Systems thinking: seeing the forest as well as the trees.
When dealing with business issues and problems, we often adopt an analytical approach – breaking down interesting situations into their elements for close and more detailed examination. We are so familiar with this approach that we don’t think about the underpinning philosophy of analysis – Logical Empiricism. Education has prepared us for a semi-scientific approach to problem-solving, which takes it for granted that an inquirer should be independent and adopt an objective stance. We seek for explanations by gathering data and sifting through it to uncover causal relationships. Of course, when business problems arise, we also need interpretive approaches where people closely involved in a situation use their experience and contextual understandings to give depth and richness to inquiries – not pretending to be objective.
Larger organizations often have teams of dedicated, professional strategists who scan the organizational environment for relevant data. In smaller enterprises, it is the proprietors themselves who face all the challenges of management. Perceptions that businesses can be guided through a process of rational planning are persistent (see, e.g. Beveridge, 2002). However, the concept of rational business planning has been widely criticised for some time. An organization of only medium size would require a bulky and constant supply of data for analysis, processed to provide a continuous stream of high calibre advice. Time for reflection upon that advice, to formulate choices and to make judgments would also be needed. Thus, by the time a rational plan could be devised, the business environment would have moved on. This endless game of ‘catch up’ that would render planning processes unmanageable in practice. Lindblom suggested that the best we can do in these circumstances is to ‘muddle through’. In fact, rational planning very often gives way to a more interpretive approach, seeking to ‘satisfice’ rather than optimise business outcomes. Even with much-vaunted ‘Big Data’, these difficulties are not reduced – see Bernard Marr’s commentary ‘Why Big Data means nothing without Little Data’.
Of course, this does not mean that attempts at planning in organizations are futile. Walsham (1993, p.143) suggested the reality of strategy formation to be ‘a dynamic socio-political process within multi-level contexts’. The term ‘satisficing’ was coined by Simon, working with game theory. Managers cannot attain optimum performance, maximising profits at all times, for the reasons suggested. However, they can maintain a state which is regarded by interested stakeholders as satisfactory – keeping the business on an even keel. This process is described by Simon as bounded rationality. Sir Geoffrey Vickers put forward the idea of ‘relationship-maintaining’ as the primary task in steering organizations. A manager’s function is not to define goals and objectives, but to gain an understanding of current states, together with views of the way things need to be (desirable future states) in order to maintain a business in equilibrium with its environment. For Vickers, it is the continuing process of learning about the organization in its environment, through which goals and objectives are established, that is most valuable. It leads to on-going improvements in appreciation of activities and environment over time.
Whether managers espouse a view that organizational activities can be planned, or recognise that they are engaged in an on-going attempt to maintain equilibrium with business environments, what is clear is that this is an holistic exercise requiring involvement from every sphere of organizational life. While firms may be structured around distinct, functional activities or in multi-skilled teams, management must take into account all contributions as part of the on-going learning process.
Stafford Beer set out the boundaries of a problem for those of us educated in Western traditions:
“We are the inheritors of categorized knowledge; therefore we inherit also a world view that consists of parts strung together, rather than of wholes regarded through different sets of filters. Historically, synthesis seems to have been too much for the human mind – where practical affairs were concerned. … The modern world of science and technology is bred from Aristotle and Aquinas by analysis. The categorization that took hold of medieval scholasticism has really lasted it out” (Beer, 1973 p.63)
In other words, we cannot see the wood for the trees! We have been disqualified by our education.
Through systemic thinking, on the other hand, we may be empowered to see the world as ‘wholes regarded through different sets of filters’ as Beer envisaged. Systems thinking is characterised by certain concepts that are relevant in, and transcend the boundaries of, many specialised fields (e.g. biology, economics or geography). These concepts include emergence, hierarchy, communication and control.
The term ‘system’ is a label we use to refer to a mental construct by which a ‘whole’ is perceived by an observer to emerge when certain components come together in an organized and purposive way within a certain boundary. It is important to recognise that a perceived system does not model any reality – it is a construct that allows us to examine and argue about aspects of the world we perceive around us (Checkland, 1985 p.765). It follows that systems ‘exist’ because we choose to see them as such.
Although many of the phenomena we refer to by using this term appear to be part of the physical world, e.g. an engineered artefact such as a heating system, even these owe their holistic qualities to conceptions in the minds of designers and engineers and were brought about by application of creative thinking. The systemic qualities of a machine are designed into it through reflection upon mental models of possible interactions between components that could lead to (different) desired outcomes.
In a social context, it is people who interact, or reflect on interactions, who perceive systemic qualities to emerge. We can see therefore that any system’s ‘existence’ is essentially a description of systemic qualities perceived by an observer – whether this person is a creator or user of that system, or is reflecting experiences more generally. Emergent properties of the interactions inherent in a system appear to a particular observer because this is what makes it a relevant construct to him or her. This involves defining a boundary between the system and the environment within which it acts, i.e. choosing to see a distinction between what is regarded as part of the system and what is not. Boundaries are a matter of choice, and it is important that we ask ourselves from what particular stance a system appears to have the characteristics in question? Clearly, any observation is made from the point of view of an individual who observes. Every person has a unique perspective (or set of perspectives) of her or his own, shaped by an entire life experience – what Vickers refers to as appreciative settings. Viewpoints vary depending upon the role an individual is playing at a particular time, and the values that appear relevant to that particular context. This is one reason why, for instance, the descritions of events by different witnesses often seem to differ quite widely.
