US HEALTHCARE:The January 2009 essay “The Healthcare System that Isn’t, but Could Be” has been revised. It now includes discussion of an enhanced case management approach to the delivery of disease treatment. Breakthrough results from a rigorous study funded by Medicare  and conducted by Health Care Partners are cited as an example of how patient-back designs can improve outcomes while reducing costs.

Case management is not new, but applying the principles of adaptive design to case management is new.  Case management is similar to project management in that it can be an early payoff entry point for Sense & Respond in very large and complicated enterprises.

A system design that incorporates education and prevention elements with disease management capabilities transforms disease management into health management. And the scalability of S&R makes the ultimate prospect of a National Healthcare System real.

Electronic technologies may well have as large an impact on how humans think, organize and manage as did the printing press and the scratch plow.  A paper delivered at IBM’s Almaden Research Center offers a perspective on this possibility.

The ability of Watson to win against the all-time Jeopardy champions was impressive.  But John Baldoni, senior vice president for technology and science at GlaxoSmithKline had an interesting insight two years ago as he watched Watson consistently come up with right answers faster. What “really impressed me,“ he said, “was that it so quickly sifted out so many wrong answers.”

A careful reader of the article will appreciate that the commercial payoffs described for Glaxo and others were due to more than Watson’s impressive technology. The choices made by humans about the categories and sources of data to be incorporated in Watson’s search were crucial.  These choices are presumably made by people in a decision-support role for other roles that will decide whether or not to act on those conclusions and recommendations.

Question: Is Watson also being used to support the decisions made by the decision-supporters?

The S&R prescription for role-specific “heads-up displays” is intended to promote just this kind of leverage. In theory there are an infinite number of decision-support level roles that could be “stacked” on one another. In practice, a second tier of Watson-enabled decision-support offers a potentially substantial boost in the quality of operational role decision-making.

Cebrowski reported to the Secretary of Defense. His mission was to transform the US military into a Network Centric force with the following capabilities:

• Massively distributed decision-making
• Local self-synchronization
• Shared situational awareness
• Speed of command

Project leadership was assigned to Navy Captain Linda Lewandowski (see her entry on the Expertise page). Lewandowski and Cebrowski decided that the managerial framework articulated in Adaptive Enterprise would be used as the conceptual underpinning of the project, and that the initial application would be to logistics. The project was  named “Sense & Respond Logistics.”

This is why behaviors that are becoming survival traits in the 21^st century are so difficult for industrial age enterprises to implement:  In the framework that explicitly and implicitly shapes the way industrial managers learn to think, they are dilemmas — behaviors that literally do not make sense.

Here’s a list of some post-industrial behaviors that don’t make sense in the old efficiency mindset, but do in the Sense & Respond framework:

• improvisation
• teams
• empowerment
• simple rules
• co-development of customer value
• markets of one
• fast prototyping
• real options

And here are some that make sense in the efficiency — but not in the adaptive — paradigm:

• strategic plans of action
• hierarchies of authority
• utilization and product quotas
• repeatable, definable, predictable processes
• supervising
• demand forecasting
• annual budgets
• optimization
• integrating existing capabilities and processes
• “line-of-sight” measurements
• value and supply chains
• matrix management

Calling for behaviors in the first list while adhering to the second list creates unsolvable problems for people in the organization. It is managerial malpractice.

Forno was definitely not the only frustrated IBM manager. Listen to CEO Sam Palmisano in a 2004 interview with the Harvard Business Review:

“…CFO John Joyce………. put together a deal for his account that involved some hardware, some software, and some services. He was told he couldn’t price it as an integrated solution. And he’s the CFO!”

IBM leadership, like that of many other large organizations, issued frequent and earnest calls for One Team, empowered, customer-centric, innovative and collaborative behavior. The incompatibility between what they were calling for and a management system that relentlessly defeated such initiatives was not lost on them, but was taken as a given to be somehow surmounted by managerial heroics. Internal conflict was built into the organization’s structure and reward systems. Yet senior management was truly shocked by an external consultant report of how much business was lost by internal debates over revenue and cost allocations.

Early on in his first S&R adventure, Forno tried something different at the first review meeting held by his new manager, the CIO of IBM’s Global Services Division. His colleagues, as usual, came prepared with extensive Power Point presentations  describing in detail the latest status of all the projects under way in their organizations.  Forno showed three slides: his new Reason for Being; his Governing Principles, and a Role and Accountability Design that graphically depicted each of Forno’s projects’ objectives, customers, roles and the commitments that linked them. Everyone in the room was impressed by the clarity with which Forno described his “Sense and Respond” organization, but very surprised when he sat down after showing three slides.

The CIO asked a specific question about the status of a specific development project, and was not amused by Forno’s response, “I don’t know. The project manager is very experienced and qualified,  so I’m confident things are on track. However, I will check with him if you want.”

At which point his boss told Forno in so many words that he was henceforth to report in more traditional ways. The Supervisory instinct was so deeply engrained in him it was simply unthinkable that a manager should not be aware in detail of everything important  going on in his area of responsibility.

So Forno decided to “go stealth” with S&R. His experiences and results are described in this paper.

The strategic battles among post-industrial sense-and-respond firms will be waged on the terrain of “anticipate and preempt.” Anticipate does not mean “predict.” It means “know earlier,” and is a diagnostic skill rather than a predictive skill.  For example, imagine going to a doctor because you have stomach pain. The doctor palpates, probes, and sends you to the lab for tests. During this process you are emitting signals that you can’t interpret, but the doctor can. Based on this interpretation the doctor informs you that you have appendicitis and need an appendectomy. Your physician is not predicting that you will need an appendectomy, she or he is telling you that you need one now.

Knowing earlier is a S&R core competence. It entails designing role-specific Heads up Displays  to enhance the speed and quality of decisions made by empowered decision makers, and investing in  methods and technologies that systematically and continuously improve the organization’s ability to make meaning out of apparent noise.

Similarly, “preempt” does not necessarily mean responding faster; it means responding more appropriately – which often requires speed, but always requires effectiveness. Modular, rapidly reconfigurable organizations; accountability for outcomes, rather than actions; a coherent design for the “games” with customers; and an architecture of the interactions between customer and supplier roles — these are prerequisites for systematic preemption.

Weick is a sociologist, but apparently physicists and mathematicians have long cautioned that data unsupported by an appropriate theory is every bit as bad as, and frequently worse than, a theory without supporting experimental proof. A recent example is a September, 2011 report by a scientific team that they had experimental evidence of neutrinos traveling faster than the speed of light.  This result has now been attributed to a “loose wire” in the the experimental apparatus. But another way of concluding it was bad data was to realize that there was no theory that could support that result, because the implications of anything traveling faster than light violated so many validated predictions of Einstein’s theory of relativity. In other words, the lack of an appropriate framework literally rendered the experimental result meaningless.

Cherry – picking data to support a bias is a well known practice that is rightfully scorned but rarely abandoned. Jumping to conclusions about the implications of new data before they have been associated with an appropriate model is equally prevalent, and equally dangerous.

Any system of any type survives only by successfully iterating through the adaptive Sense-Interpret-Decide-Act cycle. Without a framework interpretation is impossible and data are meaningless. Without an appropriate framework data are useless….and so are any conclusions and decisions drawn from them.

Accordingly, two S&R core competences are Knowing Earlier , which relies on expertise in designing and implementing role-specific heads-up displays; and Managing-by-Wire , which is required when the pace of change is too fast for human decision-makers to deal with absent technological support.