Memo to ‘Top Management’ – Subject: Engine Technology

I’ve just been searching for a post that is hugely relevant to a recent conversation, and have found that it was an old piece that didn’t get published onto this blog…so here it is:

Jet engine“Management thinking affects business performance just as an engine affects the performance of an aircraft. Internal combustion and jet propulsion are two technologies for converting fuel into power to drive an aircraft.

New recipes for internal combustion can improve the performance of a propeller-driven airplane, but jet propulsion technology raises total performance to levels that internal combustion cannot achieve. So it is with management thinking.

Competitive businesses require jet (even rocket!) management principles. Unfortunately, internal combustion principles still power almost all management thinking.” (H. Thomas Johnson)

And so Johnson nicely compares and contrasts the decades old ‘command and control’ management system with a new ‘systems thinking’ way.

Let’s take incentives as an important example:

You report to a manager, who reports to a manager, who…etc. You have ‘negotiated’ some cascaded objectives and you will be rated and then rewarded on your ‘performance’ in meeting them. Sound familiar?

Here are the fundamental problems with this arrangement:

  • Obey and justifyYou will tell your manager what you think he/she wants to hear, and provide tailored evidence that supports this, whilst suppressing that which does not;

  • If you are ‘brave’ and tell your manager something that they might not like, you will do so very very carefully, like ‘walking on eggshells’…and, in so doing, likely de-power (i.e. remove the necessary clout from) the message;

  • You realise that it’s virtually suicidal to ‘go above them’ and tell your manager’s manager the ‘brave’ thing that they should hear…because you fear (with good reason) that this will most likely ‘come back to bite you’ at your judgement time (when the carrots are being handed out);

  • You are locked into a hierarchy that is reliant on a game of ‘Chinese whispers’ up the chain of command, with each whisperer finessing (or blocking) the message to assist in the rating of their own individual performance;

  • Each layer of management is shielded (by their own mechanism) from hearing the raw truth and, as such, they engineer that they ‘hear what they like, and like what they hear’.

…and therefore this system, whilst fully functioning, is perpetually impotent! It has disabled itself from finding out what it really needs to know.

“Hierarchies don’t like bad news…. bad news does not travel easily up organisations” (John Seddon)

If you’ve been in such a system and HAVE broken one of the rules above through your passion to make a real difference for the good of the organisation you work for (or perhaps worked!), then you’ve probably got some scars to show for it.

If you’ve always played it safe, then this is probably because you’ve seen what happens to the others!

The ‘Bottom line’ for ‘Top Management’:

If you want to transform your organisation, change ‘engine technology’! Tinkering with your existing one is simply not going to work.

  • Managers should not be rating the performance of individuals. Rather, they should understand what the system is preventing the individual from achieving…and then work with them to change that system to release their untapped potential;

  • Managers should not be incentivising individuals to comply. Rather, they should be sharing the success of the organisation with them. (These are very different things!)

Neither of these fundamental changes is in the gift of ‘middle management’ – they belong to those that determine the management system.

… and so, if (and this is a big ‘if’) ‘top management’ want to know the raw truth (‘warts and all’) they must constantly remove, and guard against, system conditions (e.g. incentives, performance ratings) that would prevent the truth from easily and quickly becoming lucid and transparent.

Afterthought, to counter a likely retort from ‘Top management’:

I have often (professionally) provided well intended feedback to ‘management’ as to what’s actually ‘happening out there’, particularly when I believe that they may not be aware of this. Many an Executive has derived great worth from this feedback (and thanked me accordingly).

This isn’t saying that I’m always right, or that I know everything. Obviously I’m not, and I don’t. But I do know what I see and hear.

However, there has been a subset of deeply command-and-control executives that confidently respond with “no Steve, you are wrong – that’s not the case at all. My people tell me exactly what’s happening…and there’s no problem here”.

I find this interesting (sometimes amusing, but mostly disappointing).

A manager can never be sure that people are being totally open and honest with them…but they can constantly look for, and understand, what mechanisms and practices would put this desired feedback in doubt or at risk….and then tirelessly work to remove these system conditions, for the good of all.

Footnote: I wrote this post before I wrote ‘Your Money or your Life!’…which considers the question as to whether ‘Top management’ in large corporates CAN change.

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“Citizens face many front doors…”

Doors-Doors-DoorsGovernments all over the world want to get the most out of the money they spend on public services – for the benefit of the citizens requiring the services, and the taxpayers footing the bill.

Government officials regularly devise initiatives, and even new departments, aimed at getting their myriad of agencies to work better together.

However, looking at this from the outside, the media regularly uncover seemingly daft (and sometimes tragic) instances where government agencies have failed to effectively act, connect and co-operate with each other. In such instances, each agency appears to ‘the person on the street’ to have been wearing blinkers with their ‘common sense’ radars turned to ‘exceedingly low’.

But is it right to lay blame on the agencies or, worse, the people acting within them? In the majority of cases, I’d suggest that the answer would clearly be ‘no’. We should be looking at the bigger ‘whole of public service’ system that they are designed to operate within.

A new phrase was termed some years back called ‘Joined up government’. The Oxford dictionary defines it as:

“A method of government characterized by effective communication between different departments and co-ordination of policies.”

When a dictionary defines a word, it usually provides the reader with an example sentence showing its proper usage. In this instance, the first example sentence given is a negative one, as in:

“There is an obvious lack of joined-up government here” (Oxford Dictionary)

i.e. Governments openly recognise that there is a big problem (a lack of togetherness)…and that they would love to ‘solve’ it…but it’s regularly in the ‘too hard basket’!

The purpose of this post is to share (what is to me) an important (and very well presented) 30 min. video by Jeremy Cox1: Budget Management and People Centred Services that nicely explains, by way of reference to a real case study, the ‘multi agency’ problem and how to go about changing it.

If you are interested (particularly if you work within the public sector) then I’d expect that watching it should be a worthwhile (and thought provoking) use of your time.


Right…if you’ve got to here then I’ll assume that you’ve watched the video…the rest of this post pulls out (what I believe to be) key things said by Jeremy Cox in his presentation (blue italics below) and my ‘wrap-around’ narrative.