An individual may find it relevant to develop a mental model of a system, set in its environment, as an integrated, purposeful whole. However, particular interests may render some part(s) of that whole interesting for a deeper examination. Looked at in this way, that part can be perceived as a coherent and purposeful whole, i.e. what was earlier perceived as a sub-system now becomes the relevant system in its own right. A hierarchy of perceived systems appears, each interacting within a wider system of which it forms a component part.
Adopting a systemic view changes perceptions about the role of management in an organization, as interactions are highlighted rather than functions. Viewed through this lens, the concept of hierarchy relates not to linear relations of authority and responsibility but to interactions between purposive and integrated ‘wholes’. Seddon (2008, p.70), discussing design of systems to deliver public services, emphasises the importance of what he terms ‘counter-intuitive’ thinking. He points out the limitation of traditional ‘command-and-control thinking’ in service organizations since it focuses attention on functions, targets and budgets in such a way as to fragment the mental models about organizational life held by the participants.
The environment within which living individuals and organizations interact is in a constant state of flux. Change is experienced, not as exceptional but as normal. As ancient philosopher Heraclitus pointed out, a man cannot step twice into the same river, since both the water and the man will be different as time passes. People in organizations need to make decisions in order to maintain relationships with wider systems and environment (i.e. non-change is not an option). Management writer Charles Handy referred to a problem some organizations have experienced as ‘boiled frog syndrome’ – a frog dropped into hot water immediate jumps out, but a frog placed in water that is slowly heated will fall asleep and eventually die. So, failure to notice and respond to changes in its environment will be destructive for any system. Problem definition and re-definition will be needed constantly if an organization is to perpetuate itself and achieve relative stability within its environmental constraints. At the same time, a constant re-evaluation of problem solutions is required and this leads to a continual demand for ‘new’ ideas.
Pidd (1996), in his work ‘Tools for Thinking’ draws a distinction between different types of dilemma facing managers in steering their organizations. Viewed at the highest level, there appears what Ackoff, describes as a mess – an ambiguous set of circumstances where many different interpretations of what is going on are possible and there may be no agreement on the nature of problems or constructive ways forward. Pidd contrasts a mess with a puzzle, i.e. a set of circumstances where issues are clear, options are evident and necessary action (i.e. solution) becomes readily apparent. Between these two extremes, decisions are required to address problems, i.e. those challenges where issues are not entirely clear, options need to be developed and it is not at all obvious what the best solutions is among a range of choices. Pidd’s advice to managers is:
“One of the greatest mistakes that can be made when dealing with a mess is to carve off part of the mess, treat it as a problem and then solve it as a puzzle, ignoring the links with other aspects of the mess” (Pidd, 1996, p.70).
It is clear therefore that managers face challenges that require them to focus on issues but not lose sight of links to other aspects of a messy situation. Viewing the situation using a systems lens supports a focus on interactions. A view of systemic hierarchy, rather than analytical breaking-down, supports problem structuring and decision-making. However, any systemic construct can only be created from the point of view of a particular observer. Our ability to ‘step into one another’s shoes’ in particular contexts is very limited. This supports Seddon’s view that effective management of organizational systems depends not upon chains of command but on effective integration of decision-making and work. A focus upon links between purposive (sub-) systems also serves to highlight wasteful and duplicated efforts that are not helping to maintain equilibrium between the organization and its environment.
When considering the world from a Systemic perspective, we are essentially focusing on transformations. When coal is burned in a power station, energy emerges that can be used in many different applications, from central street lighting to electric toothbrushes. When we consider complex systems such as organizations, these transformations require more careful consideration. Emergence is a key feature of Systems thinking, i.e. when interconnected elements are organized together in a certain way, it is possible to view the result as an emergent whole that represents more than the sum of individual contributions from its parts. When many individual actors are present to interact in a purposeful way, with varying skills and with resources made available to them, an organization emerges. Such a view provides a powerful vehicle for reflection upon organizational behaviour
Environments within which living individuals and organizations interact are in a constant state of flux. Change is experienced, not as exceptional but as normal. In response people and organizations need to make decisions, i.e. non-change is not an option. Problem definition and re-definition will be needed constantly if an organization is to survive and achieve relative stability. At the same time, ‘muddling through’ requires a constant re-evaluation of messy, problem situations – the solutions that are effective today may not be useful tomorrow. This leads to a continual demand for ‘new’ ideas, i.e. to find new solutions to problems or possibly to create new, more interesting problems to which ‘solutions’ can be sought. However, many of us have experienced organizational change projects as painful and of dubious success. Management literature offers many prescriptive models for organizational change (see e.g. Kotter, 2002 8-step model). However, Senge, et al (1999) comment on this by suggesting that understanding success factors in sustaining change requires us to adopt the same thinking processes as biologists (p.6). They go on to suggest:
“Sustaining any profound change process requires a fundamental shift in thinking. We need to understand the nature of growth processes (forces that aid our efforts) and how to catalyse them. But we also need to understand the forces and challenges that impede progress, and to develop workable strategies for dealing with these challenges. We need to appreciate ‘the dance of change,’ the inevitable interplay between growth processes and limiting processes” (Senge, et al, 1999, p.10)
In other words, we need Systems Thinking.
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