The elephant in the room – proving a negative in litigation

File:African Bush Elephant.jpgThe apocryphal story goes around that Ludwig Wittgenstein challenged fellow philosopher Bertrand Russell to prove that there wasn’t an elephant in the room in which they were sharing afternoon tea.

It’s a fairly self-indulgent challenge between intellectuals but it does highlight a feeling we’ve all had. It’s easy to prove that there’s an elephant there, if there is, by pointing to it. Proving that something isn’t there is more problematic. You have to point to everywhere that it isn’t.

Former Shell Legal Director Peter Rees QC recently observed that litigation and compliance are the most significant risks currently facing corporations. In litigation, defendants sometimes find themselves in the position of having to prove that something didn’t happen against an allegation from a claimant that it did. That always puts the defendant at a disadvantage. The claimant will give evidence of what they say happened. What evidence can the defendant give?

This asymmetry will be all the more keenly felt in England and Wales following the recent Jackson reforms to personal injury litigation. The former control mechanisms have been swept away and the Ministry of Justice believes that this is likely to result in more claims against businesses. Claims that would have previously been screened out will now be run because of the economics of the restructured claims environment. All my instructing solicitors are now confirming this to me.

Ironically, the instrument of this upwards pressure on claims risk is Qualified One-way Cost Shifting (QOCS). QOCS also pretty much prevents a business who successfully defends a claim from recovering legal costs against the unsuccessful claimant. In any event, legal costs are likely to be dwarfed by irrecoverable costs to the business from having key people distracted from the value-creating process.

All that means that businesses need to get better at stifling spurious claims at the outset. The twin keys to that are process discipline and record keeping.

It always saddens me when I have to advise businesses to settle doubtful claims simply because their record keeping was not capable of setting them up to rebut an allegation.

There are three principal elements to staying ahead of the game:

  • Ensuring that risk assessment identifies where record keeping would support the organisation’s narrative of prudent operation and regulatory compliance;
  • Implementing a system of process surveillance to foster process discipline; and
  • Building a document retention system that ensures that such a record can be interrogated to provide a compelling picture of conscientious management and risk mitigation.

A well designed document retention system is a key part of managing risks.

I find it instructive and encouraging that in Divya & Ors v Toyo Tire and Rubber Co. Ltd & Ors, Toyo Tire managed to persuade the court that it was very unlikely that a road traffic accident could have been caused by a manufacturing fault in their tyre.

I do not advocate rigorous process management as a net cost motivated by defensive operations aimed at providing a patina of compliance. That is not what succeeded at Toyo Tire. Rigorous process management reduces waste, improves socially recognised customer reputation and streamlines cashflow. Its potency in litigation is a bonus.

The truth behind takt time

A few months ago my wife ordered a hole punch from Amazon one evening. It cost £5.49. The following morning at 8.00 there was a knock at the door. The hole punch was delivered.

That really is as much as I know for a fact about Amazon’s business processes. I was, therefore, shaken by an item on BBC News alleging Amazon workers face ‘increased risk of mental illness’. I don’t think the quotes make that anything other than an alarming headline. The item trailed a BBC documentary The Truth Behind The Click. UK readers can see the documentary here on BBC iPlayer. I thought that I would wait until I watched the documentary before I commented.

Having now watched it, I think it is difficult to draw any conclusions from the programme. Its tone was so plainly tendentious. The BBC had sent a covert reporter with a video camera into an Amazon warehouse, he having misrepresented himself as a job seeker. Some of the video, taken from the perspective of an Amazon employee picking in a warehouse, looked to me as though it was shown speeded up.

Professor Sir Michael Marmot, an expert in public health, was shown the video, I presume the same limited and selective one shown on the BBC. He observed that:

The characteristics of this type of job, the evidence shows, increase the risk of mental illness and physical illness.

Sadly there is no analysis. We were not told what characteristics, what the supposed levels of safety or what the supporting evidence. There was no quantitative data drawn from more than one individual.

