People struggle to understand big systems, such as nations and alliances. It’s just too big and complicated (what better proof than U.K. citizens voting to leave the European Union.) So they try to break things down into simpler pieces, build walls and set up barriers (silos, fiefdoms, departments).
Unfortunately, that just doesn’t work. Why? The short answer is complexity. Today’s complex reality is dominated by interdependencies and network dynamics. Businesses can do a lot better. They can lead the way, in fact, much more than mediocre politics, in demonstrating how certain systemic principles can serve the common good.
New business models for the common good
Today we are witnessing new business models, such as the B Corporation, where businesses show how they can be profitable AND serve the stakeholders at large (entire supply chains and entire communities). But let’s not be naive. It’s not enough to make statements about caring for the community or the environment. Big corporations can do that while they continue to do harm. In order to change the world for the better, businesses need to engage in whole system transformation. They need to design every aspect of their workflow to sustain constructive interdependencies to allow faster results, continuous improvement, feedback and continuous innovation, providing increasingly valid solutions for the entire supply chain, internal and external. (See ‘Transforming the Organization Into a Whole System‘).
The opportunity of digitization for whole system transformation
Digitization is offering us the unique opportunity to break down unnecessary barriers of time and space with undoubted advantages. When companies embark on digitization, it quickly becomes apparent that they need to work on their processes. Technology is seen by many as a way of increasing efficiencies and cutting costs. This is an impoverished view. Instead, digitization is an opportunity to completely re-examine the way an organization is structured to achieve its goal.
When organizations come to understand the limiting effect of artificial barriers in their structure they can open up to creating more effective workflow supported by technology. Digitization can be a way to create more effective processes, but more than that, it can be a way to actually grow sales, engage customers better and create new solutions. Companies can learn to embrace a new organizational model built on processes, effective interdependencies and projects. In other words, a systemic organization that enables Quality, Involvement and Flow.
The problem is the speed at which it is happening. Unless we equip ourselves with the right kind of cognitive support we will tend to react by trying to hang on to, or go back to, what is “familiar”. The Thinking Processes from the Theory of Constraints offer a structured way to challenge current thinking and innovate, plan, act and continuously improve systemically.
Time will tell how separation plays out for the UK and Europe, but in the meantime, systemic thinking is a skill that we can and must learn to catch up with the times and continuously evolve for the good of all.
Intelligent Management, founded by Dr. Domenico Lepore, specializes in Whole System Transformation, based on the systemic management principles of W. Edwards Deming and the Theory of Constraints. We are trusted advisors to leaders of organizations through our unique, whole system Network of Projects organization design. Sign up to our blog here. Intelligent Management provides education and training internationally on systemic management using the Decalogue methodology .
See our new books The Human Constraint – a business novel that has sold in 28 countries so far and ‘Quality, Involvement, Flow: The Systemic Organization’ from CRC Press, New York, by Dr. Domenico Lepore, Dr. .Angela Montgomery and Dr. Giovanni Siepe.