Socially Constructing Warships — Emergence, growth & senescence of a knowledge-intensive complex adaptive system William P. Hall President Kororoit Institute Proponents and Supporters Assoc., Inc. - http://kororoit.org Documentation & Knowledge Management Systems Analyst (Ret.) Tenix Defence [email protected]http://www.orgs-evolution-knowledge.net Access my research papers from Google Citations Melbourne Emergence, 11 June 2015
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Socially Constructing Warships —
Emergence, growth & senescence of a knowledge-intensive complex adaptive system
William P. Hall President Kororoit Institute Proponents and Supporters Assoc., Inc. - http://kororoit.org Documentation & Knowledge Management Systems Analyst (Ret.) Tenix Defence [email protected] http://www.orgs-evolution-knowledge.net
Tenix Defence’s $7 BN ANZAC Ship Project was the most successful Defence Project in Australian History
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Late 1989-2007 built & delivered 10 modern frigates – 8 to the Royal Australian Navy – 2 to the Royal New Zealand Navy – Different customers, different languages, different systems – Plethora of engineering changes affecting everything – Stringently fixed price contract & delivery schedule – Required to achieve 80% Australia/New Zealand content – Fixed acceptance dates, major penalty/warranty clauses
How is ANZAC’s success measured? – Every ship on time – No cost overruns – Healthy company profit ! A success by any standard! – Happy customers
Tenix auctioned its Defence assets in 2007 because it could not complete a $500 M project for New Zealand
– Failing to learn from Australia’s most successful defence project
Autopoiesis (Maturana & Varela 1980; see also Wikipedia) – Reflexively self-regulating, self-sustaining, self-(re)producing dynamic entity
– Continuation of autopoiesis depends on the dynamic structure of the state in the previous instant producing an autopoietic structure in the next instant through iterated cycles ()
– Selective survival builds knowledge into the system one problem solution at a time (Popper 1972, 1994)
By surviving a perturbation, the living entity has solved a problem of life
Structural knowledge demonstrated by self-producing cellular automata emerging in toy universes
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What makes a system living?
Constraints and boundaries, regulations determine what is physically allowable
Autopoiesis may develop at several levels of hierarchical organization
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Economic organizations may be autopoietic
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Slide 21
Information transformations in the living entity through time
World 1
Living system Cell
Multicellular organism Social organisation
State
Perturbations
Observations (data)
Classification
Meaning
An "attractor basin"
Related information
Memory of history
Semantic processing to form knowledge
Anticipate, predict, propose Intelligence
World 2
Hall, W.P., Else, S., Martin, C., Philp, W. 2011. Time-based frameworks for valuing knowledge: maintaining strategic knowledge. Kororoit Institute Working Papers No. 1: 1-28. (OASIS Seminar Presentation, Department of Information Systems, University of Melbourne, 27 July 2007)
A knowledge-based social network beginning to form an organization
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"Faces" correspond to people/actors in the environment. a. A "human attractor" seeking knowledge to address an organizational imperative or need. b. Other seekers socially transferring knowledge relating to what the "human attractor" seeks to know for the
benefit of the emerging organization. c. Other actors not connected to the seeker's current interest. d. A knowledge transfer between individual actors. Line weights indicate strength of the connection. The open vertical arrows indicate the possibility that the community may assemble and generate knowledge that will be valuable in addressing organizational needs
Nousala, S., Hall, W.P. 2008 Emerging autopoietic communities – scalability of knowledge transfer in complex systems. First IFIP International Workshop on Distributed Knowledge Management (DKM 2008), Oct, 18-19, 2008, Shanghai.
Coalescence of a community of interest (CoI) around a "human attractor"
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The human attractor seeks knowledge to solve organizational needs addressing high level imperatives and goals. Smiley faces represent people/actors receiving organizational/social rewards for helping to address the need. Such rewards reinforce the individuals' involvement. Open vertical arrows indicate the value/importance of the assembled, ordered and directed knowledge in addressing higher level organizational requirements. The light dotted line surrounding the attractor’s network indicates that participants and others begin to see the network as a specialized community addressing particular needs.
Stabilization around a human attractor and emergence of processes within the stabilized community
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Dashed arrows represent control processes. Solid arrows represent knowledge production processes. Knowledge about how to form and sustain the organization is still emerging. a. Organizational facilitator. b. Emerging boundary surrounding the organization by those who identify themselves as participants in the
organization and others in the community. c. Faces crossing the boundary are people in the process of being recruited and inducted into the community.