Part of the problem with the programme was, I think, that three principle issues have been conflated here.

  • The general nature of repetitive manual work.
  • The psychological impact of working to an externally set “drum beat”.
  • The physical and cognitive effects of working at a particular rate.

Repetitive work

Repetitive work has always been with us. Some people find in it dignity and liberation. The Buddhist practice of samu, repetitive physical work performed with mindfulness, is part of Zen spiritual dicipline and the quest for enlightenment. Conversely, socialist pioneer William Morris believed that we should all be composing epic poems in our heads while sat weaving at the loom.

That being said, such work is not for everybody. I got the impression that Amazon were fairly clear to new employees as to what was involved. This is where recruitment is a key business process, identifying people who will fit with this type of role and stick with it.

However, I see nothing in general sinister about such work.

Drum beat

What delivered that hole punch so quickly was the “drum beat” that regulates work along the supply chain. This is a fundamental part of the Toyota Production System and lean operations generally.

The takt time specifies the rate at which products are being despatched to customers. That sets the rate at which pickers need to work. If the pickers work too quickly then packages build up in front of the despatch area. If too slowly, the despatch area stands idle. Both entail cost or delay that has to be passed on to the customer. The customer suffers.

The programme interviewed workers who felt the “drum beat”, announced through the bleep on a hand held electronic scanner, dehumanising. The BBC journalist clearly shared their view. The workers felt this deprived them of autonomy. They felt that they were not encouraged to think of [them]selves as human beings.

We do not show enough respect for boring work. We tend to sentimentalise and even glamorise the sort of active participation in work that too often results from having to resolve a non-conformance, a defect, a delay or an emergency. That is not useful work, no matter how much satisfaction it offers the employee.

I sometime sense a bien pensant nostalgia for the days when millions were employed in repetitive tasks on piece work. I think the BBC especially self indulgent on this matter. Piece work of course incentivises a worker to produce as much as they can even if that increases costs to the company in storing it until it can be used, if it ever is. The benefit of the drum is that the worker is required to produce no more or less than society needs. The laudable aim of lean operations is to reduce waste, Toyota use the Japanese term muda.

What I think was missing at Amazon was engagement of all employees in improvement. The usual quid pro quo for diligently following the drum is that part of the day is spent off-line in improvement work where an employee can, if so inclined, exercise their ingenuity. However, I am aware that the BBC reporter was recruited for the Christmas rush. That is not a period that anybody devotes to improvement work. Production is king. Improvement should have been prioritised earlier in the year when volumes were slow.

I think though that there is still an opportunity for a periodic review of the voice of the customer with all staff. It is focus on the customer that ultimately legitimises and justifies the discipline. I think Amazon staff would appreciate being reminded of just how quickly their orders are getting to customers, the variety of desires satisfied so promptly and the volume of transactions despatched, all through their discipline and focus on the drum.

Perhaps Amazon do this but the reporter didn’t stick around long enough to hear.

Work rate

This is the toughest part of the allegations to analyse. Was the takt time just set too quick for human capability? There is probably some flexibility in setting the rate for any individual as capacity can be increased by employing more pickers. There must be some limit on the number of pickers as the warehouse aisles will only accommodate so many on the move. However, as I said above, I found the overall tone of the programme so tendentious that I cannot take its criticisms at face value. No analysis by Professor Marmot was presented. Amazon have serious legal obligations to provide their workers with a safe system of work and to carry out health surveillance. Amazon have to cope with the real costs of absenteeism, staff turnover and litigation. I would be surprised if they had not analysed work demands thoroughly and diligently.

I do confess to feeling uncomfortable at the practice of terminating employment on the third consecutive day’s sick leave but, ultimately, it is a matter for Amazon.

I think that my conclusion from watching the programme is that it is critical to maintain all employees’ extrinsic motivation by the voice of the customer through constant review and emphasis of how an individual’s discipline contributes to the overall market impact. Goal deployment helps. Beyond that, I’m not persuaded by the BBC’s criticism.

