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Posts Tagged ‘systems theory

Our strengths are our connections to the environment

Our strengths are not in ourselves.  They are in our connections with our environment.  So says Ralph Stacey, complexity theorist at University of Hertfordshire.

What on earth does he mean?  Is this just some abstruse idea that I can safely ignore?  Is it some pop idea that it is not what you know, it is who you know?

Use systems theory to understand your business and take action!

I am going to explain this idea using ideas from MGMT101: very basic systems theory.

Imagine the world as set of concentric circles. Go on.  Draw them.  Draw three.

Outer circle : macro-environment ~ the cloud

The very outer circle is the big bad world ~ the macro environment ~ the cloud. This is where you do your PEST analysis. This is where we worry about Politics, Economics, Social Trends like birth rates and Gen Y and Technological Change like Social Media.  What is happening in the stratosphere of our lives?  It is important to know this stuff.  In the slow moving world of the 1950’s, it was possible to look up and do this once a year.  In this day and age, you should have a set of Google Alerts just for this purpose. If you are a large organization, you should have part of your intranet reserved for articles on these topics written by your own staff in their areas of expertise.

Outer circle but one : micro-environment ~ your pond

The next circle are your competitors ~ your micro-environment ~ your pond.  Who is in your pond?  This is where we use Porter’s Five Forces.  We think about what your customers actually want.  What are the benefits of our products and services (rather than our features).  We think about what it takes to get into this business (barriers to entry).  We think about the suppliers on whom we depend (and how much they or we call the shots).  We think about who else ‘wants in’ to the business ~ who are our competitors.  We think about what our customers could use as a substitute for our service our product.

The ecosytem of our pond is quite complicated and we are sometimes overwhelmed by thinking it out.  I’ve found two concepts really help.

  • Think of your lunch.  Who wants your lunch? The answer is often very surprising. After all, if scientists depend on government for their money, then they are in the businesses of public administration, government or politics.  This is usually an aha moment.
  • Think of the food chain.  We are often make jokes about being at the bottom of the food chain. Actually you want to be at the bottom of the food chain. If you are nobody’s lunch, then there is no reason for your existence.   Who dies if you die?  Often your existence is rather diffuse.  So let’s phrase that a little.  Who would be inconvenienced if you closed down? You can see why businesses try to create monopolies. They are safe if they are indispensable.  Here is another aha moment when you see clearly who are your allies in the great game of  commerce.

When we have our competitors (they want our lunch) and our customers (they eat us), we are on the way to describing the ecosystem of our pond.

Defining your micro-environment ~ your pond ~ is work that you have to do yourself

Both these questions about ‘lunch in the eco-system’ are hard to answer.  They are not like PEST which is common to huge swathes of people and answered in The Economist and other general sources like that.

These are questions you must answer.  I can suggest ideas. We can borrow ideas and insights from other people in the trade.  Occasionally we find a really good book on our business like Michael Riley’s Human Resource Management in the Hospitality Industry.  Mostly we have to sit down and answer

  • Who wants my lunch?
  • Who thinks I am their lunch?  Who depends upon me?

We need concrete answers.  Take photos for me.  Tell me what they had for breakfast and where they are are 2.17 in the morning.  Why that time?  Because you know them so well.

The third circle – who are you and what is your agenda?

With those concrete and specific answers we can define the next circle.  Who are you and what are your strengths?

Now we do the SWOT analysis.  What are your strengths ~ your internal capacity, or things that you do every day, that allow you to be who you are.  Your weaknesses ~ those things you wish you weren’t (but might just be the flip side of your strengths).  The opportunities ~ those things coming up that you really want to do.  Threats ~ those things upcoming that you want to get out of.  You SWOT analysis is just a fancy ‘to do’ list.

Your strengths are the things you like to do and that you probably did yesterday too.  That’s what makes us thing they are us.

But they are really a story that we tell ourselves about us.  That’s why we look partly at our inner talk. We have a story of who we are, who we secretly fear that we are, we we secretly want to be.   We will always have our secret fears and aspirations, but our happiest times are when most of our story is out in the open.

And what is our story?  It is the story of what we do with other people for other people while we are up against a threat (those who want our lunch!).  It is a playful story about people who are in this game ~ with us and against us.  Cheering us on and getting in the way!

