When things get complicated in organizations, we can be tempted to “break them up” to try and simplify. Divide and conquer. That just makes matters worse. Why? Because organizations are in fact whole systems. Everything inside is interconnected and interdependent, so when we try and manage them any differently we inevitably underperform.
By not seeing our organizations as systems we run into a constellation of problems. Some of the most obvious are:
- poor communication among managers and staff
- lack of shared understanding of goals
- poor planning
- lack of clear and authentic overall strategy
- lack of focus on a leverage point of the system (constraint)
- lack of clear ability to understand current reality – not able to join the dots
- lack of clarity on the outcome that decisions will have
- lack of clarity on true potential for growth
- underperformance through lack of ability to deliver projects on time and within budget
The knowledge gap for managers
Understanding organizations as systems is not a matter of faith, it’s a matter of science. This is what we now know thanks to the advances in our understanding of nature and networks. The problem is that many managers lag behind in their knowledge of what management needs to be today. They still manage organizations divided up into traditional functions and departments. This worked well a century ago but in today’s complex and interdependent world it is no way to improve performance. Indeed, it leads to consistent underperformance.
Systems based management for a better future
We believe that a systemic approach to management builds robust and resilient organizations through 3 major strands:
1. building interdependent processes managed through the control of variation
2. subordinating these interdependencies to a strategically chosen element of the system called constraint
3. designing the organization as a network of interdependent projects with a goal
This focus moves organizations beyond their current fragmentation and silos and towards a way of thinking and behaving that benefits not only themselves but their supply chain and community. It is a win-win practice for management and it build a better and more sustainable future for everyone involved, internally and externally.
The managers and leaders we need today
We need managers today that think systemically and understand how to improve continuously the entire system that they govern. This does not have to be an innate talent. People can learn to develop systemic understanding through the right methods and tools. We need to quit learning things that are no longer relevant and have the courage to embrace appropriate models and methods. It’s a transition, and it begins with recognizing the problem.
See also Ten Transformation Steps for the Decalogue approach based on the systemic management philosophy of W. Edwards Deming and The Theory of Constraints.
About the Author
Angela Montgomery Ph.D. is Partner and Co-founder of Intelligent Management, founded by Dr. Domenico Lepore. Dr. Montgomery’s new business novel+ website The Human Constraint looks at how Deming and the Theory of Constraints can create the organization of the future, based on collaboration, network and social innovation.
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