Note: What follows is incomplete and not a substitute for watching the video. It’s just an aide-memoire so that I (and you) don’t have to watch the video every time to pull out the key points or discuss it with our colleagues.


Jeremy Cox starts at a summary level by walking us through “four critical steps”:

1. The first thing to do is to study your system…and, just to be crystal clear, YOU (those responsible for the system) have to study it, and do so WITH those who operate it. A consultant cannot do this for (i.e. to) you2.

“You have to go and study because if you see it with your own eyes, you can’t deny it. If someone ‘tells you’, then you can ‘rationalise’ it away quite easily.”

2. From studying your system, you can then see and understand the effects of (supposed) ‘controls’ on its performance.

3. Only when we understand (at a root cause) WHY the system operates as it does, should we redesign…because then, and only then, is such a redesign based on meaningful evidence…as opposed to the usual ‘conventional wisdom’ or ‘current in-vogue ideology’;

and finally:

4. Devise new measures, and move to a new model of leadership.

Cox then goes into each step in some detail.

Going back to Step 1: Cox talks about studying demand.

HelpHe takes us through a case study of a real person in need, and their interactions with multiple organisations (many ‘front doors’) and how the traditional way of thinking seriously fails them and, as an aside, costs the full system a fortune.

Understand demand in context….don’t understand people from the point of view of your organisation, understand the person and what matters to them about living a better life.”

The case study is sad…and yet not really a surprise – we all kind of know that it’s true. It shows the huge power of following some cases around the full system.

In explaining Step 2, Cox opens up the madness within silo’d (i.e. single department) thinking, which is driven by their ‘budgetary controls’.

Rules of playHe identifies three survival principles in play, and the resulting anti-systemic controls that result:

a) “We must prioritise [our] services for the most in need” which leads to attempts to stop entry into the service, and then the requirement to break through escalating thresholds of eligibility.

Such ‘screening out’ logic creates the following madness: “Your case isn’t serious enough yet…go away until things get worse!”

b) “We must stick to what we do” which leads to “I can see that you need A and B for you to get better…but, here, we only do A.”

Cox gives a real example of an alcoholic with depression being turned away by mental health practitioners because “we don’t work on alcoholism – you need to solve that first and then come back with your depression”. We can predict that such unhelpfulness will lead the needy citizen towards a rather large drink!

c) “We must limit service delivery” which leads to attempts at closing cases, doing things on the cheap, and setting time limits…all of which are about pushing things through at the expense of the needy citizen…which will lead to failure demand (probably popping up unexpectedly in another department…and therefore not seen as linked).

The redesign at Step 3 requires different principles.

IntegratedCox makes the obvious point that the actual redesign can’t be explained up-front because, well…how can it be -you haven’t studied your system yet!

…but, generally, it is likely that “genuinely integrated, local-by-default problem solving teams will emerge from [following the steps]”.

A clarification: ‘Genuinely integrated’ doesn’t mean a multi-disciplined shared building where people regularly come together for, say, case review meetings…and then go back to their ‘corners’ and work to their existing (i.e. competing) policies and procedures.

A nice test from Cox:

“How do you know a team is genuinely integrated rather than co-located?…All you have to do is look in the fridge – nobody’s written their department’s name on the milk!”

And so to Step 4: New measures and new leadership

shovelling sand with a pitchfork[Once you’ve successfully redesigned the system] “The primary focus is on having really good citizen-focused measure: ’are you improving’, ‘are you getting better’, ‘is the demand that you’re placing reducing over time’.”

Notice that these measures are about the purpose of the system (i.e. for the citizen), and NOT about the activities performed within the system. It’s not about the volumes of calls taken or visits performed or payments made or cases closed or…[carry on naming activities].

“You have to shift leaders from managing the budget top-down to adding value to the process of studying, and improving outcomes for individuals.”

The point here is that you are never done. The outcomes from a redesign can radically shift performance, but you’ll quickly be ‘back at square one’ if you haven’t grasped the WHY and don’t ‘kick on’ to yet more learning, and yet more improvement – becoming better every day – for the good of citizens, and (importantly) for the pride of your employees.

To close

What’s most interesting to me from the video is the graphic explanation of one unit of demand, a needy citizen in a really shitty situation, being bounced around – presenting at public service ‘front doors’ in multiple and seemingly unrelated ‘cases’, with each agency doing what they can but not what is required….and the needy slip ever further into their personal quagmire.

“We limit what we do to ‘what we do’, not to what the person needs.”

Cox makes the hugely important point that, once you open your mind, then the study and redesign of the work is relatively easy. The hard bit is re-conceiving the ‘system of management’. This takes real leadership and (perhaps most importantly) self-development.

Cox closes with the following comment:

“Some of the most rewarding work that I have ever done is just working with these integrated teams who are out…on the ground, with good leadership, learning how to solve problems for citizens. You actually see people’s lives turned around and people who otherwise would have been dead who are now still alive.”

This is powerful stuff! There can’t be much more meaning to anyone’s working life than that.

Footnotes:

1. The video covers one session within a ‘Beyond Budgeting’ event run by Vanguard Consulting over in the UK. The first 3 mins. is an introduction from John Seddon, and then Jeremy Cox (a Vanguard consultant) presents the rest.

Note: Cox refers to names of UK government departments (e.g. The DWP). If you live elsewhere in the world then you are likely to have similar agencies, just with different names.

2. A consultant cannot do it for you: I should clarify that an experienced ‘systems thinking’ coach CAN facilitate you through studying your system and its redesign….BUT they aren’t ‘doing it’ – you are!

I have a post with the ink half dry that explains and expands this point called ‘Smoke and Mirrors’. I guess I should get on and finish it now.

3. The NZ government is setting up a Social Investment Agency. Its focus is fundamentally about changing the lives of the most vulnerable New Zealanders by focusing on individuals and families, understanding their needs better, and doing more of what is most likely to give the best results”. I like the intent.  I hope that those involved watch (or have already watched) the Jeremy Cox video, and consider the messages within.