Achievement of dispositional autopoiesis, where self-supporting practices have emerged
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a. grey faces - monitoring processes providing feedback control to maintain and sustain the community. b. white faces – involved in production processes delivering a product to the broader organizational environment. c. product quality control cycle provides corrective feedback to the production process. d. induction process recruiting new individuals into the community to satisfy new needs and to replace attrition. e. environmental monitoring to feed observations into monitoring and control process. Note, this evolutionary stage still depends on tacit routines and tacit knowledge/acceptance by individual participants of their learned roles in the routines.
Semiotic autopoiesis – objectified and documented practices to form and maintain the organization
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Grey faces – those following codified knowledge (a.) about how to manage internal and external monitoring processes providing overall feedback control. White faces – those following codified knowledge (b.) about the production process. Black faces – those following codified knowledge (c.) about the product quality control cycle. d. codified knowledge about induction process recruiting new individuals into the community to satisfy new needs and to replace attrition. e. codified knowledge about environmental monitoring processes. f. codified knowledge about how to establish and sustain the community itself.
Marine born in 1988 as an innovative new organization soon acquired by the family company
Eglo Engineering with Dr John White lobbied to start Submarine project & joined a failed bid to win the Collins Class contract
In 1986-7 Eglo formed AMEC as a publicly owned consortium with ICAL, & (W) Australian Shipbuilding Industries to bid on pending ANZAC Ship project
– Late 87 AMEC won bid to privatize dysfunctional Williamstown Naval Dockyard in competition with private Transfield Defence Systems
1988 Transfield acquired all AMEC stock and renamed company to AMECON in early 88, retaining some staff from Eglo & Ical
Under Dr John White AMECON closed Dockyard – Terminated all existing Dockyard labor & management staff
– Established & assembled new dockyard staff With ACTU agreement, replaced 23 unions, 30 awards & 390
classifications with 3 unions and 1 award and 2 classifications
Rehired selected dockyard people of “good reputation” and many years of living knowledge
Defence systems started with the “Marine Division”
High turnover (generally < 3 yrs) in Williamstown senior mgmt – Hired to manage specific project phases
– No tolerance for “mistakes”
– No opportunity to learn corporate history or “on the job”
– Once the work was mobilized, senior management contributed little to effective workings of the ANZAC Ship Project (“ASP”)
[Marine used as cash cow to support acquisitions]
Engineering, technical and production staff were “body” & “mind” – Plenty of 10 & 15 year pins (e.g., select staff rehired from WND)
– Proud/excited to be designing, building & supporting Australian ships
– Major family turnouts to watch their ships being launched
– Worked and often socialized as teams
– Actively worked to understand what the Contract required
– Made mistakes, identified problems and solved them
– Worked very long hours to ensure project success
Large component of self- and emergent-management 34
Unique aspects of the ANZAC Ship Project Contract helped to determine how the organization worked
Client project authority was bi-national (nationally variant ships) Contract specified capabilities to be delivered not specific
products/systems 80% Australia /New Zealand Industry Participation by value Foreign (German) design to be engineered & built in Australia Fixed price contract (1989 $ with escalation) / fixed schedule
– Ships & systems – Shore based simulators, & complete ship crew training package – Maintenance knowledge and logistic support costs
Complete technical data / operational and maintenance documentation deliverables
Warranty requirement to prove over 10 ship-years that ships were operationally available (AO) at least 80% of time
– Major test of design, engineering, training, maintenance knowledge – Tenix required to develop acceptable methodology to prove this
Major liquidated damages for schedule milestone breaches 35
Problem areas requiring research, development & deployment of specialist knowledge
Solved major problems & issues largely unique to defence proj. – Engineering subcontracts fully reflect prime contract obligations – Acquisition of required IP from system subcontractors to build,
document & maintain ships – Modular construction with dimensional control methods/technologies – Welding technologies & training – Contract amendment & subcontract management – Cost & schedule control & reporting – Inventory mgm’t & tracking (Project Authority takes ownership of
most stuff when delivered on site) – Configuration management for tracking engineering change control – “Issue 4” Safety critical documentation authoring & management
must track eng. changes throughout ship lifecycles – Both human maintainers and computerized maintenance
management systems must understand safety-critical tech data/documentation
Problems identified and managed locally – Internal solutions and innovation / Locally managed R&D 36
Senescence and demise
Executives never seemed to understand organizational imperatives for their own company
What are “organizational imperatives”? (my usage differs) Things the organization must do successfully in order to continue its existence and flourish in its real world physical, environmental, and economic circumstances.
