On fixed and variable costs and infinite loops

Everyone seems happy with the proposition that fixed costs should be kept as low as possible in a volatile business environment. That way, you can respond quickly if and when the market moves in an unexpected direction. Everyone also seems happy with the proposition that in the services sector, compensation for human endeavour overshadows any other type of cost. Services are fundamentally people businesses. Many of the arguments that support outsourcing and/or offshoring rely on some of these propositions, at least in part. It is normal to augment the propositions with other arguments, usually to do with comparative advantage, with core competences, with a need for focus, with location, skill and wage arbitrage, and so on.

This post is not about any of those arguments, or about offshoring or outsourcing. You have many places you can go to for those arguments. What this post is about is the little bit that stays behind. The people and processes and skills that are not outsourced or offshored or anything like that.

What intrigues me is how we manage this little bit. This little bit that’s made up of people spending time alone and together.

How does these people interact? Via something called diaries and schedules and organisers and what-have-you. What tends to happen? We have some strange form of negotiation that takes place between all these diaries in order to bring people together. As a result of many such negotiations, the diaries and schedules get filled up, and people then go about their Assembly Line lives. Move from meeting to meeting shuffling bits of stuff every now and then. Attending conference calls that could be audio or video or physical or some mix of the three.

Park that thought for a minute.

Now take a look at time. How long it takes for things to be done. Quite often, the biggest single delay in a process is the time required for getting the “right” people together. How do these people get together? Via the strange negotiation process I referred to earlier. As a result, the time taken to do something is often heavily influenced, if not altogether dictated, by the interactions between the diaries of groups of people.

In principle things like prioritisation and importance fall by the wayside, although organisational structures and status and hard-working PAs can do something to raise priority. Most of the time, it is the scheduling process that sets the priority. Which is strange in itself.

To make matters worse, particularly in large firms, there is some implied code whereby someone who wasn’t at a meeting is able to reopen debates about decisions taken in his absence. Now, since there’s always someone absent at every meeting, what it means in practice is that decision loops become infinite. And nothing gets done.

I have always tried to counter this tyranny of meetings and schedules by having a concept of fixed time versus variable time. I limit the number of meetings that I commit to more than 48 hours in advance. This way, there is a balance between things I commit to well in advance and things I commit to in the short term. I have this sense that what I do makes sense (otherwise I wouldn’t do it….), but I wondered how other people viewed this. I try and describe this attitude as “fixed time versus variable time”; fixed time refers to the meetings you fix more than 48 hours ahead, and variable time refers to the shorter term; call it what you like, I don’t care, as long as we speak about the same thing.

I was in Brussels recently, attending an Identity Open Space organised by The Liberty Alliance and Kaliya Hamlin et al… thanks to all who made the event happen. It was a good session, one where I met old and new friends: Doc, Adriana, Steve, Ben and Kaliya, amongst others. More later on thi.

Kaliya kicked off the second day by reminding everyone about the Principles of Open Space, shown below:

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What intrigues me about all this is the following:

Owner-managed companies have no problem with schedule and meeting conflict, or about reopening decisions after they were taken. Why? Because what the boss says, happens.

Self-organising events also have no problem with all this, as the Open Spaces principles suggest. Open Spaces have been around for a long time…. Johnnie Moore, who introduced me to them, suggests that the concept was formed sometime in the 1980s by Harrison Owen, and has continued to evolve ever since. For those who are interested, here’s Johnnie on the subject: link.

At the two extremes, owner-managed and volunteer-self-organising, there is no problem. The problem is in that great space in between, particularly in large firms and public sector companies and governments. All bureaucracies.

Which makes me think. If you want to kill a bureaucracy you must kill the diary and schedule first. Views and comments welcome.

12 thoughts on “On fixed and variable costs and infinite loops”

  1. JP, may I humbly suggest that you take some of your effort towards Open Space advocacy and redirect it to a bit of anthropology? You are already on the right track, since every good anthropologist appreciates the insights that artifacts contribute to the understanding of human behavior; and you have certainly prefaced your questions about work behavior by examining artifacts, such as “diaries and schedules and organizers and what-have-you;” so let us see what happens when we shine the light of past anthropological insights where you directed your subsequent reasoning.

    Many of my own inquiries keep coming back to Erving Goffman and the essays in his INTERACTION RITUAL book. Goffman was hardly the first to have appreciated the major role that ritual elements play in, as you put it, “people spending time alone and together.” Back in PHILOSOPHY IN A NEW KEY, Suzanne Langer tapped into the necessary role of ritual elements in our very capacity for understanding. Goffman, however, was the one who channeled this insight into the study of “face-work;” and any critique of the Principles of Open Space must account for the extent to which face-work is facilitated or impeded.

