June 12, 2008
In the previous post we started an examination of software delivery from the perspective of evolutionary biology. In that context we saw that business cases can be viewed as memes and software projects as a certain class of phenotype (or way in which that business case gets expressed). Following on from that, an organisation’s slate of new commercial development proposals can be seen as its meme-equivalent DNA, where at any given moment a subset of those replicators will be activated/ratified and then express an extended range of intra- and extra-organisational phenotypes including marketing campaigns, IT projects, industry bodies, etc. The success of these phenotypes will in turn determine the degree to which those memes/business cases are then perpetuated via further iterations of investment and development. To understand more about how this happens, we now need to look at the nature of selective environments.
An examination of most companies today will reveal multiple concurrent levels of collaboration and competition: individuals compete and collaborate within the environment of their team, with their peers in separate teams and business divisions, and very often with other people in the industry within which they work (IT news groups being an obvious collaborative example). Teams compete and collaborate within the enviroment of their business division, across business divisions, and quite often across company boundaries with similar teams in competitor organisations. Similarly organisations compete and collaborate within industry sectors, and again sectors quite often compete within the wider economy (e.g. online music sharing services competing with the traditional record industry).
The first point of great interest about this is its symmetry with the scale-invariance of power law systems. Whether we are looking at the level of individual team members or the global economy, we can see the same thing happening: namely different environmental factors applying selective pressure in favour of certain key characteristics. Secondly, when we more closely examine those environmental factors within a business context we can see they are nothing other than what micro-economists refer to as incentives. Incentives are the features of economic environments that determine adaptive advantage: they create the selective pressure. (It is worth highlighting at this point that we are not making any claims about human nature: incentives can promote altruistic, enlightened behaviour as much as greed/self-interest). Along the scale described above from individuals to the global economy, different incentives will create different selective pressures. Those pressures may act in the same direction or else they may act in conflict. For example, the impending credit crunch clearly suggests that recent city trader incentive/bonus structures were in conflict with the interests of the wider economy.
Incentives can be specified either explicitly or implicitly. Explicit incentivisation takes the form of sales targets, call centre response times, unit test coverage targets or any other published quality metrics. Implicit incentivisation fills in the remaining gaps, and is normally adopted as a result of unreflective organisational behaviour (for example, inexperienced IT management rewarding anti-collaborative “rock star coder” behaviour with more kudos or the most interesting project work). It is frequently the underlying cause of unexpected or undesirable behaviour, and the first step towards effectively addressing such situations is normally the identification of those rogue incentives so they can be removed or else explicitly overridden.
In this way, we can see that the health of a business environment or any other complex system depends on the alignment of its incentives (i.e. success criteria) across the different tiers of selective pressure (something Jim Shore has recently aluded to in slightly different terms as the multiple aspects of project success). This in turn reflects the interdependencies characteristic of such power law systems. Where incentives get out of alignment, those interdependencies are no longer accommodated and malignancy is the result (quite literally in the biological world: cancerous cells compete and replicate very successfully at the cellular level, but at the overall expensive of other levels i.e. the organism).
When we consider the project-centric world view currently prevalent across the IT industry from this perspective, a few things come to light. We begin to understand that a programme management culture of on-time/on-budget project incentivisation has created selective pressure in favour of IT projects simply because they are an easy vehicle for meeting that target. Part of this is related to the misguided insistence by so many IT divisions today of referring to the other parts of their organisation as “the business” (frequently this is in turn symptomatic of an over-the-wall software release mentality and ultimately a basic lack of care about the real value of what is being delivered: “the project shipped on time and on budget, beyond that it’s not my problem”). A project does not just deliver within the IT division environment: we are part of “the business” too and we need continual reminding of that fact. As we’ve seen previously, on-time/on-budget has no direct correlation with organisation-level pressures to deliver added value. When we align selective pressures across the delivery environment and incentivise software delivery more meaningfully in terms of generating business value, IT projects are demoted to their rightful position as incidental artefacts – artefacts that frequently just get in the way.
A final key point to note about the scale-invariance of selective pressure is that it also emphasises the holistic nature of organisational health. It’s not just about the organisation: unless the needs of every interdependent adaptive tier are being met – from job satisfaction of team members up to healthy competition across your industry sector – then your organisation is ultimately going to end up in trouble.