Mechanism Design for Total Quality Management: Using the Bootstrap

Algorithm for Changing the Control GamePetter Øgland

Presentation of thesisOslo, November 27th 2013

Tightly coupled complex systems in crisis: Climate, finance, technology

Control crisis and control revolution drives evolution of information society

Total Quality Management (TQM) is the applicationof SYSTEMS THINKING to organisation and management

80% TQM implementation failure

Explanation: ”FAKE TQM”The TQM standards industry (ISO 9000, CMM, etc)creates a global network of organised hypocrisy

What to do: ”REAL TQM”The organisation must break loose of ’false consciousness’ and liberate itself from the oppression of the hypocrisy

Three levels of TQM game play

Matching Pennies – zero sum quality control game based on having “real TQM” management commitment

Stag Hunt – trust game of doing “real TQM” or “fake TQM” depends on culture

Monopoly – mechanism design game

Controlling process improvement projects

Controlling the survival of the TQM programme

Controlling cultural change

Cultivating information infrastructure on a mission to “conquer the world”

The Health Information System Programme (HISP) controls and expands itself as a network of research and development across the world

In the Monopoly game the players control and expand their assets as a network of real estate trades and developments across the game board

Thinking about the Bootstrap Algorithm (BA) as a Monopoly strategy

Start withsimple, cheap, flexible solutionsmall network of users that may benefit significantly from improved communication with each other onlysimple practicesnon-critical practicesmotivated usersknowledgeable users1.Repeat as long as possible: Enrol more users2.Find and implement more innovative use; go to 13.Use solution in more critical cases; go to 14.Use solution in more complex cases; go to 15.Improve the solution so new tasks can be supported; go to 1

Hanseth & Aanestad (2003)

RH: The BA is an optimal mechanism design for implementing TQM

• RH1: The BA can be implemented and managed in a state of statistical control

• RH2: The response to the BA treatment is performance measurable by TQM assessments

• RH3: The BA is optimal for implementing TQM in complex environments

Canonical Action Research (CAR)

• The research process was not originally designed as CAR, but CAR is useful for explaining how things were done

• Twenty years of TQM implementation by trying to bootstrap the information infrastructure

• Three cycles (DNMI + NTAX + NTAX/UiO)

First cycle 1992-99: Det Norske Meteorologiske Institutt (DNMI)

• Diagnosis: Complexity made project management based on water-fall model unsuccessful in developing Climate Database (KLIBAS)

• Treatment: Complex adaptive systems (CAS) was used to define a BA that proved successful for developing and improving KLIBAS in the context of TQM implementation

• Outcome: Formulation of BA and experience from using it

Second cycle 1999-2005: Skatteetaten (NTAX)

• Diagnosis: Strong elements of “fake TQM” in a world of bureaucracy, politics and complexity

• Treatment: The BA approach developed at DNMI was able to change “fake TQM” into “real TQM” but ultimately failed

• Outcome: Need to investigate why the “what gets measured gets done” idea, as used in the BA design, did not give expected results

Third cycle 2006-2011: Collaborating with UiO for creating change at NTAX

• Diagnosis: The “what gets measured gets done” idea did not work among COBOL programmers at NTAX as there was lack of management commitment to TQM

• Treatment: Improve the audit process by being more specific in the formulation of the audit game, which helped, but in the end the process failed

• Outcome: The importance of having game theoretic representations of the social theories used when studying BA through action research

BA stability hypothesis (RH1)

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Improvement projects Process centreUpper Control Limit Lower Control Limit

THIRD CYCLEFIRST CYCLE SECOND CYCLE

BA impact hypothesis (RH2)• By understanding the QMS

information infrastructure dynamics as Monopoly, the impact of the BA depends on how well it works as a Monopoly strategy

• Property trading: Hamlet game, Pac-Man game, “what gets measured gets done” game, self-protection game

• Property development: Deconstruction game

BA optimality hypothesis (RH3)• The BA can be

interpreted as an optimal Monopoly strategy as optimality is a relationship between the BA and the mathematical structure of the problem (Albertos & Mareels, 2010, p. 270)

• The BA design used in the study was not optimal, but redesigning it with each failed cycle made it continually better

By following optimal strategy it should takeabout 25 years to implement TQM at NTAX?

0100200300400500600700800900

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EFQM scoreLogistic regression curve

Contribution to knowledge 1:Monopoly as a model of II dynamics

Old knowledge

New knowledge

Kernel theory

Kernel theory

Contribution to knowledge 2:The BA as a Genetic Algorithm (GA)

Old knowledge

New knowledge

Kernel theory

Design theory

Design theory

Contribution to knowledge 3:Use of game theory in action research

1. Diagnosis:Phenomenological attitude

3. Testing of treatment : Positivist attitude

2. Finding a treatment : Mathematical analysis of the game model

Implications for practice

Matching Pennies – zero sum quality control game based on having “real TQM” management commitment

Stag Hunt – trust game of doing “real TQM” or “fake TQM” depends on culture

Monopoly – mechanism design game

Controlling process improvement projects

Controlling the survival of the TQM programme

Controlling cultural change

FAKE TQM

REAL TQM

The BA is important

• It should be more well-known• It should be subject for further research

Understanding the world as a complex system

Using the BA as control strategy