lgraberg-blog

[lgraberg-blog]

Online service in offline modus

DPI 671M / Harvard Kennedy School / Assignment 1 due 26th March

Norway has three administrative levels: The Government, counties, and municipalities. About 10 years ago I was going to build a garage in connection with our home. In such cases, we shall relate to our municipality. In order to apply for a permit to set up a garage, there are many rules that apply. I, therefore, applied for this information on the municipality's website. The website front page consisted mainly of:

- some news articles about the municipality

- links to the various departments in the municipality

- a site map

- an alphabetical overview of some services with associated electronic forms

The site lacked a good search engine, so it was expected that I would find information by navigating myself. Since I didn't know which department was responsible for garages, I had to look through the various departments. Eventually, I found a link to some documents that described drainage and other tips related to building the garage. I did not find the information I was interested in:

- What requirements apply to set up a garage (distance to the house, neighboring property, and municipal road)

- How I proceed to apply

- How long the expected processing time is

- If I can start building before the application is formally approved

It ended up having to call the municipality. After talking to the switchboard, I was transferred to the correct department. They could then set me up for an hour with an advisor to go through such an application process.

The impact it had on me

I got an appointment the following week. Since the agreement was during the daytime, I had to get out of work. During the 30 minutes of talk, I got answers to the questions I had. I also received a hard copy of the application papers for the garage, and guidance on where the form was stored on the web page. I found it frustrating to spend a lot of time on a relatively simple process. It also turned out that if I built less than 50 square meters then I could use a simplified form. This type of information had been useful to be presented to me on the website. Although the municipality has all the information they need about me, I had to fill in all the information manually. Even the municipality's internal numbering of land numbers and house numbers I had to find out myself. It was also unclear what was the correct utilization of our plot. I had some old papers that said 13% but got to know from the municipality (via another phone call) that it was 20%. Such type of information should be pre-filled in an electronic service.

 The impact it had on my perception of the organization

We had recently moved to the municipality, so this was one of my first meetings with the municipal services. (Admittedly, we had just moved from Belgium and were not really used to electronic solutions. Belgium had a terribly ineffective system). I also got the impression that it was an unnecessary load on the employees because people did not find the information on their own on the web. This might leads to longer processing times.

The municipality's website was built around the organizational structure of the municipality and was not built up to help me as quickly as possible in the myriad of information. I, therefore, got the impression that the website was not built primarily to help me.  I do not think that the municipality has conducted user surveys to investigate whether the websites are good enough.

Hypothesis why I think the organization did not execute well

My impression was that the bureaucrats who worked in the various departments did not have any incentives to simplify these processes, as this was their job. Not everyone wants a simplification of public services. What struck me was that the municipality had several other good digitized services. For example, an application for kindergarten space went through completely electronic. No papers. This means that the organization had the capacity to build such a service.

That said, a simplified application process would require coordination to create an electronic wizard. The Planning and Building Services Department determine the utilization rate on the plot and approval of the location of the garage, The Water and Wastewater Department decides how we will handle surface water and the Road Administration Department had requirements for turn space on my own site and that we could not drive the car directly from the garage and out on the road (one must be able to turn on your own plot). Such coordination between departments can be demanding, and it quickly becomes a discussion about who is to bear the cost and who gets the benefit of such a change. The answer should be the inhabitants, but I think the municipality may be more concerned about the profit sharing internally.

The municipality has probably not designed the website with the user in focus. It should have been more clearly separated between:

- information to residents and

- information that the citizens will find themselves.

The 80/20 rule applies here as in other places I guess - 80% of the citizens want access to 20% of the information. Generally, much of the web information is often outdated and incorrect and it is difficult to find relevant information. This can often be due to the fact that it is unclear who has the main responsibility for the content. There should be a person who has an overview and who has the authority to decide what to publish and not.

[lgraberg-blog]

Procter & Gamble – What’s next?

