Systems Thinking and Change Management

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RESPONSE:

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1. Need detailed information on the following:

a. Evaluate systems thinking and the application of systems logic as essential considerations in managerial decision-making. Explain how systems thinking can be incorporated into a project.

One of the major breakthroughs in understanding the complex world of systems is systems theory. The application of this theory is called systems analysis. One of the tools of systems analysis is systems thinking. Very basically, systems' thinking is a way of helping a person to view the world, including its organizations, from a broad perspective that includes structures, patterns and events, rather than just the events themselves http://www.thinking.net/Systems_Thinking/st_innovation_990401.pdf.

We have witnessed in the last 20 years is a series of program of change failing to achieve their intended outcomes - Customer Care, ISO 9000, TQM, ABC, BPR. In fact, recent research and experience show that the latest panacea does no better than its predecessors. Over and over again commonly known but illusive forces (systems thinking addresses) thwart improvement program. Vanguard argues, for example, that the problem labelled as 'organisation culture', which typically leads to rationalizations like 'change takes time', or 'each program is an element in the total change program, which demands systems logic to deal with effectively. Rationalizations prevent learning, so systems logic is an essential consideration in managerial decision-making to answer questions, such as, why does behaviour not change as was intended? How much time should change take and how do we know? How should each element of a change program impact performance and why? If we don't ask and answer these questions we are unlikely to learn. If we do not learn we are more likely to continue to waste resources on ineffective programs of change. The cost of failure goes far beyond the price tag of the program. Demoralization of staff is a frequent and costly consequence of failure. And, in order to understand change in organizations, we must understand what influences people's behaviour within an organisation and how it does so. Behaviour is conditioned by the information people have, their knowledge of what it is they are to do and the means provided to them to do it. It is also conditioned by the prevailing norms - people know what is expected of them, what is acceptable and what is not acceptable. Experience shows that there is a myriad of influences on people's behaviour, but it also shows that some factors have far more influence than others. Thus, system's thinking allows for an analysis of the entire system to effectively deal with an array of problems (Vanguard, n.d.)

Vanguard (n.d.) also argues that to improve our methods of change, we need to understand more about what actually governs people's behaviour through the application of systems thinking and logic. When no change occurs, it is the pattern of behaviour that remains unchanged. Deming and Juran demonstrated that people's behaviour is governed by the system they work in. It was a finding, which went against the accepted wisdom of their time and remains outside prevailing management thinking. Yet this is the single, common cause of the failure of programmes of change. When programmes fail it is generally because the attempt was non-systemic. Change in performance requires a change to the system. The failure of many programmes of change is masked by the plausible aspiration to 'do things right'. For example, the focus of registration to ISO 9000 is often 'what do we need to do to achieve registration?' regardless of whether these are the 'right things' to do. Training everybody in customer care assumes that if people do 'as they should' with customers, customer service would improve. In practice, their behaviour in front of the customer is governed by their system of thinking and logic. So many programs of change, even when we give them the right labels ('co-operation', 'teamwork') fall far short of success because they don't change the system. There is a critical difference between doing things right and doing the right thing. Much of the effort in programs of change is given to doing things right: there is not much questioning whether these are the right things to do.
Perhaps the labels are the first line of defense against such programs being questioned (Vanguard, n.d.).

The organization as a system is an interesting concept. For example, Vanguard points out that doing the right thing means we have to learn how to view an organization as a system and understand the implications of that view for what it means to manage. It is what Deming taught the Japanese in 1950. A system is a whole made up of parts. Each part can affect the way other parts work and the way all parts work together will determine how well the system works. This is a fundamental challenge to traditional management thinking. Traditionally we have learned to manage an organisation by managing its separate pieces (sales, marketing, production, logistics, service etc.). Managing in this way always causes sub-optimization, parts achieve their goals at the expense of the whole. The 'compartmentalization' logic of traditional thinking is not limited to the design of organisation structures. A systems view of organizations shows the fallacy of conceptualizing performance problems as people problems ('if only they would do it'). They should not be considered separately from other 'task' features. Failures in co-operation, poor morale and conflicts in our organizations are symptoms; their causes lie in the system. Training in teamwork or co-operation will only treat the symptoms. The causes usually remain. Managers have been encouraged to think of the 'human' (or 'soft') issues as distinct from hard or 'task' issues when they might be better understood if they were seen as interdependent. (1)

According to Vanguard and many others, for example, managers of 'traditional systems' impose conditions that limit, constrain or in other ways control people's behaviour in ways which result in sub-optimization. Being prevented from doing their work as they could, people become demoralized. Managers then treat people as though they are the problem. Lack of empowerment, for example, is a pre-occupation of 'traditional' management. Unwittingly, they have created systems which dis-empower people. Sending people on empowerment training does not solve the problem. It frequently produces greater cynicism. Only changing the system solves the problem. A systems view of organizations leads to a different collection of problems to address. Traditionally, managers manage with output or financial data. Their view of the organisation is thus conditioned by the data they use. Problems are thought of as variations from budget and such variations attract management attention. While such a view will show up problems of cost, the causes of costs is a different question and can only be addressed from a different perspective. Only a systems view will illuminate the opportunities and scope for improvement.

For example, a tele-marketing team was measured on number of calls, contacts, and 'sends' (a sale subject to trial). Daily and weekly targets were set. Making target resulted in a bonus. The people were demoralized. They had to experience going home having failed to meet their target. They knew in their hearts they had done their best but their performance had been governed by their system. Success depended on the quality of the lists. Lists had duplications; unused parts were batched and stored for re-use. As all lists came from the same source this resulted in much wasted time and customers being re-called frequently (and not being happy). Product knowledge varied between operators, the time taken to process orders depended on other departments and the type of product; there were frequent 'fire-fighting' interruptions to the working day. (Vanguard, n.d)

According to Vanguard (n.d), people learned to do whatever they had to do to make their target. They hid good quality lists, falsified activity records, 'bounced' incoming customer calls to others so as not to get tied up with a customer problem and so on. Not because they were bad people; they were working in a bad system. Having to behave this way causes further demoralization. The performance of this system didn't depend on how the parts act independently (getting lists made 'on time' and meeting activity targets for calls), it depended on how the parts interacted. It is management's role to manage the interactions (or process), not the activity. Attention to the system would improve performance. Improving the quality of lists, product knowledge of operators and removing the causes of customer problem calls would improve the performance of the system. It is not unusual to find such 'traditionally managed' tele-marketing systems under performing by half. Management of the tele-marketing team was focused on activity, not purpose. The measures they used encouraged them to explain differences in performance as people differences and the management job was thought of as 'motivating' people. Yet they had designed a system, which robbed people of pride, the most important source of motivation. The managers assumed targets and bonuses would motivate people. People will do, in these ...