What makes a flock of birds or a school of fish move as if they are a single entity? What makes them all suddenly rise, turn and accelerate at the same time? There is something else at work here than just a leader bird or a captain fish telling all the others what to do. This quick coordinated behavior from large groups of individuals is called swarming. What can we learn from the dynamics of swarming that is relevant to the way we structure and operate businesses in our real-time economy?
Swarms place more emphasis on decentralized coordination rather than on centralized control to get things done. We are used to the hierarchical, top-down model of centralized command and control, but this model is proving to be too rigid, too slow moving, too cumbersome to deliver the responsiveness we need. How can we use the quick coordination we see in swarms to guide our companies?
One way to do this is to use a business model where senior managers tell their people what their objectives are but then let people figure out for themselves how they will achieve those objectives. In this model, people need to learn how their individual actions combine to create larger effects within the company to move it toward achieving senior management’s objectives even as situations continue to change in unpredictable ways.
Business process management (BPM) systems are a key component of any business model that emphasizes this kind of decentralized coordination. These systems provide the real-time monitoring and display of operating results that people need. When everyone knows their objectives or performance targets, when they can see moment to moment what is going on and whether operations in their areas are on target or off target, then the swarming dynamic starts to happen.
A notion like swarming behavior violates our classic concepts of command and control; it sounds pretty chaotic. We might agree that swarming behavior could work when objectives are simple and short term. But for more complex and longer term objectives, we tend to think we need complex management and control procedures. It seems like decentralization of control is neither time nor resource efficient because the number of technical and performance issues is so large and their interdependencies are so difficult to unravel.
New Ideas Often Seem Counterintuitive at First
Let me respond to this by telling a story I heard from my economics professor in college. He would begin by saying there were once two contending models for how to best organize and control a nation’s economy – the planned economy model versus the free-market model. One model held that a centrally controlled, rationally organized economy directed by experts was the best way to deal with all the complex issues that arose. The other model said all that was needed was enforcement of a basic set of rules such as respect for contracts and honest reporting of financial results and people and companies on their own would effectively organize and control themselves without further intervention.
He described how a high-level delegation from the government of a developing nation tried to figure out which of these two models to adopt. First they traveled to New York City and visited the trading floor of the New York Stock Exchange. It was a chaotic crowd scene; people were running about writing things on scraps of paper; they were shouting at each other, waving their arms, making hand signals; and the walls were covered with huge computer screens and electronic displays showing a constantly changing barrage of numbers and words.
Then the delegation traveled to the Soviet Union and visited the Ministry of Economic Planning. They saw buildings filled with rows of orderly desks; well-educated scientists, engineers and economists collected information; and the ministry made plans and issued orders for what each sector of the economy should produce and when and how much would be needed in order to meet the nation’s development goals. Which model do you think the delegation recommended to their government when they returned home from their travels?
Most companies still use traditional hierarchical organization models and most employees of these companies have their work closely regulated by supervisors and bosses. These companies focus on the traditional industrial concepts of economies of scale and achieving high productivity through rigorous application of standard operating procedures. There is little incentive for anyone except senior managers in such companies to take any initiative or to try anything different from the norm. This model works well enough in low change and predictable markets, but those kinds of markets are not so common anymore.
The notion that some central person or group can do all the thinking for everybody else and tell them what to do and how to do (no matter how many fancy systems they may have) is fundamentally flawed. It is a quaint idea from the days when we thought that absolute monarchies or central dictatorships were the most efficient forms of government.
No amount of centralized reporting systems and computing power can adequately process the amount of data that needs to be processed in the short time frames now required. The answer lies in breaking up the data to be processed and the decisions to be made into many smaller jobs that can all be run simultaneously – this is swarming dynamics. It is similar to the concept used in the design of massively parallel computer networks (like the Internet itself).
Decentralized Coordination Replaces Centralized Control
Companies that employ decentralized control structures, that incentivize and train their people to think and act for themselves, and provide them with the real-time performance data they need to make good decisions will outperform their competitors. This is because people working in self-directed teams striving to achieve common performance objectives find hundreds of ways to make continuous small adjustments that increase their profits and decrease their costs every day, every week, every month.
These companies benefit from a continuous stream of efficiencies generated by many small, rapid adjustments as business situations change. They also benefit from profits gained by quickly responding to market opportunities as they appear.
Walk through any company; talk to people in the operating units; ask them if they know ways to make their activities more productive and ways to save more money. Ask them if they know ways to better serve customers and if they have ideas for new products or services that customers would want. In most cases people will answer yes to all these questions.
What would happen if senior managers gave people clear performance objectives and then got out of the way? What would happen if people received a constant stream of performance data from BPM systems that showed them the results of their actions and if they were effective or not. People would see if they were on track to achieve their objectives and they could act to get back on track when things went wrong.
How fast would people learn to act on their own initiative and be more productive, save money, increase customer service and offer new products and services? Would they soon learn to regularly meet or exceed the performance objectives given to them?
Organizational swarming behavior causes an organization to act as a single coordinated entity. An apt analogy for this is the human body; it can be seen as a swarm of cells that continually sense their environment and act on their own without waiting to be told what to do. Our brains are not aware of everything that our bodies are doing nor do they need to be; individual cells and organs know how to act on their own. And the overall effect of these swarming cells is to produce the coordinated behavior that makes our lives possible.
Unlike the slower and more predictable industrial economy of the 20th Century, we live in an unpredictable global economy and the best efficiencies come from swarming dynamics that make hundreds of small adjustments to respond quickly as situations change. Organizations operating like this are structured as networks of many self-directed operating units that respond quickly without waiting to be told what to do.
BPM systems provide people in these operating units with the real-time operating information they need. People know what their performance objectives are, and they have the training and authority that they require to act effectively. This is a powerful way to operate in high change environments.
It is a mistake to use BPM systems to merely strengthen traditional centralized command and control procedures. That usually produces the opposite of the desired effect, just as centrally planned economies actually produced less efficiency and productivity, not more. The real power of BPM systems lies in driving the organizational swarming of self-directed operating units. BPM allows them to monitor operations and learn to make their own decisions; just as individual companies learn to act in a free market; just as cells act in our bodies.
