Systems, Order, Entropy, and Chaos: Why it's So Hard to Keep Things Running Smoothly

The basic laws of the universe are fighting against your efforts to apply systems and order to your business.

Almost every company has made workforce adjustments in the wake of the recent contraction in the economy. This usually means fewer employees and doing more with less. Such is the case with my own company, and I find myself back in production more often than not. Frankly, I’m surprised by what I’ve found.

Having been in business for 35 years, I’ve overcome most of the randomness and chaos of the typical screen-printing environment—or at least that’s what I thought. For years I’ve worked on developing ordered systems optimized for maximum output and minimum costs. That’s what you’re supposed to be doing as a business owner. When you’re in the trenches everyday, it’s easy to experience the frustration of not getting everything done that’s on the schedule. Random, chaotic events pop up to interfere with and block your efforts. By working with controls and standard operating procedures (SOPs) the effort is to eliminate or at least minimize those random events.

Once you’ve established all of the SOPs, the next task is implementation and training of your employees to make them work. Finally, with training and systems in place, it’s up to the managers to actually manage the system to ensure maximum productivity and output. Targeted profit and a high percentage of machine utilization are evidence of successful implementation of SOPs. Things like minimum set-up times and limited machine adjustments are typical of the events being controlled. All of this is good and would appear to be pretty obvious.

But this is where things begin to go wrong. Systematic order is a transient or unstable state. In physics there’s a condition called entropy—the natural condition, usually applied to heat or thermodynamics, where the tendency is toward randomness or equilibrium. Randomness is defined here as the state under which no one body influences another. Entropy in an information system is the natural tendency to move from order to disorder. The ultimate result is chaos.

Systems and order require effort and energy on our part to establish and maintain. This is no surprise. Most of us have been involved in the creation of systems within our own businesses. Some are complex and integrated, developed over long periods of time, and require ongoing monitoring and maintenance to keep them efficient. The amount of energy necessary to implement a system depends on how much inertia (resistance to change) exists within the organization. If you’re trying to implement a new technology, this can be a huge problem.

But let’s concentrate on the everyday types of systems common to virtually every business. These are the workflows and internal procedures that we use each day to get our work done. The more we tend toward maximum efficiency, the more difficult it is to maintain ongoing order within the system.

What I’m getting at here is how hard it is to maintain an optimum state within any organization. When a system is implemented, refined, and optimized, we’re positioned for two things. The first is maximum profitability and the second is increasing growth. Both are at the heart of any capitalistic model. Without growth we stagnate. Growth is the basis for expansion and the creation of greater profits. In light of the recent financial debacles, there are serious questions about whether growth is real or fabricated in the form of the now famous Ponzi scheme, but let’s leave that for another discussion. Let’s assume we’re talking about real growth for which we can be responsible.

Our internal systems evolve over time. As our businesses grow, our systems change and adapt. As we hire more new employees and managers to handle the greater workload, we make adjustments to the systems to compensate for new job responsibilities and capabilities. All of this is fine and good as long as we’re expanding. What happens when it all comes to a screeching halt and we go from expansion to stagnation to contraction? This is where it gets very ugly fast.

We’re talking about disruption at this point. When any organization downsizes in relation to the workload or demand, the internal systems are torn apart. This is the point at which we accelerate the natural tendency toward chaos. The seriousness of the situation is masked by the obvious nature of having to do more with less. It’s easy to blame less than optimum output on the fact we no longer have Bob in shipping or José to handle the teardown and reclaiming of our screens. Our internal contraction results in new job responsibilities for those left doing the work.

It’s most often the case where the newest hires are the first to go—the logic being they are the least experienced and most expendable. Who remains are the senior or veteran workers. They are the most knowledgeable and adaptable. They are the employees who can handle multiple tasks with the skills necessary to survive. But what happens when management makes the decision to cut the more expensive workers who appear to be doing less than their fair share?

As the business has expanded, the more experienced workers are doing less and less of the physical work and are acting more to assure the systems in their areas are working to their maximum potential. They’re attuned to this process. They may not even be aware of how their jobs have changed over time. With disruption of the existing systems, owners and managers face more than just an increase in workload.

The changing nature of how things get done is a natural evolutionary process. The danger of this kind of evolution is that it’s often empirical. This means change evolves based on observed events. A new ink system doesn’t print like the old one. Setups are adjusted to compensate. Meshes and tensions may be changed. These actions often happen on the fly and are communicated only to the people who are directly affected by the events.

This is only one example. We do this over and over again everyday, over long periods of time. What’s really going on here is our continual battle to maintain order against the natural events leading to chaos. We’re not even aware of it. We just do it. Then the major event occurs that fundamentally upsets whatever order we’ve been careful enough to preserve. Our current economy is such an event.

 

Owner involvement

As managers and senior employees are thrust back into the production environment, the natural tendency is to go back to what they know—what worked when they were on the floor. Guess what? It doesn’t work that way anymore. Too many things have changed. Documentation wasn’t maintained. People have come and gone, and so have the stable methods. Reliance on that’s the way we’ve always done it simply does not work.

So, in an effort to save money and reduce costs, the entire ecology of the company grinds to a near halt. Instead of experiencing a 30% drop in efficiency with a 30% reduction in the workforce, the real consequences are much more dramatic. The company can become almost dysfunctional. Mistakes start happening everywhere. Jobs get rejected. Deadlines are missed. Reputation in the market deteriorates. All that progress over the years seems to evaporate before our very eyes. On top of all this, frustration levels are higher than they’ve ever been and morale is low and getting lower.

This is the point where the owners often get directly involved in the process, like the White Knight to the Rescue. Depending on how involved the owners were previously, this can be a good thing or a disaster. Owners who are reasonably competent and capable can be a stabilizing factor in the sense that the remaining employees feel confident the owners can handle what’s going on. After a week or two of being on the floor, the full extent of the task at hand becomes clear.

Things have changed, that’s obvious. What was working isn’t as clear. There’s a state of general shock at the degree to which control and ordered systems are no longer functional. It’s easy to look for someone to blame, but that’s only an emotional response to the situation. There really is no one to hold accountable because of the evolutionary aspect of systems as I previously described. Productivity is what it is and the current situation is a new set of circumstances.

The ongoing success depends on how quickly you can get to the root of what really matters for a company at this new size. It means everyone has to look at every single task and responsibility and determine whether each is necessary at all. There’s a tremendous amount of redundancy that naturally develops over time. This is a great time to question everything. If it doesn’t add value to the company and the customer, stop doing it. I often ask if the task were itemized on an invoice, would the customer question the charge or accept it? While this is a bit extreme, it’s a good starting point to redefine our efforts. Simplify, simplify, simplify. The fewer +steps, the easier it is to control and teach to others.

 

Our goals are redefined

The extreme nature of the economy right now forces many of us to make changes and adjustments we weren’t planning to make. It’ll be a long time before business returns to the levels of the past few years. In the meantime, the objective is to survive—and survival means applying increased effort and focus to make order out of the evolving chaos. Established systems tend to degrade naturally over time, and now we’re faced with the accelerated deterioration.

I recently posted an update on my Facebook page about “finally getting off press after a long day.” A colleague commented that I should know better than to work in my business as I should be working on my business. I smiled and chuckled to myself at this observation, realizing at that point the full extent of what is really going on.

 

Mark A. Coudray is president of Coudray Graphic Technologies, San Luis Obispo, CA. He has served as a director of the Specialty Graphic Imaging Association Int'l and as chairman of the Academy of Screen Printing Technology. Coudray has authored more than 250 papers and articles, and he received the SGIA's Swormstedt Award in 1992 and 1994.

 

 

 

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