A Requirement for all Employees
Systems thinking is fast becoming a powerful tool for decision-making and organizational change. All employees in a company should be equipped with the skills necessary for systems thinking. It is imperative to have some awareness of the origin of systems thinking and how it can be of benefit to various types of organizational change, such as reengineering, systems integration, process redesign, Total Quality Management, and team work. In order to apply systems thinking to challenges that occur in the work place some of the tools and methodologies used in systems thinking should be taught. Some of the best known strategies used to implement systems thinking include systems modeling, simulations, causal loops, archetypes, and scenario planning. To meet the complex changes that are inevitable, systems thinking can no longer be esoteric knowledge held by a few managers, but should be accessed by all.
Systems Thinking: A Requirement for All Employees
No longer can a person feel the safety and comfort of merely doing a day's work for a day's pay. Neither can an employee quietly pursue his or her job, unconcerned about what the other person is doing. That simplicity of organizational life has vanished, never to be felt by the work force again. Combine the increased complexity of jobs with almost insurmountable global competition, advancing technology, and the never ending need to improve performance, and this adds up to a need for change. This is not just change in the way things have always been done, but change in the way things are thought about and viewed.
Now more than ever before, systems thinking is crucial for the entire work population. In the past systems thinking knowledge and the tools to appropriate it were used mostly by higher level management who had received training in the discipline. Mid-managers and supervisors were not exposed to it as a formal process for facilitating decision making and problem solving. Instead they relied on intuitive reasoning. Now as companies are flattening their organizational structure and pushing added responsibility further down the line, it is germane that an understanding of systems thinking be made available to a wider range of employees. This need not involve the mathematical rigor that is typical of much systems thinking, but rather comprehension of the basic concepts, processes, tools, and benefits. As employees begin to see the enormous complexity of their organizations as a system and how systems thinking can diagnose problems, identify consequences, and reveal needed changes, it will emerge as relevant learning that produces greater efficiency.
Understanding Systems Thinking
Systems thinking has spawned numerous related academic disciplines and advanced degrees. In the 1960's Jay Forrester developed a branch of systems thinking which focused on organizational change. Hence the field of system dynamics emerged (Senge, Kleiner, Roberts,Ross, & Smith, 1994). The very term implies that constant change within sociotechnical systems is a given. It is this aspect of systems thinking that is so relevant to contemporary organizations struggling to maintain their competitive edge.
It is interesting to note that there are several ways to classify systems. Peter Checkland's classification system (as cited in Richardson, 1991) described the purposeful activity of human beings as human activity systems. This classification includes organizations, industrial activity, and political systems and is the one which is of most interest to managers and employees. These kinds of systems are referred to as soft systems and are usually described by language rather than mathematics. Such systems will include several basic concepts. Because it is a system of purposeful activity there will be goals, objectives, or purpose. Connectivity will exist as systems imply an interrelatedness. Organizational systems must also have some way to measure performance and make decisions, but these processes have control mechanisms which act within certain boundaries or areas of responsibility. If systems objectives are to be met, resources must be available. Finally, a human activity system will be a part of a systems hierarchy. It will be a subsystem within a greater system, or it will be a larger system incorporating smaller subsystems within itself (Wilson, 1984).
Comprehending and acknowledging the theoretical underpinnings for systems thinking is necessary to provide a foundation for methodologies and tools which are transformative, able to change how we think. Otherwise, such tools and strategies may not be generalizable and give no clue into what is causing our problems. Jay Forrester is credited with demonstrating how feedback processes can generate the patterns of behavior seen in large organizations (Senge et al. 1994). The concept of feedback loops helps explain some of the changes that occur within complex systems. Jay Forrester defined "a complex system to be a high-order, multiple-loop, nonlinear feedback structure", where feedback loops were seen as a major source of behavior and policy difficulties (Richardson, 1991, p.300). Patterns of behavior can be detected in feedback structures. Forrester feels strongly that the difficulty with comprehending and handling complex systems comes directly from their multi-loop structure. The system dynamics' thinker tries to see how these feedback loops contribute to different organizational behavior (Richardson, 1991).
Feedback loops are given various labels, from causal loops to reinforcing or balancing loops. These loops represent cause and effect relationships among the elements in the loops. A change in one part of the loop will result in changes in the other parts (Senge et al. 1994). Feedback loops will oftentimes compensate for changes that are imposed on the system. This refers to adjustments that elements within the loop make to counteract the direction of the change (Richardson, 1991). Since feedback loops are a conceptualization of the real system, serious study should be given to how they are constructed and used.
Impact of Systems Thinking on Organizational Change
Reengineering for Organizational Change
Integration for Organizational Change
Areas in need of systems integration may become apparent by using concurrent learning. This type of learning is similar to generative learning. Workers are encouraged to combine their actual work experience with learning to learn. They use systems thinking to view their work in terms of customer satisfaction and adding value to the organization, see how their work is related to the work of other people in the organization, and to identify any patterns or relationships that were previously unnoticed. Employees begin to understand how they are working and how they are being influenced by other people or processes. Through electronic communication individuals can express any unusual conditions that might warrant further attention. As small groups of people express the same concerns, application of systems thinking tools such as causal loops help to show how the system is currently working and if reengineering of the process is needed (Cavaleri & Fearon, 1994).
Total Quality Management for Organization Change
For quality to be managed it must be considered within a system thinking framework. The quality management systems in most companies are viewed as the servo-mechanism of the organization. The quality management system runs counter to the operational systems in the organization. Outputs that come from the quality management system serve as inputs to the operational systems, and information from operational systems about product, services, or processes serve as inputs to the quality management system. The quality management system (QMS) collects information on systems and subsystems concerning user requirements and the system processes which produce the outputs. Quality management activities should also be concerned with involving those people who can make needed changes in the inputs or production processes based on quality judgements about the information that has been collected. Care should be given to plan and implement whatever changes are needed to improve the quality of the outputs and efficiency of the processes. If the quality philosophy is a vision shared by all members in the organization it does not require a separate quality management system (Cusins, 1994).