Richard Dawkins champions intelligent design (for business processes)

Richard Dawkins has recently had a couple of bad customer experiences. In each he was confronted with a system that seemed to him indifferent to his customer feedback. I sympathise with him on one matter but not the other. The two incidents do, in my mind, elucidate some important features of process discipline.

In the first, Dawkins spent a frustrating spell ordering a statement from his bank over the internet. He wanted to tell the bank about his experience and offer some suggestions for improvement, but he couldn’t find any means of channelling and communicating his feedback.

Embedding a business process in software will impose a rigid discipline on its operation. However, process discipline is not the same thing as process petrification. The design assumptions of any process include, or should include, the predicted range and variety of situations that the process is anticipated to encounter. We know that the bounded rationality of the designers will blind them to some of the situations that the process will subsequently confront in real world operation. There is no shame in that but the necessary adjunct is that, while the process is operated diligently as designed, data is accumulated on its performance and, in particular, on the customer’s experience. Once an economically opportune moment arrives (I have glossed over quote a bit there) the data can be reviewed, design assumptions challenged and redesign evaluated. Following redesign the process then embarks on another period of boring operation. The “boring” bit is essential to success. Perhaps I should say “mindful” rather than “boring” though I fear that does not really work with software.

Dawkins’ bank have missed an opportunity to listen to the voice of the customer. That weakens their competitive position. Ignorance cannot promote competitiveness. Any organisation that is not continually improving every process for planning, production and service (pace W Edwards Deming) faces the inevitable fact that its competitors will ultimately make such products and services obsolete. As Dawkins himself would appreciate, survival is not compulsory.

Dawkins’ second complaint was that security guards at a UK airport would not allow him to take a small jar of honey onto his flight because of a prohibition on liquids in the passenger cabin. Dawkins felt that the security guard should have displayed “common sense” and allowed it on board contrary to the black letter of the regulations. Dawkins protests against “rule-happy officials” and “bureaucratically imposed vexation”. Dawkins displays another failure of trust in bureaucracy. He simply would not believe that other people had studied the matter and come to a settled conclusion to protect his safety. It can hardly have been for the airport’s convenience. Dawkins was more persuaded by something he had read on the internet. He fell into the trap of thinking that What you see is all there is. I fear that Dawkins betrays his affinities with the cyclist on the railway crossing.

When we give somebody a process to operate we legitimately expect them to do so diligently and with self discipline. The risk of an operator departing from, adjusting or amending a process on the basis of novel local information is that, within the scope of the resources they have for taking that decision, there is no way of reliably incorporating the totality of assumptions and data on which the process design was predicated. Even were all the data available, when Dawkins talks of “common sense” he was demanding what Daniel Kahneman called System 2 thinking. Whenever we demand System 2 thinking ex tempore we are more likely to get System 1 and it is unlikely to perform effectively. The rationality of an individual operator in that moment is almost certainly more tightly bounded than that of the process designers.

In this particular case, any susceptibility of a security guard to depart from process would be exactly the behaviour that a terrorist might seek to exploit once aware of it.

Further, departures from process will have effects on the organisational system, upstream, downstream and collateral. Those related processes themselves rely on the operator’s predictable compliance. The consequence of ill discipline can be far reaching and unanticipated.

That is not to say that the security process was beyond improvement. In an effective process-oriented organisation, operating the process would be only one part of the security guard’s job. Part of the bargain for agreeing to the boring/ mindful diligent operation of the process is that part of work time is spent improving the process. That is something done offline, with colleagues, with the input of other parts of the organisation and with recognition of all the data including the voice of the customer.

Had he exercised the “common sense” Dawkins demanded, the security guard would have risked disciplinary action by his employers for serious misconduct. To some people, threats of sanctions appear at odds with engendering trust in an organisation’s process design and decision making. However, when we tell operators that something is important then fail to sanction others who ignore the process, we undermine the basis of the bond of trust with those that accepted our word and complied. Trust in the bureaucracy and sanctions for non-compliance are complementary elements of fostering process discipline. Both are essential.