We cannot tell this story with the story of the outer two circles.  We cannot tell this story with the story of our times – the PEST analysis. We cannot tell the story without the story of our pond – Porter’s Five Forces.

Our story is a story about real people.  You must tell me who those people are.

Your strengths are your participation in the game of life. Everything you say and everything you do, with real live people.

Tell me that story and I will show you a successful business and blossoming career.

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Toxic junk

“The great challenge of the 21st century isn’t churning out more toxic junk – it’s learning to make stuff that’s not toxic junk.” So said Umair Haque in today’s Harvard Business Blog.

Pointless work

Umair’s challenge reminds me a science fiction book that I read years ago.  Some bright young man, working in a high rise building slowly worked out that the papers in his in basket, and every one else’s in basket, never left the building. They were working on a closed make-work system and the papers were designed to circulate endlessly without achieving anything in particular.

Most people know that they work in non-jobs. I’ve even asked people commuting on trains into London what they do.  Some people laugh outright and say nothing.  Others will tell me some detail – like how to maintain the railway tracks.  Few people refer to the bigger picture though.  They know where the water cooler is.  They know when they get paid.  They haven’t much of a clue about what their organizations do.  More importantly, they don’t care ~

  • They assume it is normal not care.
  • Feedback loops are very slow so they don’t see any consequences.

Provided money is paid into their bank accounts, they assume it’s fine not to care too much.

Empty lives ~ lives we cannot call our own

Sadly, most of us do not feel that we are able to live full lives.   And even if we wanted to care, do we have the understanding or the competence to manage systems?

Systems surprise us

Lets take the example of Facebook that Umair uses in his example.  Facebook grew out of a college-student prank.  I am sure many people think it is evil. Without knowing the facts, I am sure College Adminstrators thought that at first. Now they just send requests for donations!  Simply, Facebook is a good example of how good things come out of laziness or mischievousness.   Our drive to take short cuts can innovate.

The converse is also true.  Many of the people who are sleep-walking through non-jobs believe they are doing good.

Very simply, the interaction between the system as a whole and our individual actions is too complex for the one to be reducible to the other.

Systems must be managed as systems

We have to watch the system itself.  We need metrics for a system, and we have to understand its possible trajectories.

We have to understand the complex way individual actions interact with the system and the slowness of the feedback loop connecting the two.  Because of that slowness, individuals need feedback about their individual actions over and above the trajectory of the system itself and their effect on the system.  All three sets of information must be available.

Let’s use an example uncluttered with the emotion of who-did-what

Let’s take the weather.

Weather systems vary world over and predicting the weather varies.   In some countries, the weather is very predictable.  In others it is quite changeable.

I lived in a place where it only rained from November to March. In that time, we needed to

  • Grow all the food we needed
  • Collect all the water we needed for the dry months
  • Protect ourselves against too much rain (floods, in other words).

It was well known that in the north of the country, that the rains would fail in 1 year out of 3.  We would never know which year the rains would fail and if we were wise, we kept enough food and water for three years (1/27 or about 3% chance of running out).  There was still the possibility of a drought four years in a row.  So we needed a plan for that too.

Managing at system level

In the south, rains failed on average, every 2nd year – so they had to plan harder.  In the north, we knew the basic parameters and we knew we had to

  • build enough dams
  • move water around
  • store food
  • and build big drains because when it rained, it rained!  It came down in buckets.  The drains had to be massive.

We could mismanage this system easily.  A full dam looks like excess.  Why not use the water?  Why be so prudent?

We could blame shortage of water on climate change.  It could be true, but if we haven’t stored enough water for what we knew already, which was the average frequency of droughts ~ well what can anyone say?  Recklessness is recklessness.

The system can be managed at system level.  And should be.

Managing at individual level

Now let’s look at the actions we needed to take at individual level.  My individual actions will not affect the presence or absence of a drought!  It won’t affect the presence or absence of dams or drains either.  If I judge my individual actions by the state of the system, I will get confused and become helpless and inactive.

But if I know that the dams are insufficient and the price of water will be high during a drought, I can store water for gardening and non-drinking purposes like flush toilets.  That is a judgment I make as an individual. I can ask myself will I have enough water and what am I going to do about it?

