Problems and potential in the system

Models of organisation 3

We all see organisations through different lenses. One commentator says that organisations are all about the people (‘our greatest asset’) a second will attribute success to efficient processes (‘a well-oiled machine’) others seek gifted and heroic leaders (overpaid but ‘worth it’).

Meanwhile, sustained organisational success remains elusive:  experience suggests that very few of today’s FTSE 100 companies will be in existence, never mind successful, in 30 years’ time.

In recent blogs I’ve been looking at how the models in our heads determine the way we manage our organisations and how we address their problems.  I’m not arguing that any particular model is ‘right’ or ‘wrong’.  But (to paraphrase Stafford Beer) some may be more useful than others and being aware of the model we use and opening ourselves up to other possibilities might give us an advantage in the tough world of organisational survival. In this blog I will explore a model (of organisations as systems) that offers richer possibilities for problem-solving and has the additional advantage of allowing the organisation to shift the focus from problem solving to the realisation of potential.

When organisations experience problems managers commonly respond in the terms suggested by the classic, bureaucratic model because that model (rarely recognised as one approach among several possibilities) has had so much influence on thinking and practice.  From this perspective, organisations are like machines: when a part or a process within it fails a discrete repair or replacement is required.  But are organisations, in fact, as simple as this?  Sometimes the presenting problem is really a symptom of a more complex issue.  A voluntary sector organisation is losing money and closing down its centres.  At one level the problem is obvious: financial and operational systems and controls are out of date and there are no standardised or consistent procedures.  From the point of view of the classic theory a straightforward modernisation is required, based on the application of current standard processes and technologies: some parts are not working and need repair or replacement. And, in itself, the diagnosis is correct.  But this is a traditional organisation, composed of people worried that the application of ‘business’ will be accompanied by a loss of values and identity.  These are people whose mental model is vocational.  They are less worried about efficiency, about doing things right, than about maintaining values and beliefs as the basis of action: doing right things is what matters. To impose the obvious changes required would risk creating a tide of anxiety and resistance that would undermine all the good intentions and, probably, destroy the organisation.  The overarching ‘problem’ is how to help the leaders and people of the organisation re-articulate its identity in a way that allows its people to embrace an appropriate and tailored renewal of the way they carry out their mission so that business efficiency is seen as serving the mission, not distorting it.  It is not that the conclusion reached on the basis of the classic theory is ‘wrong’: in this instance at least, it is right in so far as it addresses a ‘what’ but it doesn’t offer an appropriate ‘how’.

I want to suggest that seeing organisations as complex adaptive systems does more justice to their inter-connected and multi-faceted nature.

The systems approach sees organisations as complex entities not only in that they have many and various parts but, even more, in that that they come to life as a result of the interactions between those parts.  A key characteristic is that some properties emerge only from the interactions of the whole system, properties that cannot be found in the parts or in a decomposition of the system.  Systems thinkers draw on a number of sources for analogies, including natural phenomena such as living organisms (like you or I, for example), but even a relatively simple system illustrates the importance of this interactivity. Russell Ackoff supposes that, to build the best car, an automobile maker gathers the best parts from a whole range of different cars.  After a while he has gathered the best engine, the best carburettor and so on:

Then we ask the engineers to remove and reassemble these parts. Would we obtain the best possible automobile? Of course not. We would not even obtain an automobile because the parts would not fit together, even if they did, they would not work well together. The performance of a system depends more on how its parts interact than how they act independently of each other.(1)

We can, as in Taylor’s Scientific Management (2), understand and manage organisations by treating them as machines, breaking them into their parts and dealing with each part discretely.  But if we do that we may miss what is most important – the relationships between the parts and the emergent properties – and the reason why they exist in the first place.  On the other hand, we can try to understand the dynamics of the system as a whole, what it needs to do to sustain itself.

There are three things that any organisational system must do to ensure its continued viability.

1. It must maintain and improve the core process that generates value for those it serves
2. It must co-evolve (adapt) with its environment
3. It must preserve its integrity and remain itself (3)

Using this framework to understand and work with organisations it becomes possible to approach problems differently.

Let us suppose that sales are disappointing.  The more usual response will likely focus on the sales force in isolation and lead to conclusions about competence, processes or motivation – and, of course, as we have seen, these conclusions may be valid, at least as far as they go.  But the system perspective suggests a range of additional possibilities such as:

• The sales team is representing the product in the wrong way or to the wrong audience or to the wrong problem because it has no sight of, nor influence over the overall strategy and design/production process
• The product is no longer right for the market in view
• The sales team does not believe in the product – not because it doesn’t work, but because it is not ‘right’ for the organisation

But the bigger advantage is that seeing the organisation this way allows leadership to shift its focus from solving problems to releasing the potential in the organisation.  And that is so much better and easier for everyone. Specific problems are better managed close to where they occur anyway.

More complex systems tend to have a capacity to reproduce themselves, a life of their own. This means that, under the right conditions and with the right support, they can become self-regulating and self-sustaining.  It means that the boss neither can, nor needs to, drive everything.  Instead he or she can turn the self-organising qualities of the organisation to advantage, help it work in a positive and productive way by developing its capacity to self-regulate.  In particular, he or she can (with others):

• Create a shared understanding of the organisation’s identity and refuse to compromise it
• Create a shared understanding of what the future will look like – as far as you can tell
• Ensure that everyone knows what the current processes are supposed to achieve – not just in money, but across a range of outcomes
• Ensure that everyone knows what they are being asked to do to contribute to the whole
• Value and nurture and work through the relationships on which the whole venture depends
• Let everyone get on with it while you watch, monitor, listen, suggest, encourage

Seeing the organisation as a system is harder in some ways – but it is also easier.  Nothing guarantees success but changing the way you think about organisations can make a real difference. If you’d like to know more about organisations as systems the most complete and useful account I know is called The Intelligent Organisation: Realising the Value of Information, and is written by my colleague John Beckford and just published by Routledge.  You can access John’s website dedicated to the book and its content here.

Notes

1 Ackoff, R.L. (1981) Creating the Corporate Future, Wiley, New York

2 Taylor, F. (1911) The Principles of Scientific Management, The Plimpton Press, Norwood, MA

3 Proposed in Peter Dudley’s development of Stafford Beer’s Viable Systems Model