Russ Ackoff, one of the most important #SystemsThinkers in the history of the discipline, issued this warning more than three decades ago. On the whole, #directors and #managers ignored the warning. Today most still have a massive “Systems Thinking Capabilities Gap.” It leaves them and their organisations dangerously exposed.
In this video he speaks only of management, but what he has to say applies equally to directors.
Given the #SystemsThinkingCapabilitiesGap is a very common problem, his warning is
as relevant today as it was then.
In this article I will include many video clips, so the story is told by Ackoff with additional comments from me.
The second clip provides the evidence in support of his statement. Keep in mind that this also applies to failings of #StrategicManagement, #RiskManagement, and #ProjectManagement.
Before proceeding, choose a system, such as health, to keep in mind as you consider the insights offered. I will use the #HealthSystem to illustrate some of my remarks.
In this third clip he explains what he believes to be the reason for the failures – most programmes have not been embedded into #SystemsThinking.
He then defines what a system is. The key point he makes is that a system is more than the sum of the behaviour of the parts. It is the product of their interactions, and all the parts are interdependent and interconnected.
Pause for a few minutes and reflect on what the implications are for the system you have in mind, or in relation to the health system.
As one example, we all know departmental and hierarchical #OrganisationalStructures create #siloes that impede the way the parts of the system interact. Gillian Tett called this The Silo Effect in her book with that title.
Hospitals feature a wide range of siloes that struggle to interact efficiently or effectively. They are not well embedded in a functional system. And in many ways they, and the thinking that goes on in them, are what Ackoff calls “anti-systemic,” I would argue.
In the next clip Ackoff explains the implications of this when we come to try to fix any problems in any system.
Pause again, to consider this last insight in relation to the system you had in mind, or in relation to the health system. How many efforts to improve that system are efforts to improve parts of it, with little consideration of the system as a whole?
In relation to health, a very large and complex system, almost all improvement efforts focus on improving parts of the system, not the system as a whole. As a result, in the UK we have hospital beds blocked because of a lack of home care provision for people to be discharged into. This is one obvious example.
Within health the examples run into their thousands. Failure to tackle the the causes and effects of diabetes holistically, by all the agencies involved in the systems, from prevention through to treatment and recovery where that is possible, is another example.
In this clip, he emphasises the key point.
He goes on to explain why our usual approach to improving a system is ineffective.
Ackoff then explains a basic principle behind the right approach to programme improvement, a principle that is usually ignored.
Please pause again. Ask yourself, how much time gets spent on trying to eliminate defects in the system you are considering, rather than considering the reinvention of the system?
One of Ackoff's big ideas is the notion of "Idealised Design," a term that speaks for itself. Thinking what an #IdealisedDesign of the system would look like, and what would need to be true to realise it, helps in the development of a #change strategy.
In the language of strategists, a "#GapAnalysis," between the ideal system and the current system can be used to identify what needs to change. A change plan can then be developed.
A #ThreeHorizonsModel can be useful in the process if identifying the short, medium and long-term changes.
Too often directors and executives spend much of their time 'putting out fires' when problems flare up, or focus too much on short-term performance. I would be surprised if this is not true of the system you have been considering. It is certainly true in the health system and we see the evidence of it daily.
Next, Ackoff explains that our emphasis is usually on continuous rather than discontinuous improvement. In more recent times Harvard Professor #ClaytonChristensen made a similar observation, expressed as the focus on #SustainingInnovation rather than #Disruptiveinnovation.
Does continuous incremental improvement stand any chance of solving the systemic problems that exist in the system you have been considering, or is radical innovation needed to achieve a discontinuous improvement? How would the system benefit from developing an idealised design?
Ackoff then quotes the management guru #PeterDrucker to make a related point about the danger of focusing on doing the wrong thing well.
In the next clip he points out that doing the right thing is dependent on focusing on the right definition of #quality, which must be based on the notion of #value. This distinguishes #efficiency from #effectiveness and the focus should be on the latter, he argues. He also argues that the difference between efficiency and effectiveness is the difference between #knowledge and #wisdom.
In the system you have been considering, are directors and executives focused on quality? Are they using the right definition of quality? What definition of "value" is their notion of quality based on?
These questions relate to what I regard as the three core strategic questions that all directors and executives ought to know the answers to, but rarely do: "what value do we create, who for, and how?"
In truth, most directors and executives never really consider the term "value" beyond the default "value for money" approach. That is problematic since value comes in so many other forms that are more important than monetary value. In fact money is just a very poor proxy for real value.
Ackoff's conclusion was what I chose to start this article with, but it is worth repeating.
In conclusion, I hope others will not be needing to repeat Ackoff's warning thirty years from now. He was right to say that "until managers take into account the systemic nature of their organisations, most of their efforts to improve their performance are doomed to failure." And today this view is even more true.
If the truth he spoke is not recognised and acted upon the institutions we depend on will not be capable of rising to the challenges society needs them to help address. Nor will they be able to realise their own potential.
More importantly, the average lifespan of an organisation, which has been shrinking for decades, will continue to shorten. The systems thinking capabilities gap does not only lead to underperformance, it also greatly exposes organisations to unnecessarily high levels of risk, and the real risk of total failure.
It is for these reasons the Enlightened Enterprise Academy has worked with one of the world's most recognised experts in systems thinking to create the "Critical Systems Thinking and the Management of Complexity" programme for Directors and Executives.
OVERCOME YOUR SYSTEMS THINKING CAPABILITIES GAP
