Asking somebody to lead or manage without knowledge of variation in our opinion is like asking them to sail a boat without a rudder. That’s an observation based on 20 years of working with organizations and witnessing the effects of managing (or not managing) variation. We’ve been asked to explain some more about variation following our post Variation and a Playbook for Organizations and why it matters so much, so here we go.
Human behaviour, like other things in nature, is subject to some universal laws. If we are leading any kind of enterprise or organization, then we ignore these laws at our peril. Conversely, when we are aware of them we can leverage them, like using the wind to sail a boat. Variation is something that affects every human activity, whether we are aware of it or not. It’s constantly there in the background, and understanding it can mean the difference between success and chaos. We have to be able to tune in, hear it and do something about it.
So what is variation?
If we examined the arrival times of our colleagues to their work place every day, we would immediately notice that nobody ever manages to get to the office at exactly the same time. No matter how optimized their routine is, the arrival time is always different. The reason that prevents everybody from getting to work every day at exactly the same time is variation.
It’s impossible to standardize any process so that no variation occurs. Why? Because in nature there is a ‘variable’ called entropy that accounts for the variation associated with every process. The 2nd law of thermodynamics states that any “spontaneous” change in a “closed” system is accompanied by an overall increase in entropy. When water evaporates molecules are dispersed and tend to occupy the whole space, resulting in an increase of entropy. The entropy of the universe, for example, is always increasing.
Entropy is a measure of disorder, or randomness (variation) in a system. Any organization, or system, in its spontaneous evolution, is naturally affected by the increase of entropy (not to mention this author’s desk). The day-by-day repetition of simple actions at our work place will never be identical because of the natural increase of entropy. So if we don’t want entropy to take over the results we produce in our organization, we need to “see” the variation that’s affecting us.
Variation, leaders and managers
Let’s say it again: variation affects all aspects of our life, and all processes in an organization. It’s of profound importance to leaders and managers because, in order to exert their role, they must ensure a stable and predictable environment. Indeed, the essence of management is prediction. Let’s have a look at few key points we have to consider when we talk about variation.
Walter Shewhart was the first to have an intuition about this phenomenon, intrinsic to every process and system. We can define a process as a set of actions/activities that happen over time, following a rationale/procedure and aimed at a specified goal. Shopping for food at the market with our family on a Saturday is a process and so is the set of actions that get us to the office every day.
The variation associated with each action in the process is identified mathematically by its ‘variance’, whereas variation associated with the whole process is identified by the combination of the set of variances relevant to each action, which is the co-variance. As a matter of fact, processes inside an organization are highly interconnected and interdependent, and predicting the outcome of a sequence of events becomes very difficult.
That’s why we need to understand how variation is affecting our processes and we’ll be looking at that.
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About the Author
Angela Montgomery Ph.D. is Partner and Co-founder of Intelligent Management and author of the business novel+ website The Human Constraint . This downloadable novel uses narrative to look at how the Deming approach and the Theory of Constraints can create the organization of the future, based on collaboration, network and social innovation. She is co-author with Dr. Domenico Lepore, founder, and Dr. Giovanni Siepe of ‘Quality, Involvement, Flow: The Systemic Organization’ from CRC Press, New York.
Great reading Angela, thanks!
Thank you!