    Within the specialty of WORKPLACE anthropology, the other key player is on your side of the pond: Anthony Giddens at Cambridge. His concept of “regular social practices” translates the Goffman rituals into the general domain of work practices; and Graham Button carried the argument one step further in talking about the “immutability” of many of those practices. What these concepts teach us is that, even if a workplace is an “open space,” ours is still a world of paths that we traverse. So it all comes down to the question: Do we pave the paths where the people walk, or do we constrain people to walk on the paths we have paved? I do not think it is simplistic to say that Giddens’ structuration theory constitutes a dialectical synthesis of this opposition; and, in this case, the consequence is that you have to be very careful about any ideological stance that involves killing regular social practices, even those that may be rigidly constrained by bureaucracies. Those Principles of Open Space work fine if you start with a TABULA RASA; and an owner-manager can decide to do just that if (s)he so chooses. However, the slate is not so clean at Xerox or BT, nor is it for most (all?) of their customers!

    Regular social practices CAN (and do) change; but they also resist “attempts of murder.” At the end of the day, it is all about the face-work, which is sort of the “still point” around which social practices can pivot (and thereby change). If we do not honor the faces behind the work, ANY ideology will breed frustration, if not chaos.

  2. Thanks Stephen. That’s a lot of stuff to get through, but since the subject fascinates me I have no choice. Why else would I name a book Fossil Fools?

  3. Hi JP,

    Great piece – I am known to rant about this topic regularly.

    My own point of disagreement is tactical: the best way to kill a bureaucracy is, I believe, to fill> not kill its diary. It is going on all around us, sometimes deliberate and sometimes a kind of mutually assured suicide where everyone does what can be justified as correct, whilst knowing the collective result will be failure.

  4. JP,
    There are two industries in India which are not necessarily owner managed that have learnt the importance and value of the fixed time meeting: media and telecom. Meetings are scheduled well in advance, and absenteeism is not acceptable — probably because the meetings are scheduled by a CEO or COO. This is probably because of dynamic nature of the verticals and the acute shortage of time to analyse and find solutions for pressing problems or challenging situations. The perishable nature of the stock in trade in both cases, I would believe, enforces the discipline and increases the value of such meetings.
    These meetings have another admirable facet: an agenda that is circulated with the scheduling of the meeting, ensuring that all participants participate.
    Is it coincidence that CEOs of media companies and telcos are often seen as owners even when they are professional appointees? I could name a dozen, at least, in the Indian landscape.

  5. JP, excellent point!

    I shall now add the “diary & schedule” to my little collection of true process replacing building blocks, the documents, forms, budgets and accounts. The tools of the hierarchies… the frameworks for (some) process structure, ad-hoc of course.

    “Whenever it starts is the right time” is so apt, with a real process that flows (no start, stop, wait, start…) then that would be true and schedules would be moot.

    Much obliged for the seed!

  6. Anant, of course there are exceptions. Of course there will be CEOs who think like owner-managers, and whose staff respond to that lead. But they are exceptions.

    Sig, happy to have been of service. BTW the writing on the wall is probably Kaliya’s, captured courtesy one of the ZDNet bloggers, I think it was Dan Farber who posted it many moons ago. And the concept is probably 25 years old, as Johnnie suggests.

  7. Having just returned from SAPs monster customer love fest aka SAPPHIRE07, the vast majority of their customers don’t want innovation or change. They want integration on a massive scale with one throat to choke.

    The fact this may not be the best solution is of no interest, especially if those same companies are operating on a global scale.

    You and I might find this anathema to the new breed of knowledge worker that is implied through social computing but that’s the way it is in the Global 2000.

    That of course may well change as companies get exposure to the new A1S services they’re planning to roll out. But that’s for the future – at least 2-3 years away.

  8. Dennis, I am sure you agree that the semantics of “best” can only reside in evaluation criteria. My guess is that the vast majority of SAP customers put a lot of weight on attributes such as accountability and predictability in their own evaluation criteria. This is the sort of thing I had in mind when I commented above on the immutability of regular social practices.

    It is all very well to talk about paradigm shifts, but my guess is that most change is evolutionary. If “the new breed of knowledge worker” defines a “new breed” of enterprise structures and practices, then the “market” will decide which “breed” survives. We all have our hopes and fears; but those will not serve us in predicting the “species ecology” of the next generation of enterprises!

Let me know what you think

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