<based on the situation for P&G in 2005>

I’ve no experience with an international company at this scale, but I found the case very interesting. Therefore, I chose to write a reaction paper on this case. The company has been in the game for almost 150 years and gone through several major changes as they grew to be a global company. But – competing today cannot be compared to how it used to be. Even if P&G often have been a first mover, they have struggled after they implemented the global matrix organization, which didn’t become the success they aimed for.

The new CEO Lafley has to make up his mind if the company is on the right path. The previous CEO, Durk Jager, wanted a shift towards more exploration of new products. One of his goals for the organization was increased focus on new products based on new technologies. I think P&G were too optimistic about growth from the very first beginning, and they should have been clearer to the market that the most probable outcome was reduced growth in a short period. The upfront argument should have been a repositioning with implementing new technologies. They ended up with blaming different aspects afterward, to which the market punished them for with reduced stock value. They might not choose to have an optimal organizational structure.

For the near future, I don’t think Lafley should dismantle the structure totally because they have an organization that is well aligned for running the daily business. P&G has often been a first mover and has a strong culture delivering products that people need. With increasing competition in an increasing, large market (population is increasing), they need to understand the mindset of their minor challengers. My immediate thoughts are that the new CEO should make a clear distinction between:

- The operations including exploitation of improvements of their products - Exploration of new products

Many companies have faced problems with introducing new products. It is hard to stop producing things where you have good revenue. There is often a lack of incentive, and the salary for managers in the production chain is often related to short term profit. This can hamper organizations to disrupt their own golden calves. P&G should, alternatively others will do it for you. Just ask Kodak, that made the first digital camera, but had “too high” revenue on the elderly technology. Based on this and several other cases, an increasing number of companies has adopted an ambidextrous design. Ambidextrous organizations were first described in an HBR-article[1] by O’Reilley & Tushman. In this article, they wrote: “…organizational separation through a tightly integrated senior team. We call these kinds of companies “ambidextrous organizations,…..” The secret is to create organizationally distinct units that are tightly integrated at the senior executive level. By separating exploration from exploitation you can control the implementation of new, often disruptive, products at the CEO level. Therefore, I’d recommend adding a New Product Business Unit, with a disruptive focus, solely for this purpose.

I don’t know the product specter of P&G well, but with the wide range of product categories, they might not have mutual interdependence between the different product categories. They might, therefore, consider splitting the company into several independent companies under the umbrella of P&G group. The group will provide an effective supply chain and several other large scale effects. This fits well with my second concern for P&G: They are vulnerable when they operate alone. They are a hierarchy operating in a market. Democracy or communities as described in “Superminds” might not be organizational structures that are suitable for P&G, but they should open up for the ideas described as an ecosystem. P&G is one of the big players, and it will be attractive for other minor companies to gain mutual benefits with partnering with P&G. This might solve several problems. P&G group level can, as I mentioned, still own the supply chain organized via SAP, but other organizations might do distribution far more effective. By inviting partners, they might also increase the innovations rate, if they choose to include them in this arena. They should. A splitting of the company can fit well in an ecosystem mindset like this.

Summarized:

Lafley should continue with the main structure of the organization, but make an additional unit that reports directly to the CEO that is responsible for new (disruptive) products. In the next step, he should consider making an ecosystem around P&G. This might enable them to change the structure by splitting P&G into several minor companies, ensuring increased efficiency and increased innovations rate.

[1] https://hbr.org/2004/04/the-ambidextrous-organization?autocomplete=true

[lgraberg-blog]

Decreased cost of communication as the enabler for increased flexibility

Looking at the current situation in the world related to human evolution over the past millennia contributes to a macro perspective that easily enables an understanding of today's accelerating technological development. This perspective makes the book "The Future of Work" to an important contribution to understanding where we are and what direction we can choose to go. I think Clifford Stoll, in his article "Why the web won’t be nirvana[1]" from 1995, expressed that frustration and uncertainty that many had in the 90s. I guess that he would have enjoyed reading the book “Future of Work”, which admittedly was published a decade later.

