The basic managerial idea introduced by systems thinking, is that to manage a system effectively, you might focus on the interactions of the parts rather than their behavior taken separately. – Russell Ackoff
We have a tendency to focus on things – try and identify the one thing we can understand and improve.
That has been a very successful approach – taking something and deconstructing it, figuring out how it works.
It’s the basis of the scientific method and rational thinking and has created the modern world.
But the process of deconstruction always loses something – and it’s not always obvious what that is.
Because you won’t find it in the pieces that you’re left with.
So what is this thing and how can you be intentional about the way you go after it?
Imagine you’re running a large business with lots of departments that do different functions.
Which function do you think is the most important one?
Your sales people will argue that it’s what they do – without the customers they bring in you have no business.
The operations people will counter, saying that if they don’t make things people want the sales people will not have anything to sell.
Finance will weigh in now, pointing out that without their ability to keep money flowing in the business no one would have the space and time to do what they need to do.
When you think about it you realise that you need all the departments to function – or at least you need the essential ones to deliver your capability and you need the others to do superior work.
The performance of the business as a whole depends less on whether you have an amazing sales director or the most qualified finance person in the country than on whether they work well together as a team.
If you go and look for “performance” in the business you won’t find it in sales or operations or finance.
You might see performance in the shape of satisfied customers as a result of their interaction with your business at the various points at which they connect with each other.
Performance or customer satisfaction are “emergent” properties – they happen as a result of everything you do not from any one thing.
Making the best car in the world
This is why you cannot make things better just by improving one thing – and it’s the reason why improvement efforts focused on a particular function or department don’t deliver results as a whole.
The management thinking Russell Ackoff used to use an example with cars.
Imagine you want to build the best car in the world.
You start by getting a collection of the best cars in the world right now, one of each type.
You get the fastest one, the best looking, the biggest, the best seller,
Now that you have the best cars in the world you take them all apart.
You compare the pieces and select the best ones from each – the best suspension, chassis, engine, exhaust, seats.
And then you put them all together and now you have the best car in the world.
After all, it’s made from the best parts in the world, so it must be the best, right?
You know that isn’t the case – you’ll be lucky if the car even starts and moves.
It’s not the parts that make the difference, it’s how they work together.
Each of those “best” cars had components that fitted together and worked together to deliver that performance you rated as “best”.
Another way to think about this is the idea of “dream teams”.
There are individuals who play brilliantly in their teams – perhaps for various clubs with players from different countries.
Then, when you have a national game you get your best players together from these clubs – the superstars of the game and put them into a team.
Isn’t it odd how they seem to find it very hard to win – these are the best players at their clubs but together they don’t seem to be able to deliver a result?
Again, it’s because being the best isn’t enough – you need to be able to play well with the others in your team.
It’s a simple concept but one that many people just don’t see – because we’re so caught up in the approach that says you have to focus and have a target and be single minded to achieve something.
We fail to see that it’s about more than that one thing.
Seeing the things that matter
One way of seeing everything rather than one thing is to create a simple model.
Think of the things that matter – the things you need to do.
Write each one and draw a circle around it.
Then, draw arrows from each one to the others to indicate dependencies.
Finally, draw a circle around all of them.
This model has a number of properties.
It has a boundary – the things inside the big circle are the main things you need to do.
In our business example, there are things that you might think of like marketing, sales, operations, finance, logistics, strategy.
Some of those things are things you can do – things that go inside the big circle as little circles.
I’d probably include things like marketing, operations, sales,
But what about strategy?
Well, if you need to write a strategy document, perhaps it goes inside the circle but strategy could also be the whole picture itself – the strategy emerges from being able to clearly see everything that needs to be done.
And that happens because once you have the small circles of things to do you draw arrows that show what happens first and what happens next and if there are feedback loops where something that happens affects how you look at something that happens earlier.
Feedback from prospects, for example, may lead you to change your marketing message or tweak your product in operations.
Now you’re probably used to making a list of everything you do but the main thing that happens when you do it in this way is that you intentionally look at the relationships and dependencies between things.
This simple approach shows you everything you need to do and also tells you what you need to do first.
You start with the areas that have arrows pointing away from them but none pointing to them.
That’s the beginning.
Then you have the ones in the middle that have arrows pointing to them and have arrows pointing away from them.
And you end with the ones that only have arrows pointing to them.
This shows you everything you need to do and the order in which you need to do them – a strategy in one simple image.
Keep this high level – with only 5 to 9 nodes.
More than that gets complicated and you rarely need them.
If you want to expand on a node create a separate diagram for it.
What happens when you do this?
When you look at this map of nodes and relationships explicitly you can see you need them all to operate together for your business or project to succeed.
Imagine that the nodes are logs and the connections are strings.
Like in the image below, you need to choose logs that float and string that holds them together.
Lead logs and spaghetti won’t work – you need wood and cord and the thing you build needs to be sound and strong and fulfil its purpose if you are to stand on it and stay afloat.
But that’s what you’re doing when you’re building your business or starting your project – doing something with purpose and making it work.
So, how do you do it well?
You start by learning how others do it well – which is what we’ll look at next.