The Past Is No Playbook for the Future
Issue 76: Oct 6, 2022
If by chance you have been asleep for the past three decades, you may have missed the success of a systems thinking strategic model. Everyone who understands climate change realizes that we (all of us, sentient and non) live in a closed-loop, interconnected system. That understanding is based on the ability to look at life holistically, connecting the parts to the whole and recognizing that every action causes ripple effects throughout the system. We’ve just seen one possible interconnected outcome of global warming with hurricane Ian slamming into Florida — and there was plenty of warning.
What does this have to do with running and operating an organization? Everything! Our organizational constructs mimic the natural order, and one major misstep throws the system off balance. How do we know? We are finding that organizations when they are in trouble seek to assess their traditional models (governance, board, policies, bylaws, charters, management) to guide them in the development of a new strategy. But evolution of an actionable plan is not possible without understanding how all the parts across the interdependent systems connect. The internal system is important of course but fixing an internal system without an understanding of the external system and how the external system influences some or all an organization’s parts — not the least of which is understanding if the market environment has changed — comes with a cost now and in the future.
We repeat popular sayings from time to time to coach ourselves personally or in context of our professional roles. For example, we have “Three strikes and you’re out; you only get one chance at life so make the most of it; and just do it.” Those sayings may be relevant from time to time for a given situation, or they may be cliches. Sayings are not strategies.
In a dynamically changing marketplace where business models continue to be upended and consumer wants, needs and behaviors continue to change — and even where public discourse remains sharply divided — simple luck or doing something out of context or off step comes with consequences an organization may not be able to recover from.
Take One Step, In Step, at a Time.
When unpacking a problem, it is wise to take logical, sequential steps to reveal how various aspects of the problem are in relationship to one another. Typically, we forge ahead and tackle the problem based on the obvious, which is inevitably a short-term fix. If your organization is perceptually or truly broken, it is assuredly the result of many parts of the system that are broken. Some may be performing well but the desired results are lackluster. Broken parts feed the perception (or reality) of larger breakdowns and the failure to see the overall problem exacerbates the dysfunction. Critical thinking is the tool to identify and assess the real problems; holistic and structured thinking is the key to unlocking the systemic path forward.
To Think Systemically, or Not
A word about systems thinking. If you ask Wiki, “Systems thinking is a way of making sense of the complexity of the world by looking at it in terms of wholes and relationships rather than by splitting it down into its parts. It has been used as a way of exploring and developing effective action in complex contexts.” If you ask Study.com, “Systems thinking is an essential component of the decision-making process within an organization’s management team.” If you ask educator Dr. Marie Morganelli, “Systems thinking is a holistic way to investigate factors and interactions that could contribute to a possible outcome. A mindset more than a prescribed practice, systems thinking provides an understanding of how individuals can work together in different types of teams and through that understanding, create the best possible processes to accomplish just about anything.” And a simpler way to telescope the whole discipline of systems thinking is defining it as a three-dimensional mindset that is needed to think and work in circular systems. Sociologist Leyla Acaroglu adds that systems thinking has a specific vocabulary; words like synthesis, emergence, interconnectedness, and feedback loops are part of the working language.
Bringing it back to the parallel between organizations and the natural world, systems thinking “requires a shift in mindset, away from linear to circular. The fundamental principle of this shift is that everything is interconnected. We talk about interconnectedness not in a spiritual way, but in a biological sciences way. Essentially, everything is reliant upon something else for survival. Humans need food, air, and water to sustain our bodies, and trees need carbon dioxide and sunlight to thrive. Everything needs something else, often a complex array of other things, to survive,” according to Acaroglu.
In terms of organizational dynamics and problem solving, we need to rely on the fact that each interdependent part influences, impacts or even compromises the other parts. Here’s an example: An organization identifies, based on face value and/or assumptions, that marketing must be the cause of failing customer acquisition. The marketing team makes changes independently. But that may not be the answer. In actuality, the organization has failed to see that their offerings aren’t in demand. You can’t solve the problem with better marketing tactics for products or services no one wants. The real problem may be a broken value proposition — a disconnect with market needs or competitors in the marketplace, and therefore offering what customers don’t want. It’s a recipe for disaster.
The Truth about Transformation
Leaders, managers, and employees face an existential challenge when it comes to transforming a business and its model. Resistance to change and not taking risks is the intuitive norm, and therefore increases drag or completely prohibits change. This is a level of resistance that results in roadblocks that even technology cannot overcome. Our organizational playbook, The Truth About Transformation, explores these issues … plus more!