Mechanism design for total quality
management: Using the bootstrap
algorithm for changing the control game
Petter Øgland
Trial defence presentation
Oslo, April 8th 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 application
of 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
Controlling cultural change
Controlling the survival of the
TQM programme
Controlling process
improvement projects
Monopoly –
mechanism
design game
Stag Hunt – trust game of
doing “real TQM” or “fake
TQM” depends on culture
Matching Pennies – zero sum quality
control game based on having “real TQM”
management commitment
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 with
simple, cheap, flexible solution
small network of users that may benefit
significantly from improved communication with
each other only
simple practices
non-critical practices
motivated users
knowledgeable users
1.Repeat as long as possible: Enrol more users
2.Find and implement more innovative use; go to
1
3.Use solution in more critical cases; go to 1
4.Use solution in more complex cases; go to 1
5.Improve the solution so new tasks can be
supported; go to 1
Hanseth & Aanestad (2002)
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)
20
FIRST CYCLE
SECOND CYCLE
THIRD CYCLE
15
10
5
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
0
Im provem ent projects
Upper Control Lim it
Process centre
Low er Control Lim it
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)
2022
2018
2014
2010
2006
2002
1998
1994
1990
1000
900
800
700
600
500
400
300
200
100
0
EFQM score
Logistic regression curve
By following optimal strategy it should take
about 25 years to implement TQM at NTAX?
• 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
Contribution to knowledge 1:
Monopoly as a model of II dynamics
Core theory
Core theory
Old knowledge
New knowledge
Contribution to knowledge 2:
The BA as a Genetic Algorithm (GA)
Design theory
Old knowledge
New knowledge
Core theory
Design theory
Contribution to knowledge 3:
Use of game theory in action research
3. Testing of treatment :
Positivist attitude
2. Finding a treatment :
Mathematical analysis of the game model
1. Diagnosis:
Phenomenological attitude
Implications for practice
FAKE TQM
Controlling cultural change
Controlling the survival of the
TQM programme
Controlling process
improvement projects
Monopoly –
mechanism
design game
Stag Hunt – trust game of
doing “real TQM” or “fake
TQM” depends on culture
Matching Pennies – zero sum quality
control game based on having “real TQM”
management commitment
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