Actually, the house I lived in was plumbed to use a reservoir of water collected from the roof, but the reservoir had been removed when adequate dams had been built.  So my decisions work both ways.  Sometimes the munificence in the system allows me to take no action.

The general rule is that I had a multiplicity of choices to make at individual level to ensure that I had sufficient water for my needs and i made my decisions by taking into account all the factors at the system level.

Managing at the collective level

We can also manage our collective response at system level by voting for more dams, or by cooperating or not cooperating with rules prohibiting sinking boreholes to use underground water, for example.

My individual action alone won’t influence the system but some of my individual actions have some influence on the system!

Acting effectively

Now that I understand the system and the actions available to me, I can decide what I am going to do to maximize my interests.  These are steps that I take.

  1. I learn the basic parameters of the system to be managed (enough water for three years).
  2. I judge the health of the system for myself (shall I keep my reservoir to collect rain water or not).
  3. I judge the state of the polity and figure out whether to engage to improve the system or not, as the case may be.
  4. I judge whether I will act against public interest and use underground water (for example).

Those are my choices.  Similar choices will exist for any system.

If I were to pick on any one feature that can be influenced to change the state of the system, it is the state of the polity.  If I cannot pull people together, I have to wonder what will happen to the systems.  Will they spin out of control, as they did with the banks, and if that happens what will I do then?

I think what Umair was trying to get across was that many people have already opted for 4. They don’t care and are cashing in and running ~ though it is not quite clear where. But then when we are deranged, do we need a ‘where’?  If that is what he meant, then I agree, and I think we should turn our attention to engaging effectively – to pulling people together.  That won’t stop disasters. After all, even in a healthy polity, we might still have 4 droughts in a row.  But we can be certain that in an unhealthy polity, we withdraw, we become apathetic, we don’t even try.

Managing systems

Time to cross reference with the work Donna Meadows has done on managing systems and the work Karl Weick has done on systems.  Enough for tonight while I look those up!

My three points are this

  • The systems as a whole must be monitored at system level
  • Our individual actions will be judged against a simple criteria of fulfilling our own needs
  • We also have some individual actions that affect the system.
  • Because our individual influence is weak, we should put our energies into building involvement in the polity.  The more people are engaged, they less they will behave cynically.

But nothing will insure against bad things happening.  The system happens at another level.  Paradoxically, when we understand that, we are more likely to manage our affairs in ways that system events don’t destroy us.

Oh, I am so irritated.  I’ve been doing tax returns all day.  They have to be one of the most irritating things in life, and not because someone is taking money off us.  They are irritating because they are convoluted, fiddly, and complicated.

There are plenty of other complicated things in life too.  Airports with signs that send you anywhere except where you want to go.  Bosses who change their minds quicker than change their socks.  And road signs!  Zemanta, the Firefox Addon which searches the web while you write your blog, found this humbdinger of signage from Toronto, dubbed ‘The Audacity of Nope‘.

The opposite of complicated is complex

Instead of the stop-start sensation we get when details are allowed to disrupt the flow of the whole, complexity is when the parts come together to make something bigger themselves – like the mexican wave in a home crowd.

Is eliminating complicatedness and creating complexity the essence of professional life?

Do architects create buildings where we flow, never having to stop and scratch our heads, or to backtrack?

Do brilliant writers grab attention our attention in the first line and take us with them into a world where we follow the story without distraction from out of place detail?

Do leaders describe our group accomplishment, and draw us into a collective adventure, to play our part without constant prodding and cajoling?

How do you create complexity in your work?

In what ways do you help us experience the whole where parts fit in without discord?

  • What is the ‘whole’ thing that you make?  If you can’t name it, can you visualize it, or hear it?
  • What are the essential parts of the whole, and the linkages between the parts that are essential to form the whole?
  • What are the signs that you look out for that the whole is ‘forming’, or ‘not forming’, as it should?
  • What are the extra bits of help that from time-to-time you add for the whole to come to fruition?

I’m interested in the complexity you manage, and the beautiful and satisfying experiences you add to the world.

Come with me

Share your experiences with us?

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