For me it was a mind-blowing experience, while reading the book, to realize the fact that the cost of communication is one of the main factors that can explain how humanity has developed from a very decentralized structure through a continuous centralization with its peak for approximately 250 years ago. Since then we have had a slow, but the clear trend towards decentralization. That said, among the conflicts we see in the world today there are few if any, traditional wars between countries. The war on terror might be in the grey zone, but except that the conflicts we see today are civil wars. Some of these are due to a continued decentralization process. Examples from Europe are the Catalonia area in the northeastern part of Spain that wants separation from Spain and the people of Corsica island who wants separation from France. Even if some experience the world today as unstable, the truth is that we live in the most peaceful time ever. This is partly due to (increased) trade between the countries, which in turn is made possible through technological solutions based on decreased communication costs.

There are of course clouds on the horizon with the negative developing atmosphere between the US, Russia, China, and North Korea… As “Future of Work” rebuttals there has been a prevailing trend throughout history: “Falling communication costs made bigger organizations possible”, due to the two obvious advantages that larger groups were:

- better at producing "economic" goods

- better at fighting

Many still think the future battle is about occupying land, as our ancestors had to struggle with. It might be, but the new battle is also about concurring “land” in the virtual space. Will we see the same mechanisms and development in the virtual space, as we did in our real world? I leave this section with a question mark.

AI and robotization will continue as emerging trends precisely because this will lead to what has been an important driver for people over the past 200 years: Increased degree of freedom, and thus flexibility. In other words, the trend pointed out in the book will only continue due to the assumption that the cost of communication will still decrease.

Not all of the world's population is fortunate to have access to the Internet to the extent that well-developed countries have. The prices for both hardware (laptops, tablets, and smartphones) and transmission costs are all decreasing, and for me, it seems that the more digital mature a nation is, the lower is the level of communication costs. The share with access to smartphone aged 9-79 in Norway in 2017 was 91%[1], and 94%[2] of the same group had a computer at home.  Norway is known to be an expensive country to live in, but the cost of electronic devices and broadband data connectivity is among the cheapest I’ve seen.

Last year I got fiber cable installed in our house with a capacity of 500 mbit / s (!). When I leave home, I am automatically connected to the 4G LTE network at a speed of 30 mbit / s, which is enough to watch the news, sports broadcasts and listen to podcasts and music streaming. Even with Norway's geographically demanding landscape, we have a 4G coverage of 99.8% (and people actually book in the strangest places). Only in a few remote areas, you can hide ;-)  Today I pay less than $30 for 75 GB of data via 4G per month. That was unthinkable for just a couple of years ago. But the most interesting change, in my opinion, is that “over night” it was made possible to use the same data plan in the whole EU (European Union). I address my greatest thanks to the competition authorities in the centralized (!) organization of the EU in Brussels. This is an example of a centralized organization that enables increased competition and further lower communications costs. I can now use my Norwegian 4G subscription during my two weeks summer vacations in Europe, and it makes it much easier to interact with Europe while traveling the rest of the year as well.

In addition to lowering communication costs, the trend is enhanced by increasing communication quality. These changes enable flexibility. The book «Future of work» also raises the importance of values. The vast majority would prefer a flexible job and employer, rather than the opposite. Many Norwegians do actually have a flexible work situation and prefer to work remotely from their hut in the mountains if they can. They have a choice. I guess this is as effective as working at the office, especially Fridays. Many Norwegians choose this nowadays, and the trend is increasing. Those who have the opportunity to travel to their cabin on Thursday night enjoy a nice ski trip in the evening. Working remotely Friday, and then go skiing right after work and throughout the weekend. During the weekend, I guess they are "in mode" feeling happy and lucky. Then you do not need yoga or cohabitation therapist - this is a real work-life balance for many Norwegians. Other countries have other prominent values, and the point is that a connected world with communication costs down to zero will give people the basis for enormous flexibility.