– Imperatives depend on the nature of the organization and its environment
– Imperatives exist independently of executive beliefs, strategies, goals and mission statements – physics always trumps belief
– Organizations failing to satisfy their imperatives in one way or another will not thrive and may fail
Imperatives for an engineering project manager (e.g., Tenix) – Qualify and win suitable contracts (find customers)
– Successfully complete contracts won (satisfy customers)
– Anticipate perturbations to ensure overall operational profitability
– Maintain workforce able to anticipate and address imperatives
– Comply with health, safety and environmental standards
– Comply with governmental regulations
– Satisfy all of the above imperatives
Don’t divert effort/resources to activities that don’t address imperatives 38
First imperative: Tenix Defence never learned to reliably win contracts
Never understood the power/dangers of electronic documents – Put MS Word in hands of contract engineers and typists who used
complex wordprocessor like a typewriter – Multiple authors worked on same electronic files w/o config control
Internal R&D project proposed to replace MS Word authoring environment with authoring & configuration management environment used in-house for ANZAC documentation
– Would have reduced bid cost/hours by more than 50% allowing resources to be applied to more/better crafted bids
– Support engineering (but not IS) had expertise to implement it – Payoff time a year or less or immediately an “extra” bid is won
Executives / F&A did not believe or understand concepts Only 3 bids won (including Protector) in 17 years after ANZAC Should have won Air Warfare Destroyer bid
– Tenix lost to ASC on a “value for money” basis – Scuttlebutt said that F&A had costed work not required in RFT
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Problems inherent(?) in the family business led to its demise in the third generation
All major ANZAC problems solved by 2001 acceptance of Ship 5 Strict command and control hierarchy was instituted under
closeout GM to squeeze last cent out of “serial production” – Most engineers “outsourced” to labor hire companies, hived off
to other divisions, or made redundant asap.
– Removed critical knowledge from company
– Destroyed self-organized autonomy
Construction industry bean-counting mentality – Executives were used to hiring/contracting standardized
management & trade skills on a project by project basis
– Management bonuses based on retrospective “Tenix Added Value” Rewarded for past successes, not for anticipating the future
– Staff not allowed to do anything not booked directly to a cost code against a particular contract work item Every half hour had to be accounted for in time management system
– Little thought or understanding of the value of unique personal knowledge, org. continuity & meeting organizational imperatives
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Serial production & closeout of ANZACs
Transfer of living knowledge blocked by isolating ASP serial production from other activities
– ASP behind security fence with swipe card access only
– Non ASP staff required GM signature to visit ASP staff
– Chatting around water cooler & coffee breaks seen as time wasting
Costly engineers/senior staff outsourced or given redundancy
IS decided to replace the working engineering KM syst – Navy selected TeamCenter as their PDM system for ships in service
Land’s MatrixOne solution was offered
Suspect selection – key Navy selectors became TeamCenter employees
– ASP chose TeamCenter because Navy was going to use it rather than Matrixone CMIS system that was fully operational in Adelaide
– ASP and IS spent millions trying to implement TeamCenter as shipbuilder system for ANZAC Ships Could not manage complexity of ASP
Still wasn’t fully working when Tenix Defence taken over by BAe Systems 41
The dead hand of absentee owners and Finance and Administration mentality killed the company
Owners & senior execs worked from Tenix Tower in Sydney – Isolated from all operating divisions (closest was Pukapunyal) – Minimal provision for interstate travel between divisions & HO
Centralized command & control hierarchy – North Sydney was a “black hole”: information in – nothing out – Long chain of command with poor formal delegation of decisions – Prior to 2001 many important decisions towards successful solutions
were made locally in default of / or even despite central authority.
Execs did not understand how to manage or value knowledge – Ignored findings of contracted KM audit, several consultants & CIO – Did not understand value of tacit or explicit knowledge
Finance & Administration mentality – Knew cost of everything, value of nothing – Sr mgmt bonuses based on retrospective “Tenix Added Value” – Information Systems a department under F&A
IS had little understanding/consideration of end-user requirements F&A would pay millions for hardware & software but little for
analysis & training 42
Tenix unable to successfully complete $500 M Protector