understand behaviors
we must return to models. The models that make up that business
influence the relationship of each individual agent within
an organization to every other agent within the organization.
What makes a model or theory work is that it is constantly
being modified in relationship to the behaviors it informs.
It is what is called a recursive relationship, feeding back
and forth between two aspects. If we want to make the likeness
of the principle of a low-cost, low-price airline work, to
approach the ideal, we must be continually adjusting that
likeness, modifying and shaping it in relationship with our
behaviors. This is what is called productive behavior. We
cannot reduce that adjusting process to the domain of rules,
because rules are in place to tell us how to make the previous
likeness of our idea work, not to develop a new likeness.
If our behaviors are to construct a new and better likeness,
they cannot be limited by old rules that no longer relate
to the new likeness. Models of a core of intelligibility,
but only when that intelligibility is expanded and understood
through our behaviors is productivity possible. To complete
the recursive circle, behaviors then provide feedback, informing,
and reforming the model.
Written
by Howard Sherman & Ron Schultz
Printed with permission Howard Sherman, Open Boundaries.
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