Another example from my employer; The Norwegian government. Following the bombing attack at the government quarter on July 22, 2011, which caused major damage to the government building, a new design of new government buildings is finally ready. To many people's surprise, solutions with fewer office space than the number of employees are being built. Some employees are traveling, some participate in external meetings, some have a day off, but the most important basis for such a choice is flexibility. These choices from the Norwegian government facilitate a flexible workplace, seen in relation to when you are in the office and where you actually sit when you are at work.

  Such a fundamental change with the increased degree of decentralization requires a cultural change. It's about how we look at management and leadership, mostly the ladder, with a basic belief in a Y-human view according to the categorization developed by MIT professor Douglas McGregor in the 60s. With a Y- human view, you believe that your people take pride in their work, and choose to work, not because they have to but because they want to.

I believe the idea behind distributed leadership, which is alien to many cultures today, will be seen as a natural element in future, globalized and national, organizations. Labor should not be used to perform mechanical tasks, but to add value through intelligent collaboration. I have the belief that we are developing a suitable use of machines in the future, and that humans will secure mechanisms that keep the development of AI in an appropriate direction. Machines will augment man, rather than replace man.

[1] http://www.medienorge.uib.no/statistikk/medium/ikt/388

[2] http://www.medienorge.uib.no/statistikk/medium/ikt/251

[3] https://www.newsweek.com/clifford-stoll-why-web-wont-be-nirvana-185306

[lgraberg-blog]

FLEXUS – The efficiency project that became a wound in the cityscape with political consequences

The way to hell is paved with the best intentions, but  if you automate a mess you get an automated mess.

<This blog is an assignment in the class DPI 670M at Harvard Kennedy School, where I am a student in the springsemester 2019>

Picture: https://www.tu.no/artikler/vil-heller-ha-app-enn-flexus/246735

This is a brief review of a digitization project that took place in Oslo, the capital of Norway, in the last decade. Due to major errors that prolonged the project for many years, they ended up spending $ 80 million on an obsolete solution.

The purpose of the project was to prevent people from taking public transport without paying a ticket.

The project goal was to replace the paper ticket with a common RFID Electronic ticketing system for all collective transporting in Oslo and its surrounding urban areas. This required common tickets and ticket validators.  At the larger metro stations in Oslo, physical barriers were set up in connection with the introduction of Flexus. It was estimated that about 80 percent of subway travel went to or from one of these stations. When a passenger reads a valid card, glass doors should open up and drop the traveler in - or out.  In this way, they should ideally ensure that everyone had a valid ticket and that registered traffic data was correct.This functionally is similar to the system Boston metro system has today.

The project was a collaboration between three parties that operated railways (NSB), the metro system and trams (Oslo sporveier), and busses and ferrys (SL), respectively. NSB ordered equipment from Swiss Ascom, SL from Australian-Belgian ERG and Oslo sporveier from Thales. This due to the situation that the various suppliers had expertise that best suited the various companies' activities.

Planned project period: 2000-2005

Estimated cost: 25 million USD (excl. Emloyee cost).

The prerequisites for the loan from the Oslo municipality were that the system should "build on known computer technology solutions" and that it was "proven with good experiences from elsewhere". In the application for the municipal guarantee, the equipment was characterized as "of-the-shelf".

In 2003 the project had spent 35 million USD (excl. emloyee cost).

In 2006, they decided to reorganize the project, and in Jun the new formal project organization was established.

Mid 2009: The project was partially implemented.

2011: The project was discontinued

 Money spent in the 2000-2011 timeframe:

71 million USD (excl. emloyee cost), which was almost three times the estimated cost.

The poor performance of the project resulted in political consequences, and it ended with a public hearing and distrust of the municipal leader in Oslo city.

So the question is – how is the even possible? How is it possible to struggle around in 11 years, spending a huge amount of the taxpayers money…… for nothing? Nobody would like this to be the end result - the way to hell is paved with the best intentions.