“Why is your proposed change so profound?”

knot-systemMy recent serialised post titled “Your Money or your Life!” proposed that every ‘large corporate’* should make a meaningful change…that would be for the good of all.

Wow, that would be great!

* Where ‘large corporate’ is short form for ‘controlled by free-floating short-term thinking shareholders’.

I got thinking (as is often the case after pressing the ‘publish’ button) about readers thinking:

“Erm, okay – interesting perspective –  but why is the suggested change supposedly so profound?”

…and this caused me to question whether I had got the ‘this is a potential game changer!’ point across.

Note: What follows is relevant when considering ANY proposed change, not just the contents of my last post!

And so to a ‘systems thinking’ explanation:

First, a definition:

“A system is an interconnected set of elements that is coherently organised in a way that achieves something.

If you look at that definition closely for a minute, you can see that a system must consist of three kinds of things: elements, interconnections, and a function or purpose1.” (Donella Meadows)

Going back to an organisation (yours, mine,…wherever) as a system to ponder:

  • The Elements are pretty obvious – they include the people, the products and services offered, the physical buildings and resources, lots of intangible pieces (distinct departments, teams within) and so on…;

  • The Interconnections are the “the relationships that hold the elements together” e. g. the physical flows of work, the business policies and guidelines, external laws and regulations, the communications (including the gossip!), and flows of information (signals that go to decision or action points…which may or may not trigger reactions);

  • The Purpose of a system, whilst essential, is often hard to see (even if you think you know what it is!):

 “The best way to deduce the system’s purpose is to watch for a while to see how the system behaves…Purposes are deduced from behaviour, not from rhetoric or stated goals.”

 What you see may be very different to what you are told.

…and so, if you want to change an organisational system, presumably through a desire to improve (and even transform) it, then you have three “kinds of things” to play with.

Taking each ‘kind of thing’ in turn:

Elements

 “Changing elements usually has the least effect on the system.”

Using rugby and the All Blacks to illustrate the point: The coaches can change one or two players but, if they keep everything else the same, then not too much will change.

Now, sure, some elements may be very important (perhaps the introduction of a brilliant goal kicker) but, even then, the worth of such a change is hugely constrained by the rest of the system.

You might change ALL the elements (e.g. players) but if you keep the interconnections (such as the game plan, methods of communication, information sharing, the environment of trust and respect…) and purpose the same, then very little change may occur.

dan-and-richieA positive example of this phenomenon: The All Blacks won the rugby World Cup in 2011 and 2015, making them the first team ever to achieve ‘back-to-back’ rugby World Cups.  They did this with a core of extremely influential world-class players3who then promptly retired!

The world rugby media wondered how the All Blacks would rebuild, given the apparently gaping holes these players would leave. Many a pundit envisioned dark days ahead.

And yet a few weeks ago (on 22nd Oct 2016), despite introducing many new players, the All Blacks broke the world record for the number of consecutive international games won against ‘Tier one’ rugby nations (18 games). In short, rather than going backwards, they have ‘kicked on’ to even higher levels.

Their purpose and interconnections have clearly been shown to be stronger than the elements (e.g. players).

To the world of work: and organisational ‘restructures’. If you re-jig your hierarchical structure, changing the departments and faces within, but keep the methods of interconnection (the management system) and the underlying purpose the same (whether profit or political ideology), then not much has really changed.

“A system generally goes on being itself, changing only slowly if at all, even with complete substitution of its elements – as long as its interconnections and purposes remain intact.”

Further, you may have convinced yourself that your problems were ‘because of’ individuals…but consider that you may have ‘cut out’ the symptom and not the cause. If you don’t learn from this then you can expect another (costly) restructure in maybe 12 months time…and again…and again.

Interconnections

 “Changing interconnections in a system can change it dramatically.”

chris-robshawSo, staying with rugby, let’s move to the English national team.  In contrast to the All Blacks, they have had two terrible World Cups.

In 2011: they travelled to New Zealand and were awful (I know – I watched them!) They were heavily criticised for their attitude, and off field behaviour – they acted as if they were on an all expenses paid holiday…and, in the end, they were! The coach (Martin Johnson) resigned.

In 2015: they had home advantage – hopes were high. The whole of England was supporting them…but they exited the competition at the pool stages – the first time in their history. The coach (Stuart Lancaster) resigned.

So how has 2016 gone? Well, they’ve played 9, won 9…which includes:

  • achieving the Grand Slam (which they haven’t done for 13 years);
  • a 3-0 tour whitewash of Australia (a rare achievement); and
  • rising to be ranked 2nd in the World (from 8th)…just behind those mighty All Blacks.

So what’s changed? Well, England appointed a new manager (Eddie Jones)…but he has stuck with the core of previous players (those elements).

Instead of wholesale changing of the elements, he’s changed the interconnections – how they work together – resulting in players that had become labelled as ‘bad boys’, ‘past their best’ and ‘donkeys’4 being reborn, putting in controlled, consistent and herculean performances.

We don’t yet know whether the change will be long lasting…but it has most definitely been profound.

Back to the world of work: Perhaps the best known modern(ish) example of keeping the elements but changing the interconnections has to be NUMMI:

General Motor’s Fremont car plant was one of the worst performing plants in the whole industry, with high costs, low quality and terrible worker relations. GM closed the plant in 1982.

Toyota, wanting to start production in America, struck a joint-venture agreement with GM and the Fremont plant reopened as NUMMI in 1985. They rehired 85% of the original workforce (who still belonged to the Union – considered by GM as a serious problem). After taking 100s of the workers over to Japan to experience totally different thinking (involving a high degree of meaningful worker interacting), these learning’s were put into practise and the factory went on to produce the lowest cost, highest quality cars within its first year!

“Toyota took a bunch of [apparent] F Players, retrained them, put them into a great system, and magically they became superstars.” (Pfeffer and Sutton)

In short: Changing from a command-and-control management system to one that better understands systems and people will be dramatic.

Purpose

“A change in purpose changes a system profoundly, even if every element and interconnection remains the same.”