Trust in bureaucracy I – the Milgram experiments

I have recently been reading Gina Perry’s book Behind the Shock Machine which analyses, criticises and re-assesses the “obedience” experiments of psychologist Stanley Milgram performed in the early 1960s. For the uninitiated there is a brief description of the experiments on Dr Perry’s website. You can find a video of the experiments here.

The experiments have often been cited as evidence for a constitutional human bias towards compliance in the face of authority. From that interpretation has grown a doctrine that the atrocities of war and of despotism are enabled by the common man’s (sic) unresistsing obedience to even a nominal superior, and further that inherent cruelty is eager to express itself under the pretext of an order.

Perry mounts a detailed challenge to the simplicity of that view. In particular, she reveals how Milgram piloted his experiments and fine tuned them so that they would produce the most signal obedient behaviour. The experiments took place within the context of academic research. The experimenter did everything to hold himself out as the representative of an overwhelmingly persuasive body of scientific knowledge. At every stage the experimenter reassured the subject and urged them to proceed. Given this real pressure applied to the experimental subjects, even a 65% compliance rate was hardly dramatic. Most interestingly, the actual reaction of the subjects to their experience was complex and ambiguous. It was far from the conventional view of the cathartic release of supressed violence facilitated by a directive from a figure with a superficial authority. Erich Fromm made some similar points about the experiments in his 1973 book The Anatomy of Human Destructiveness.

What interests me about the whole affair is its relevance to an issue which I have raised before on this blog: trust in bureaucracy. Max Weber was one of the first sociologists to describe how modern societies and organisations rely on a bureaucracy, an administrative policy-making group, to maintain the operation of complex dynamic systems. Studies of engineering and science as bureaucratic professions include Diane Vaughan’s The Challenger Launch Decision.

The majority of Milgram’s subjects certainly trusted the bureaucracy represented by the experimenter, even in the face of their own fears that they were doing harm. This is a stark contrast to some failures of such trust that I have blogged about here. By their mistrust, the cyclist on the railway crossing and the parents who rejected the MMR vaccination placed themselves and others in genuine peril. These were people who had, as far as I have been able to discover, no compelling evidence that the engineers who designed the railway crossing or the scientists who had tested the MMR vaccine might act against their best interests.

So we have a paradox. The majority of Milgram’s subjects ignored their own compelling fears and trusted authority. The cyclist and the parents recklessly ignored or actively mistrusted authority without a well developed alternative world view. Whatever our discomfort with Milgram’s demonstrations of obedience we feel no happier with the cyclist’s and parents’ disobedience. Prof Jerry M Burger partially repeated Milgram’s experiments in 2007. He is quoted by Perry as saying:

It’s not as clear cut as it seems from the outside. When you’re in that situation, wondering, should I continue or should I not, there are reasons to do both. What you do have is an expert in the room who knows all about this study and presumably has been through this many times before with many participants, and he’s telling you, there’s nothing wrong. The reasonable, rational thing to do is to listen to the guy who’s the expert when you’re not sure what to do.

Organisations depend on a workforce aligned around trust in that organisation’s policy and decision making machinery. Even in the least hierarchical of organisations, not everybody gets involved in every decision. Whether it’s the decision of a co-worker with an exotic expertise or the policy of a superior in the hierarchy, compliance and process discipline will succeed or fail on the basis of trust.

The “trust” that Milgram’s subjects showed towards the experimenter was manufactured and Perry discusses how close the experiment ran to acceptable ethical standards.

Organisations cannot rely on such manufactured “trust”. Breakdown of trust among employees is a major enterprise risk for most organisations. The trust of customers is essential to reputation. A key question in all decision making is whether the outcome will foster trust or destroy it.