Picture: https://www.dinside.no/reise/oslo-har-fatt-nye-t-baneruter/60968306

Assessment of projects can be broadly divided into two main parts: the degree of product success and the degree of project management success (process). Eg. the opera house in Sindney. This was a disastrously poor project management process, but an incredible product success as a world-renowned landmark. The same cannot be said about the Flexus project. Unfortunately, the Flexus project failed on both of these axes.

Espen Eckbo is a famous Norwegian comedian. This video (only in Norwegian spoken language unfortunately) was made prior to a developer conference in Oslo in 2009. In the video he acts a developer who neither knows what the system should do, how the system is intended to be used or who his boss is. As he says in the video, "I'm not a religious person, but it's a miracle that I haven't been fired".

My main hypotheses in this blog are based on available information that I have acquired about this project. I have chosen to split these in two main areas with some sub-items:

Management

Project ownership and management

Communication

Competence

Technical issues

Dependency of legacy systems

Poor introduction testing

Lack of experience and ability to understand the complexity

Management

The various entities in projects with mutual dependence to each other need an overall joint decision-making unit. In this case, the three entities were supposed to cooperate, but did not have an overall responsible unit.

From one report, I could read that: "Because the collaboration became too difficult at first, one put the head in the sand and hoped it would pass. But it never does. It might just get worse and harder. The units wanted to protect their own systems, and no one has been able to impose the other on making changes”.

Strategic clarifications should be taken early, and overall strategic actors and stakeholders must be present in the process. In this project, the partners (the buyers) had different goals, and they had also ignored the users. One example was how they calculated the travelling cost for their customers. One unit had unit rates, the other had a zone system with 88 price zones and the last operated with distance tariffs. The lack of a capacity to make these kind of strategic choices was not built up as a part of the project structure, and therefore they used these as pre-requisites in the project. From my perspective, this led to an unnecessarily complex solution, rather than a simplification. It is important to be aware of such unused opportunities in a change project, especially in the initial phases. Dedicated resources with a mindset that questions the established system is a valuable capacity at this point. I think this was one of the core points that they failed, because it created a bad starting point which became decesive for further progress. They got a three-part, rather than a unified, approach. What if someone at an early stage had suggested another solution than the perpetual obstacles they chose? They could have been an early adopter of future solutions, and a reference for other cities.

Picture: https://www.aftenposten.no/norge/i/jdyaz/Flexus-er-doende---NSB-og-Ruter-vil-ha-egne-kort

The report from the municipal audit briefly concluded that the project was staffed with too few people and had too tiny expertise. According to Norway's most reputable and politically neutral newspaper, Aftenposten: “It seems that the project has sailed its own sea without central management, and that the project board did not receive information about the major delays”. With a too small staff in the project, as pointet out here, they also lack some exploring capability. Most probably they were stuck in a day-to-day focus to solve emerging problems.

Good meeting arenas and communication channels should have been created. This is always important, but especially in this case with three independent entities to interact.

Picture: https://www.vartoslo.no/etter-13-ar-fjernes-sperreportene-pa-t-banen-skandalesystemet-kostet-oslofolk-600-millioner-kroner/

Technical issues

The report from the municipal auditor makes major question marks on the project manager's and the project manager's technical expertise, and they question the realism of the project according to the limited resources that in the early phase should follow up and control the procurement. It seems like the suppliers got too much power and that the project management team never understood the extent of what was to be done. It may therefore appear that the project management has chosen to rely entirely on the suppliers. Trust is important, but at the same time one must be clear about what is the buyer’s responsibility and what is the supplier's responsibility. The buyer has money as a means, while the supplier has this as "target". And the opposite for the product itself. The buyer has the final product as the target, while the supplier has this as its means. This asymmetry is fundamental in a buyer-supplier relationship.

