Dynamic human systems have three ways of dealing with change in the environment: buffers (absorb), feedback (adapt) and feedforward (anticipate). This precis has to do with buffering – slack in the system. The COVID-19 pandemic and lockdown have exposed organisations and countries with no or very little ‘slack in the system’.
Organisations are being exhorted to do more and more, faster and faster with less and less. Lack of slack reduces the ability to respond to opportunities and threats. A counter-intuitive principle of dynamic systems, such as business organisations is that some slack in the system is essential for its efficient operation. ‘Fat’ is wasteful slack that should be eliminated.
Prudent slack imparts resilience and robustness: an ability to absorb internal or external ‘shocks’ to the system e.g. unexpected loss of an executive, equipment failure, an epidemic.
Resource slack is equipment, inventory or personnel in excess of average or current demands.
Temporal slack is a bit of extra time, e.g. allowing an additional 10 minutes when travelling to a meeting at another location.
Procedural or control slack is the under-specification of non-critical processes or authority – it allows for some flexibility.
Conceptual slack is heterogeneity of perspectives on a system’s state, functions, and environment – i.e. some tolerance of different points of view.
Prudent slack is a buffer that makes organisations robust. Robustness is the ability of an organisation to maintain critical functionality and to perform well in the face of significant stress: threats and opportunities. Stress occurs more frequently than random events: think of late delivery of material, increase costs, machine breakdown, temporary absence of key personnel, or a big order.
The challenge for managers is to know if slack is prudent and beneficial or wasteful. One approach is to monitor carefully what happens for some months after a larger order comes in, when a crucial supply is delivered late, when equipment breaks down or when key personnel are absent for a brief period.
Selected Online Sources
‘Cut the Fat but Keep some Slack’, by S Mullainathan and E Shafir in Strategy and Business 2014:74. Reprint 00229: http://goo.gl/wAE3QE
The Joy of Slack,by R Wears.. http://resiliencehealthcarelearningnetwork.ca/blog/the-joy-of-slack
| Roger Stewart. March, 2014, April 2020 202 |