So, to switch from rugby to football: There’s an annual knockout competition in English Football, known as ‘The FA cup’. First played in 1871, it is the oldest football competition in the world. There is something rather magical about it because, given that it is open to any eligible club down to level 10 of the English football league system, it allows amateur minnows to mix it with the millionaire mega-stars…and, every now and then, create an upset – a minnow becomes a giant killer!

I searched for a game between a low-league minnow and a 1st division giant…and came up with Wrexham vs. Arsenal back in 19925. Both appeared to have had the same purpose – to win the game – but I suggest that their true purposes were rather different (and not so obviously stated).

Arsenal’s stars were probably trying to keep themselves injury free, to focus on other important matters – win their league (the 1st division) and perhaps get into their respective national sides (it was European Cup year)….and maybe avoid the embarrassment of defeat.

wrexham

In contrast, every man in the Wrexham team was aiming to become a legend!

Wrexham won 2 – 1. The crowd went nuts!

But here’s an interesting point: Wrexham, the giant killing minnow, went back to their low-league competition the following weekend and drew 0 – 0 at home with Maidstone United. Maidstone who? Exactly! The same players and staff, same coaching system, same methods of communications…different purpose!

This example, I hope, serves to illustrate the point that a (true) change in purpose will be profound, even whilst retaining the same elements and interconnections.

To the world of work: Even better than a transient change in purpose (like Wrexham’s), would be a permanent one!

…and so we finally come to that ‘profound point’ from my recent serialised post: long-term profit sharing. Bringing ‘Live Money’ into an organisation permanently changes its purpose, for the good of all…which would lead to experimentation with new interconnections…which would reinvigorate the elements (or at least naturally sort through those that fit vs. those that wish to pursue something else).

All in all – a profound change to the system. It would be…well…‘Transformed’.

To close: So, what if your ‘leader‘ changes?

Let’s say your organisation hires a new CEO – an element, but a central one. Everyone’s chattering about this ‘big change’…but will it change much?

The answer is “it depends”.

It will depend upon whether the leader understands systems and people (through education and experience, or perhaps instinctively)…because:

  • if the new leader goes on to change interconnections and, even better, the (actual) purpose then transformational change will likely occur; but
  • if that leaders attempts change merely through changing the elements (new people, new departments, a new IT system, some new products and brands….) then not much will actually change.

Changing the interconnections relates to the management system.

Changing the purpose relates to why the organisation exists, and for whom.

…and I hope I don’t need to say that a fancy new ‘purpose statement’ doesn’t, of itself, change a thing!

Footnote:

1. The word ‘Function’ is generally used for non-human systems and ‘Purpose’ for human systems.

2. Quote source: All quotes (unless otherwise stated) are taken from the excellent book ‘Thinking in Systems’ written by the late Donella Meadows (a giant to add at some point).

3. All Black players that retired after 2015 rugby World Cup:

  • Richie McCaw (148 caps): Regarded by many as the greatest ever rugby player, Most capped rugby player of all time, 3x World Rugby Player of the Year….and his accolades go on and on;
  • Dan Carter (112 caps): Regarded by many as the greatest ever no. 10 (fly half) player, Highest international test points scorer of all time (1,598), 3x World Rugby Player of the Year…and on and on;
  • Ma’a Nonu (103 caps) and Conrad Smith (94 caps). Most successful mid-field pairing;
  • …and other great players: Kevin Mealamu (132 caps), Tony Woodcock (118 caps)

4. England players: If you are a rugby fan then I’m referring to the likes of Dylan Hartley (‘bad boy’), Chris Robshaw (‘has been’) and James Haskell (‘donkey’). Sorry chaps…but this is what you had seemingly become!

5. FA Cup Giant Killing Context: Wrexham came last in League 4 the year before (i.e. came 92nd out of all the 92 league 1 – 4 clubs). At the complete opposite end of the spectrum, Arsenal won League 1 (i.e. came 1st out of these 92 clubs).

6. Explaining the main post Image: The system is made up of ropes (elements), knots (interconnections) and purpose (what it is intended to achieve)….which may be to look pretty or to hold a heavy load.

7. Clarification: This post is NOT saying that purpose is the only lever you should focus on. It is merely explaining the likely impact of working on each type of lever. We should be working on improving all three ‘kinds of things’ and, being a system, they are all related!

The gift that keeps on giving

A good laughI’m a big fan of the Think Purpose blog. It gives me a good hearty laugh, and long may it continue.

Some time ago the author promoted the blog’s most viewed post to a ‘page of its own’ status under the heading ‘It’s not all cream cakes and beer in systems thinking’. Go on, have a read.

I enjoy this post immensely (it has so many truths within) and, as such, I have it on my wall in an attempt to keep me sane.

I was pondering it the other day as yet more madness happened around me and something struck me: I wanted to add something of an optimistic/ positive nature to the list (‘item no. 8’ if you will)….and here it is:

Once you begin to understand the basics of systems thinking and intervention theory then much of what you observe around you becomes ‘the gift that keeps on giving’.

There isn’t a day that goes by in which I don’t read an email or intranet communication or become involved in (or overhear) a conversation in which I start to chuckle (even ending up crying with laughter) at what is happening before and around me.

So, yep, I’d add to the list that systems thinking is the gift that keeps on giving. Just think – all that comedy was occurring around you beforehand…and you never knew! How could you?

 

…and to follow up this positivity, ‘item no. 9’ is that ‘systems thinking’ conversations are hugely stimulating.

Since starting my journey, and in particular from when I began to write this blog, I have never had such fabulous, important, liberating, energising, therapeutic, cathartic etc. etc. conversations with some truly inspirational, humble, genuine, passionate and well-meaning people, searching for a ‘better way’ for them, for society and for our planet.

Sure, much of the command and control cr@p still remains around them but it’s a great feeling to be able to talk to a fellow human and ‘you know that they know’ and ‘they know that you know’! It’s a bit like having a magical secret.

Obviously it gets better the more of you there are1…but even just two of you can hugely enjoy a daily exchange about another “you couldn’t write this stuff” instance of ‘item 8’ comedy (see above).