Out of order. Picture: https://bedrebillett.files.wordpress.com/2011/09/img_5071.jpg

Many projects that have failed, one has often oversimplified the problem and underestimated the complexity to be solved. This is reinforced by the quotation from the CEO in one of the co-operation units: “Adapting the “of-the-shelf” product was much more comprehensive than I had imagined”.

Picture: https://www.aftenposten.no/osloby/i/bKxq8B/Forventet-suksess_-men-endte-med-nedtur-Na-skal-disse-fjernes

The project also experienced emerging problems that pulled off project resources to solve adhoc issues.

As a following consequence due to the delays in the project, there were problems with the old paper-based machines, which according to the original plans had long been phased out. Some of the buses piston boxes had to be transferred to the trams, while bus drivers were referred to hand-stamp tickets and cards. It worked poorly during rush hour, and extra bad when one for a period lacked ink for the hand punches and had to let people run for free. "It is untenable and irresponsible to just see that revenue disappears by people driving for free. It is the pointless shop,” summarized the UniBuss director, who was responsible for 70 percent of bus operations in Oslo.

Cards, card readers and vending machines that have not worked have created additional problems with the introduction of the system. The annual report for 2011 states that "a customer-perceived uptime of readers of around 98%, and down to 92% on city buses, is far from acceptable."

In the autumn of 2010, they discovered that 30.000 cards, which had been in stock for too long, resulted in the inspectors not being able to read the information with their readers. By check, passengers with these cards got a fine and had to seek out the company themselves to prove their innocence before the fee was deducted.

All these events are examples that attract too much attention for the project, and need to be resolved immediately. With limited resources available, it is difficult to get sufficient progress in the project's main task.

The project also encountered adversity regarding testing the solution. Contract conditions were clarified in 2003, and the system was to be ready for trial operation in 2005. Tests were conducted, where the recipient accepted and signed the trial operation tests. The supplier Thales also assumed that the system was ready for trial operation. It was definitely not. On the contrary, it turned out that the whole project was in a critical phase. "It should never have been signed that the test of the system was successful in 2005" (CEO of Oslo sporveier).

Seen in retrospect, it is strange that they did not have a more professional test regime on a solution that should be used by the inhabitants of, and visitors to, Norway's capital. It does not appear that they conducted smaller tests to try out the solution in iterations. They have most likely chosen a traditional waterfall model. There is a high probability that the project's major challenges can be explained by this choice, where you are actually blind for much of the project period. (You actually know little about the product going to work).

In summary, we are left with the following:

Many units and different goals created barriers to the progress of the project

The tariff and zone structure remained unclear and the biggest problem

No responsible unit with overall responsibility

The users were not involved

The users' needs were not taken care of

They did not take passengers on advice and they did not take advice from the staff. It was the focus on income hedging.

If you automate a mess, you get an automated mess. Electronic payment is complex technology, but well proven. Problems with the technology were a consequence of the complex organization of public transport in the city of Oslo and the county of Akershus, including the complex tariff and the zone system

Postnote:

Five years after the access rafters were set up, they were still not used. In the autumn of 2011, both the barriers and the readers were disconnected, after passengers had been squeezed into the doors. Physical barriers can be a problem for evacuation of the stations by fire, accidents or the like!

Already in 2010 it was clear that the barriers would not be used. Only now (end of 2018, early 2019) do they start removing them, finally.

Today, the metro system is an open and trust-based system, where there is no need for barriers. The users are happy with a easy solution, and the vast majority of the traveler buy the ticket with the app via smartphone. This applies to both single trips and period cards. It is efficient and reliable. Effective random checks are conducted on a regular basis if the traveler has a valid ticket. It is still possible to buy paper tickets, but this is both more expensive and more demanding. The population of Norway is eager to use digital solutions. The solution works seamlessly between all public transport means, and the cost sharing is a software-based distribution solution. There are now two companies that cooperate. Train transport is handled by NSB (Norwegian state railways), and other public transport is handled by #Ruter.