Managers-Net

Application Issues

1. Preamble

   As stated in Systems Thinking - Introduction, Systems Thinking is a management discipline that concerns an understanding of a system by examining the linkages and interactions between the components that comprise the entirety of that defined system. The whole system is a 'systems thinking view' of the complete organisation in relation to its environment. It provides a means of understanding, analysing and talking about the design and construction of the organisation as an integrated, complex composition of many interconnected systems (human and non-human) that need to work together for the whole to function successfully (commercially).

2. Commentary

   Whole systems are composed of systems, the basic unit, which comprise several entities, for example

   • policies (WHERE DEFINED)
   • processes (WHAT NEEDS TO BE DONE)
   • practices (WHEN APPROPRIATE/LEGITIMATE)
   • procedures (HOW THINGS SHOULD BE DONE) and
   • people (WHO SHOULD CONTRIBUTE)

   and may be broken down into further sub-systems as analysis and understanding commands. Systems may be thought about as having clear external boundaries (closed) or having links with their environment (open). An open systems perspective is the more common and realistic.

   The boundaries of a whole system may be chosen and defined at a level suitable for the particular purpose under consideration; e.g. the education system or a complete school system. Similarly, systems can be chosen and defined at different levels and can operate alongside each other as well as hierarchically; e.g. the finance system, the decision-making system, the accountability system. An organisation as an entity can suffer 'systemic failure'. This occurs in the whole system or a high-level system where there is a failure between and within the system elements that need to work together for overall success.

   Factors in systemic failure may include confused goals, weak system-wide understanding, flawed design, individual incentives that encourage loyalty to sub-ordinate (rather than super-ordinate) goals, inadequate feedback, poor cooperation, lack of accountability, etc. Whole system success requires a performance management system that is pitched above the level of individual systems and their functional leadership. Features may include group or team-level goal setting, development, incentives, communication, reviews, rewards, accountability. The aim is to focus on what binds individuals together and what binds systems together rather than functional silo performance. A whole system can succeed only through managers collaborating in and across a number of functional systems/disciplines. The whole system can fail only if leadership at the level of the whole system fails, and where several senior managers are involved. Hence, such failure may be labelled a systemic failure of leadership.

3. Practical Illustration

   In cases of systemic failure, individual executives who operate at a lower sub-system level may be free of responsibility and blame. They may argue (correctly) that it was the wider system that failed. They may claim that systems that integrate with their own work let them down. However, responsibility and accountability for the successful design and running of the (integrated) 'whole system' should rest somewhere.

   Consider the skill set of an Air Traffic Controller (ATC). The role requires:

   • Excellent communication skills in order to relay information to pilots and instruct them on any changes to flight plans
   • A great deal of motivation to succeed in a career as an air traffic controller. NATS UK only accepts a handful of applicants and even if you become a trainee, the course is demanding
   • The ability to remain calm under pressure is essential when faced with any emergencies with aircraft in the air or on the ground
   • The ability to concentrate over an extended period of time as pilots and other controllers will be relying on the information that you provide
   • A strict competency and confidence with technology as much of it will revolve around the use of sophisticated radar
   • The ability and competence to be able to interpret the data the technology is relaying and process large amounts of information in a short space of time
   • Being decisive with this information and communicating important aspects of it to pilots is essential for the safety of the airspace
   • Soundness in demonstrating good problem-solving skills in order to deal efficiently with unexpected circumstances and ensure the safety of passengers and crew
   • Teamwork is also an essential skill required in working with other controllers and pilots to coordinate the positions of aircraft in the airspace

   Now consider the assessment of the skill set 'process' role of the ATC above, and the context below, to illustrate the complexities of the procedures needed to undertake in order to perform the role to standard operating conditions:

4. Illustration Context

   Some years ago, one of the authors was travelling to work in the company of a senior LuxAir employee destined for Gatwick Airport - a discussion took place about how 'process driven' Air Traffic Controllers were - it seems the traveller was in the company of an ATC one day and the ATC stalled his car at a traffic lights junction - the passenger looked on in amazement at what followed - the ATC applied the handbrake of the car and placed the car in neutral, removed the ignition key, unfastened his seat belt, engaged the hazard warning lights, took precautions of site and exited the vehicle closing the driver's door - he proceeded to walk around the vehicle (checking for animals or a small child) when satisfied he re-entered the vehicle and placed the key in the ignition, secured his seat belt, started the engine, checked his rear view and side mirrors, signalled his intention to move off (thus cancelling the hazard warning lights) and did so safely after the lights had indicated green. There can be no question that all air traffic was in 'safe hands' when this employee was at the helm - a designed 'outcome' of the system.

5. Systems Thinking & Change Management

   The context of ST is embraced most often when an organisation needs to effect Change Management in a formal way - often such a requirement is carried out, as a general rule, by external consultants and is at the behest of a 'new-broom' at the head of the organisation or where organisational reforms/mergers/acquisitions occur - there can be serious cost associated with this option and the linkages and interdependencies identified need 'absolute resolution, understanding and endorsement from senior management.'

   The activity the consultants embark on will involve many forms of analysis and many changes will be proposed - the consultant departs and often the implementation is left to in-house executives, some of whom may not have bought in to the process as fully as would ensure success.

   

   The diagram above is intended to indicate what needs to be tackled to sustain commercial or service success and is derived from the work of Peter Senge - The Fifth Discipline. As can be seen, the diagram employs two axes:

   • A vertical axis in an Incremental/Radical line, and
   • A horizontal axis in a Core/Peripheral context

   All processes can then be placed in one of the four quartiles that are defined by the model. Quartile 1 defines change from Government, Strategy Days, Business Process Reengineering (BPR) etc. They almost certainly demand the acquisition of new skills & competencies. Quartile 2 generally contains the organisation's key processes. When these have been appropriately monitored these will contribute the organisation's Standard Operating Procedures (SOP) and, potentially, its Risk Management Map. The EFQM Excellence Model (or the equivalent Baldrige Criteria for Performance Excellence) can often assist here. The processes placed in Quartiles 3 and 4 can be treated as "non-influencing processes" and are of subsidiary importance.

6. Systems Thinking and Lean Thinking

   The reader might be forgiven for thinking that all Systems Thinking (ST) dialogue is inextricably linked to Lean Thinking (LT). However the authors at Managers-Net do not accept that ST = LT in any shape or form, since the UK model of ST is a clearly defined path:

   Deming >>>> Ohno >>>> Seddon - nowhere do these three pioneers of the UK path assert that Lean Thinking has a place in Systems Thinking and as a consequence the two disciplines should be kept apart lest the most important aspect of Key Process definition be discarded in error.

7. Conclusion

   Understanding and anticipating how the whole system is intended to work, actually works, and how it may buckle under pressure, can practically elude and defeat most executives. To avoid censure for this tough challenge, they sometimes seek recourse to the, often hollow mantra "lessons will be/have been learned". They also try to divert attention and reassure investors by referring to a single bad apple (e.g. a 'rogue trader'), behind which usually lurks a systemic failure.

   The leadership challenge is accentuated by the realisation that for every legitimate, official or consciously designed system (which is intended to be and is supposedly rational) there is a shadow system. The shadow system is where all the non-rational issues reside, e.g. politics, trust, hopes, ambitions, greed, favours, power struggles, etc. The system can confuse, overpower, block, and fail leadership. But leadership can fail the system. A major failure of leadership within, across or down an organisation is referred to as 'systemic'. For all this and any shortcomings the reader identifies in research, there can be no question that, as of today, Systems Thinking as an 'exercise in change management' is the preferred methodology applied by major consultancy organisations worldwide.