Conversations beforehand were just so bland, boring and irrelevant to the world.

Ho hum, roll on tomorrow’s fun 🙂

Footnote:

1. I see these stimulating conversations as the pioneers of a ‘new way’ connecting and nourishing themselves along the lines of the Berkana Institute system change model. (Thanks to Charles Beauregard for sharing this video in the comments section of a much earlier Think Purpose post.)

Oh…so that’s why ‘Command and Control’ doesn’t work very well!

social systemWarning (or advert for some): Sometimes I write long(er) ‘foundational’ type posts – this is one of them 🙂

Russ Ackoff researched and wrote a great deal about systems.

It is within his writings1 that I find an excellent explanation about why many organisations adopted the command and control management model, why there is a major problem with this and, most importantly, why there is a better way.

First, A recap:

Before looking at types of systems, I should allow Ackoff to remind us what is meant by ‘a system’ and why this matters:


“A system is a network of inter-dependant components that work together to try to accomplish the aim of the system…

The two key pieces here are that:

  • there is an aim; and
  • it is made up of parts that need to work together (either directly or indirectly) to achieve that aim

If you have parts but no aim then you don’t have a system…you simply have a ‘collection’.

If you have a part that (truly) isn’t required to achieve the aim then it isn’t actually part of the system…which is why your ‘appendix’ body part got its name.


…If each part of a system, considered separately, is made to operate as efficiently as possible, the system as a whole will not operate as effectively as possible…

The heart and lungs are parts of the body but if they function according to what’s best ‘for themselves’ then they won’t function as required for the overall good of the whole. It’s no good if the brain is telling the heart and lungs to ‘work flat out’ to run like hell from a chasing pack of lions and these organs both respond with a “no thanks, this doesn’t suit  us!” The same is true for parts of (e.g. functions within) organisations.


…The performance of a system depends more on how its components interact than on how they act independently of each other…

You can buy a ‘light as a feather’ carbon frame, an awesome set of aero wheels and a precision engineered 11-speed group set but you can’t ride them as a bike if they don’t fit together. Further, someone with a basic ‘sit up and beg’ bike frame with cheap wheels and components that do fit will easily beat you in a bike race.


…When a system is taken apart it loses its essential properties.”

If you take apart an alarm clock, you will have all of the parts necessary for the system but the disassembled collection of parts isn’t sufficient to tell you the time.

The above has huge implications.

So, on to Ackoff’s system types:

Ackoff defined a number of types of systems2 and the problems that occur when an organisation adopts a management model that does not match the correct system type.

Here goes….

Type 1: Deterministic (e.g. mechanisms)

alarm clockA deterministic system is one which has no purpose and neither do its component parts. This might seem rather strange…”Erm, I thought you said a system had to have an aim?!” – the point is that a deterministic system normally serves a purpose of an entity external to it, such as its creator. Its function, and that of its parts, is simply to provide that service when required.

Mechanisms are the most obvious examples of deterministic systems: An alarm clock is such a system. Its purpose (to tell the time) has been provided to it by its creator (the clock maker)….and that is what it is for, nothing more and nothing less. It can’t decide to do something else!

Even a computer, whilst incredibly more complicated than an alarm clock, is such a system – it is reliant on the inputs and programs provided to it by its external sources.

Type 2: Animated (e.g. most organisms)

monkeyAn animated system is one which does have a purpose of its own but its parts don’t.

Animals (and therefore humans) are the most obvious example. They have a purpose of their own – where this might be argued as (at a minimum) survival, and (more optimistically) to enjoy doing so, in the manner of their own choosing.

The animal is made up of parts (e.g. organs) and whilst these parts have a necessary function for the good of the whole, they do not have a purpose of their own.

In this way we can compare a computer to a person and see that they are fundamentally different. The computer’s purpose is provided to it whilst the person provides their own.

Type 3: Social (e.g. organisations, societies)

flagsA social system is one which has a purpose of its own and so do its parts (the people within).

Indeed each social system is usually part of a larger social system (e.g. a family is part of a community, which is part of a nation, which is part of ….)

And even more complex, a person belongs to multiple social systems – which have different, sometimes conflicting, purposes3.

So, bringing these three types together, we have:

System Type4: The whole is: The Parts are:
Deterministic (e.g. a mechanism) Not purposeful Not purposeful
Animated (e.g. a human) Purposeful Not purposeful
Social (e.g. an organisation) Purposeful Purposeful

These three system types form a sort of hierarchy: The deterministic alarm clock is given purpose by the animated (clock making) person who also lives within their social group. The linkages don’t go the other way….or at least they shouldn’t…which leads on to…

Okay, interesting stuff but what’s the point?

Well, now that we have an understanding of three different types of systems, we can see the consequences of the misunderstanding of an organisation as a system:

A ‘deterministic’ model applied to an organisation:

Adam Smith (often referred to as the father of economics and of capitalism) wrote a famous book called ‘The wealth of nations’ (1776). In it, he used the example of a pin factory to explain the concept of ‘the division of labour’. He explained that one person performing all the steps necessary to making a pin could perhaps make only 20 pins a day but if the pin-making process were broken up into a series of limited operations, with separate people performing them in a joined-up line, productivity could rise to thousands of pins per day per worker.

Now that sounds fantastic doesn’t it! But for who?

Smith’s thinking was taken on board by industrialists who went on to employ vast factories of ‘unskilled labour’ in the new concept of ‘manufacturing’ (and who likely still do in the sweat shops of 3rd world countries).

Standing back, we can see that this is using people as replaceable machine parts i.e. we have a defined mechanism (the manufacturing process) which is given its purpose externally by its creator (e.g. make pins)…and wow, this mechanism sure can make pins!

Henry Ford’s phenomenal success worked in the same way. He designed a mechanism to make Model T Fords (his mass production factory) and installed workers as the mechanism’s parts. He (and other ‘owners’ at this time) could use workers in this mechanistic way because:

  • unskilled workers, whilst poorly educated, were adequate for the simple tasks required of them;
  • such workers were willing to tolerate being treated as a machine part since there was high unemployment and virtually no social security safety net…giving them little option (i.e. work as required or starve);
  • there was a large pool of available labour – the human parts of the machine were easily replaceable; and
  • such business owners were subject to very little societal controls (such as governmental interventions and constraints) limiting their treatment of their worker ‘parts’4.