Teams for Organizational Change
Aside from a sense of wholeness that teams develop as they interact with the various parts of the organization, there are other aspects of systems thinking that can affect the quality of team performance and relationships. Senge (1994) reveals four levels of a system working simultaneously within a team. None of these levels should be overlooked when trying to implement change. Qualities of action which are the unspoken actions exhibited by team members is the most observable level within the structure. A second level within the system's structure is the domains of purpose. Each team member may be driven by very different goals or purposes. These goals might reveal a need in the affective domain, a need for power or for meaning. Assumptions about authority and boundaries, as well as, deeply embedded views of oneself form two other levels of system's structure that may need to be examined if teams are going to be able to find solutions to their problems.
Change is an inevitable consequence of organizational life. It is obvious that systems thinking plays a vital role in many types of organizational change, whether it be a total reengineering, integration of systems, Total Quality Management, or teams. As very few things work in isolation, it is key that all employees view their decision making, resources, goals, processes, and consequences in light of the whole environment. Emphasis should be placed on improving the performance of the entire organization rather than single components.
Methodologies and Tools
This type of growth or collapse that the reinforcing loops picture can never continue indefinitely. There will always be something that limits it. This limiting loop is known as a balancing loop. Aside from its limiting function, the balancing loop also can provide equilibrium to those forces that may seem out of control. A system or process will find this equilibrium or resistance when it hits a certain goal or constraint which may not be known at first. Senge (1994) says that recognizing this constraint or goal and setting a new goal may help to overcome the limiting effect. In neither of the two types of causal loops do the variables proceed at an even pace. There are often delays that may result in a lot of wasted resources or energy if they are not recognized and accounted for. Causal loops may become extremely complicated making it difficult to wade through the minutiae of details to find the source of problems.
There is some concern that archetypes may be too complicated for most employees, but there are other helpful tools which can be used to bring systems thinking within everyone's grasp. Russell Ackoff (as cited in Gardner & Demello, 1993) developed "idealized design" which is a planning method that allows all stakeholders to see an ideal version of the present. It attempts to get employees to view this "idealized design" as the present, not an imagined scenario of the future. It allows participants to create a shared vision among different stakeholders, attend to customer needs, and stress the linkages and interdependencies that come into play throughout the organization (Gardner & Demello, 1993).
Process mapping is usually one of the first things undertaken when laying out the total system. It will show both the external and internal boundaries and interdependencies, along with important linkages. It gives management an opportunity to share mental models and test assumptions. Some frequently used mapping techniques are stock-and-flow maps, interrelationship digraphs, and macro flow charts (Wolstenholme & Stevenson, 1994).
Simulation has been discussed as a tool to view specific organizational environments, but simulation can also be used to teach systems thinking itself. Some simulations involve the use of computers, while others are behavioral in nature, requiring the participants to act out a scenario. These behavioral simulations create a microworld within which participants can interact with a whole range of business issues. These types of simulations provide a practice field where developing managers can apply systems thinking. Behavioral simulations differ from computer simulations in that individual or group efforts can be examined as if in a managerial work context (Stumpf & Watson, 1994).
One such behavioral simulation game is the Beer Distribution Game developed at MIT. This game dramatically illustrates that systems thinking controls outcomes no matter who is in charge. The point is to show managers how to use systems thinking to their greatest advantage. Concepts that are difficult to visualize or explain are actually experienced through this game. No matter who participates in the game, the same basic behaviors surface. Interestingly enough, players always blame someone else or feel that something outside their control was at fault. Toward the end of the game players are shown how the system caused the erratic results and how their decisions are a part of the system. They saw how some fundamentally bad management practices can impact the whole system. Even though this exercise takes approximately half a day, it provides a realistic picture of the importance of systems thinking and how an individual can impact a system (Goodwin & Franklin, 1994).
Foodcorp and Globalcorp are two other behavioral simulations used to develop managers and corporate leaders. They had similar outcomes to the Beer Distribution Game where players returned to previous mental models and methods of decision-making when faced with intense stress. In each of these incidents the feedback in the debriefing phase of the training brought out new insights into the value of systems thinking and more appropriate behaviors that might have been used. Both kinds of simulations provide opportunities for employees to explore the world of systems thinking and see its potential (Stumpf & Watson, 1994).
Royal Dutch/Shell is one of the companies that has made good use of scenario planning. Through careful research they foresaw the energy crisis of the 1970's and were able to prepare some "just in case" strategies which propelled Shell to the top of the list of most profitable oil companies. In the 1980's Shell used scenario planning to anticipate the reform movement to take place in Russia (Schwartz, 1991). Other companies have taken advantage of this systems thinking tool and seen the impact on their decisions.
Successful scenario planning sessions are based on certain ground rules. First assumptions about company norms, politics and structure, as well as, "face saving" efforts must be put aside to provide an open, nonthreatening environment. This questioning of organizational norms and assumptions in order to establish new ones is known as double-loop learning. Open communication and continuous questioning will facilitate this type of learning which requires a examination of the underlying values (Hosley, Lau, Levy, & Tan, 1994). Everyone must also be viewed on an equal footing without regard for rank or title. Finally, it is necessary for a facilitator to make sure that the session stays focused on the future that is being planned. Scenario planning becomes like a play where the actors are free to imagine the improbable. With this kind of backdrop it is possible to see how expanded thinking and creativity can take place (Thomas, 1994).
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