It’s worth noting that, even though worker conditions were massively in his favour, Ford’s ‘mechanism’ had an astounding 370% turnover of workers in 1913, with new hires staying an average of only 3 months. Many workers simply ‘walked off the job’ without notifying anyone…which is what happens if you ask humans to perform monotonous (demoralising) work without having to use their brains.

An ‘animated’ model applied to an organisation

So times moved on. We had two world wars that caused/ enabled major societal changes – a major shakeup of the class system, the birth and rise of the Labour movement and worker unions, massive improvements in education, social security and welfare, and great advances in technology.

The other significant change was the raising of capital (necessary for post war growth and development) from the public and the consequent birth/ rise of publically owned corporations. This separated the ownership and management of these new organisations.

A big difference from before was that:

  • the workers were now far more educated and empowered; and
  • the required work had become far more skilled (utilising new technologies).

Managers were no longer able to treat workers as merely replaceable cogs in a machine – it took time to train them, and they now had worker rights and choice.

Now, rather than seeing an organisation as a deterministic system with the all-powerful owner dictating its purpose (as the likes of Ford had done), they operated as an animated system would6: with a ‘brain’ (senior management) and a ‘body’ (the various operating functions performing the work).

Such a model works by senior management providing the instructions (the what: commands) and procedures (the how: controls) and then the operating units carrying them out accordingly.

“Command and control represents the division of labour between decision-making and doing the work.” (Seddon)

We all know that the ‘operator’ parts within the organisations ‘body’ are actually human beings but the ‘command and control’ management instruments don’t really recognise this fact:

  • the organisational ‘brain’ (often annually) decides the strategy and breaks this down into a set of objectives for the parts of the ‘body’ and locks these into a cascaded grand plan;
  • the organisational ‘brain’ provides incentives for the ‘body’ to act as it requires: thus assuming that it is simply a matter of extrinsically motivating each part to comply as required;
  • the organisational ‘brain’ considers the performance of each part of the ‘body’, scores it and delivers this judgement back: thus assuming that each part can and will accept such feedback for the good of the whole;
  • the organisational ‘brain’ performs (frequent) reorganisations on the ‘body’ parts, as if shifting pawns around a game board. The brain does this by dictating such redesigns to the body rather than asking the body if (and how) it could better rearrange itself;
  • The organisational ‘brain’ thinks that the answer to an increasingly complex environment is simply to increase the quantity and regularity of communication with the ‘body’ parts. This fails to realise that communication is not the underlying problem.

But the reality for every organisation is that they have purposeful parts – you and I – whether they like it or not…and so to treat these parts as merely having a function for the whole is to inevitably generate conflict.

A social model applied to an organisation

…and so we reach the point at which we conclude the obvious that:

  • the organisation (hopefully) has a purpose;

AND

  • the humans working within it have separate purposes.

…and therefore any management model that doesn’t understand and work within such a social system will be very limiting – causing loss of immeasurable value to the organisation AND to the people within.

Now you might say “okay, interesting stuff, but treating an organisation as an animated system and using command and control methods has worked fine so far…why do we need to change?”

The rate of change in our world has been massively accelerating. It used to be that change was seen as generational and this made it relatively easy for people to adapt but this no longer holds true.

Organisations are operating in more complex and less predictable environments with the result that:

“Over the last 50 years, the average lifespan of S&P 500 companies has shrunk from around 60 years to closer to 18 years.” (Source: The art of corporate endurance )

Here’s a classic Deming quote: “It is not necessary to change. Survival is not mandatory.”

But if survival is desired, then the best chance that an organisation has is to operate a management model that actually fits with the correct type of system! In so doing, it can get the best out of everyone within.

What might this model look like? Studying ‘Deming’s 14 points for Management’ would be a great start. A post to follow next.

Who’s been successfully operating a social model for decades? Two brilliant examples are Toyota and Handelsbanken.


Footnotes:

1. Credit: The core of this post comes from learnings derived from a classic Ackoff essay entitled ‘Reflections on systems and their models’ which can be found in the book ‘Ackoff’s Best: His classic writings on management’.

2. I’m aware that other system thinkers have created other, more sophisticated, classification schemes (e.g. Boulding, Beer). Ackoff’s system types nicely serve the purpose of this post.

3. This fact is probably relevant to the need for, and creation of ‘soft systems thinking’…which is where Peter Checkland’s work fits in (A ‘giant bio’ currently in draft)

4. For those ‘system’ geeks out there: Ackoff explained a 4th system type, that of an ecological system – where the parts are purposeful but the whole is not. Ecological systems contain interacting mechanistic, organismic and social systems, but do not have a purpose of their own. However, their function(s) serve the purpose of the systems that are their parts.

Example: the purposeful use of fluorocarbons as propellants by humans (a purposeful part of the ecological system) affects the ozone layer in a way that is determined, and not a matter of choice for our planet (the whole)…the planet cannot decide that it is harmful to it and decide to ‘do something about it’– the outcome (even though we may not understand it) is determined.

5. Henry Ford realised the problem and, in an attempt to compensate for their conditions, paid his workers well as compared to what they could earn elsewhere.

6. Stafford Beer wrote a famous book called ‘The brain of the firm’ (1972) that explored in detail the analogy of an organisation working as the human body does.

“What I think is…”

InformedI’d suggest that every day in our working (and home) lives we are asked for our opinion on something. In fact, such a situation probably occurs dozens of times every single day.

Let’s drill down into a single instance and consider the basic pattern of dialogue: we listen to someone state, and maybe explain, their thinking with regards to what they deem to be a problematic situation (explained below)  and then we start an immediate response with words like “I think that…”.  Worse, we may state our ‘thinking’ (perspective) as fact and we may mistake our feelings as rational logic.

I have a constant battle with myself to avoid, pull back from, or recognise my fall into this vast pit.

A sideways look at ‘everyday life’:

Peter Checkland, in his ‘Soft Systems Methodology’ (SSM), came up with a rather nice device that assists – the idea of ‘problematic situations’.

“As a member of the human tribe we experience everyday life as being quite exceptionally complex. We feel ourselves to be carried along in an onrushing turbulent stream, a flux of happenings, ideas, emotions, actions, all mediated through the slippery agency of language, all continually changing.

Our response to our immersion in this stream is not simply to experience it. Beyond that, we have an innate desire to try to see it, if we can, as meaningful. We attribute meaning to it – the ability to do this being one of the characteristics which marks us out as human.

Part of this meaning attribution is to see chunks of the ongoing flux as ‘situations’. Nothing is intrinsically ‘a situation’; it is our perceptions which create them as such, and in doing that we know that they are not static; their boundaries and their contents will change over time.

Some of the situations we perceive, because they affect us in some way, cause us to feel a need to tackle them, to do something about them, to improve them.” Thus we perceive such situations as ‘problematic’ i.e. something to intervene in.

This neatly dovetails with my last post in respect of Ackoff and messes vs. abstract problems. Just as Ackoff didn’t like the simplistic word ‘problem’, neither does Checkland. …and for the same reason: ‘problem’ implies ‘solution’ but, as he puts it, “real life is more complex than that!”

Back to that opinion we have been asked for

How do we arrive at our thinking? Do we have enough knowledge to justify a response?

Here’s another useful passage from Checkland:

“In human conversation, each of the persons involved influences others and is also influenced by them. Out of this two-way process comes what the participants are creating as their notion of changing ‘reality’. These acts of creating reality are never complete, and so have to be examined as only a part of a never-ending process.”

i.e. Any response we provide isn’t, and cannot be, ‘concrete’*. We have, and will always have, much to learn. Of course, it’s absolutely the case that our mindset (and where it sits on the ‘fixed – growth’ spectrum) will determine in which direction(s) and how far our thinking will travel during, and following human interactions.

(*yet, in many situations, we are easily satisfied with superficial response(s) and make key decisions based upon them)

I’d like to propose a few ‘alterations’ to our language to more accurately express the reality whenever we offer our opinion. How about we start our replies with:

“what I currently think is…”; or even better

 “what’s just popped into my head as a response is…”

Because, let’s be honest – we weren’t thinking about it 5 minutes before we were asked and we have press-ganged our brain into providing a timely reply. Further, our ‘answer’ isn’t exactly complete. It’s just an initial train of thought based on what we have been exposed to, and heavily weighted by its recency.

Even thinking about adjusting our replies to being less certain is likely to help us contemplate what we actually know to respond.

I could be flippant here and say that, if you ask me what I think, I should reply that I don’t know yet – ask me on my death bed…because that’s when I will have finished* assimilating all the information available to me. (* though likely, I presume, not by my choice)

Rather than taking this unhelpful line of reasoning…let’s look at what lies within:

Knowledge, not opinions

i.e. the idea that I need to take my time, gain (and therefore seek out) experience, understand the facts and expose differing perspectives before I provide a hypothetically useful reply.

So, even better than the “what I currently think is…” response would be to clearly explain the basis, extent (and therefore limitations) of our experiences in respect of the topic in play…so that we and the listener can appreciate why we currently think as we do…and our listener is encouraged to  reflect in the same manner. Gosh, we might end up educating each other!

“Real knowledge is to know the extent of one’s ignorance” (Confucius)

In a work scenario our response should often simply be:

“I don’t have the facts to make a valuable response…but I can do something about that…I’ll get straight to the gemba!”

…and if we do this, we will collect the facts, appreciate the environment in which they arise, and understand other perspectives…leading to meaningful change, towards purpose.

…which is an excellent link to three previous posts:

…and I’ve also set myself up for a follow-up post on the ‘soft systems thinking’ topic of ‘Worldviews’. Here’s a teaser to end with:

“The systems approach begins when first you see the world through the eyes of another. [It] goes on to discover that every world-view is terribly restricted. There are no experts in the systems approach.” (C. West Churchman)

So, you think you’ve got a problem!

Mr MessyI wrote in my bio of Russell Ackoff that he was a favourite giant of mine…but I haven’t covered much of his work in my writings to date. I recently re-read a couple of chapters from his wonderful ‘Ackoff’s Best’ collection of essays on management (and education) and this post is the result.

Ackoff wrote that:

“There are four ways of treating problems: absolution, resolution, solution and dissolution.

1. To absolve a problem is to ignore it and hope it will go away or solve itself; 

…and how much of what occurs around us (in whatever organisation) fits into this category?!


2.  To resolve a problem is to do something that yields an outcome that is good enough, that satisfies. Problem resolvers…try to identify the cause of a problem, remove or suppress it (relying on ‘experience’ and ‘common sense’), and thereby return to a previous state;

 …this fits with a ‘copying’ what you or others have already done, and an ‘implementation’ mentality. Nothing’s really been solved, just hidden or worked around;

…to my mind ’outsourcing’ fits here: i.e. the hope that ‘giving the problem to someone else’ to sort out for you is a good idea. (There’s a post ‘shouting to get out’ here)


3. To solve a problem is to do something that yields the best possible outcome, that optimises. Problem solvers…rely heavily on experimentation and analysis;

 …we may therefore move forward in a continuous and incremental manner

…but, whilst ‘solution’1 is a word that we all seem to be devoted to:

– no problem ever stays ‘solved’ due to the dynamic nature of reality; and

– every solution creates new problems. If you doubt this then reflect on the phrase that ‘Systems bite back’!


4. To dissolve a problem is to eliminate it by redesigning the system that has it [such that the problem no longer exists]. Problem dissolvers try to idealise – to approximate an ideal system – and thereby do better in the future than the best that can be done now.

 …this is to look at the ‘problem’ within its context – the bigger system that it sits within; to go ‘above’ the problem and look to understand how and why it exists in its wider environment;

…and, by redesign, achieve breakthrough improvement (or in Ackoff’s words a “discontinuity”).

Some ‘command and control’ organisational examples

…to ponder in respect of problems and their (re)solutions:

  • Why do we try to continually draft, and redraft cascaded personal objectives in the hope that we can make them SMART and good for the stated purpose of the system?
  • Why do we continue to fiddle with the incentives system so as to ‘motivate’ our people to ‘do what we want’, whilst increasing ‘controls’ to stamp out the resultant undesirable dysfunctional behaviour?
  • Why do we constantly strive to ‘give’ people empowerment (which is an oxymoron) and ‘make them’ engaged with their work, and yet continue to command and control what they do?

why don’t we look at the management system (which reflects management’s beliefs and behaviours) that currently requires cascaded personal objectives, targets, the rating of people and the dangling of contingent rewards…and redesign it …and thereby dissolve these recurring ‘problems’?!

(Clarification: A reorganisation does NOT qualify as redesign!)

So how do we redesign?

You study your system, get knowledge and then, and only then, intervene for the good of your employees and customers….which sustains a long-term result for your investors.

But you don’t simply ‘intervene’: The manner of your intervention is vital to the outcome.

In a recent post, ‘Think Purpose’ brilliantly explained a somewhat profound point – that “change doesn’t happen AFTER finding the solution, it IS the solution.”  His post (along with the simple yet insightful diagrams within) is worth taking the time to read.

Looking at what is written above, I see a strong correlation between dissolving problems and people understanding and improving their system for themselves.

Okay, so we’ve looked at different ways to treat a problem but…

What’s a problem anyway?

Ackoff went on to explain that:

There’s no such thing as ‘a problem’. They don’t exist – they are a concept. A problem is an abstraction, extracted from reality by analysis. It’s isolated from reality.

A problem is to reality what an atom is to a table: You experience tables not atoms – you experience the whole, not the parts that you have reduced it to by conceptual reduction.

What we experience (i.e. reality) are dynamic situations that consist of complex systems of problems, not individual or isolated problems. I call such systems messes.

When a mess, which is a system of problems, is taken apart, it loses its essential properties, and so does each of its parts. The behaviour of a mess depends more on how the treatments of its parts interact than on how they act independently of each other.”

“Erm, right…I think – got any examples to illustrate?”

Okay, I’ll go with two topical examples in the news.

Let’s start with Donald Drumpf3:

  • DrumpfProblem: (supposed hoards of) illegal Mexicans
  • Resolution: Build a wall! Obvious really :).
  • So how will that help? If you want a hugely funny take-down of Donald’s overly simplified problem-resolution thinking, watch John Oliver’s hilarious 18 min. piece about how determined ‘aliens’ will easily get around the wall. The bit where Donald answers his own question by suggesting they might just use a rope to lower themselves down is hilarious.

I could have written all day about other absurdly simplistic Drumpf-isms to everything and anything but, frankly, he’s too easy a target. What comes out of his mouth are supposed ‘resolutions’ to problems without thinking about the mess from which they come….and the many many new problems that they will spawn.

Without wanting to be political, I would note that Bernie Sanders appears to look underneath the problems at the systemic root causes, with a huge desire for redesign.

And so on to ‘BREXIT’:

BrexitOn 23rd June 2016 Britain votes on whether to remain in or leave the EU.

The ‘problem’ that the leaders of the ‘Leave’ campaign appear fixated on is the control of (supposedly unmanageable) immigration…mmm, there’s a similarity with Drumpf here.

Now, I’m not saying that leaving the EU is impossible – of course it’s not…but I believe that the suggested miracle ‘cure’ of leaving the EU is many magnitudes worse than the abstract ‘problem’ of resolving immigration.

An attempt at ‘dissolving’ the problem might look at why they want to leave their homes. Bombs could have something to do with it.

(If you don’t mind the swearing – I warned you – then I love this 3 min. Jonathan Pie ‘BREXIT’ video)

So what about an organisational example to end on?

Resolving the problem of high costs by ‘cost-cutting’ fits here!

We should remember that “Costs aren’t causes. Costs come from causes.” (Deming).

We can’t look at a line item in the management accounts, say it is too high and command that it be cut…and then not expect this to harm the system. The abstract ‘problem’ of a (seemingly) high cost cannot be separated from the system that causes it.

Ackoff’s ‘mess’ thinking now makes so clear the underlying reasons behind Seddon’s message:

“Managing value [i.e. the purpose of the system] drives out cost.

Cost cutting [i.e. an abstract ‘problem’] paradoxically adds costs, and harms value.”

To conclude

Here’s the hugely important point in a final Ackoff quote:

“A partial solution to a whole system of problems is better than whole solutions of each of its parts taken separately.”

  • A partial solution for the whole is good for the system’s purpose, and can be improved yet further as we study and learn more;
  • ‘Whole solutions’ to each part will likely harm, and can ultimately destroy, the system and its purpose.

Or, in American-speak:

  • A small step towards gun control is better than arming everyone4;
  • A small step towards cultural, racial and religious tolerance/integration is better than building a wall and throwing people out of the country.

Neither of these small steps eradicates the mess, but both start to untangle it.

Notes:

  1. Many ‘Lean (Systems) Thinkers’ prefer to use the word ‘countermeasure’ rather than ‘solution’ because they understand the reality of a complex and dynamic system;
  2. If you are new to this blog and don’t appreciate what the word ‘system’ means then please take the time to enlighten yourself  – this is foundational to everything;
  3. If you don’t know why I’m calling Trump ‘Drumpf’…John Oliver provides the answer 🙂
  4. Here’s Donald Drumpf’s simplistic rationale on arming the ‘good guys’ (who ever they may be!): “[the recent massacre in Paris] would have played out differently with the bullets flying in the other direction.”
  5. I’ve always intensely disliked the rather conventional ‘go after the low hanging fruit’ business improvement phrase, which refers to taking a cursory glance at something, coming to some quick judgements and ‘wading in’ with solutions. The phrase “Don’t think about it, just do it” springs to mind! Ackoff’s brilliant systems thinking work firmly puts the ‘low hanging fruit’ mentality in its place (at least for me anyway).