Systems Thinking

Systems Thinking: A Definition

 

Deming and Ackoff’s systems ideas enable us to manage what we cannot control. Organizations today are increasingly complex; they are beyond powers of traditional hierarchical management.  Learning to manage for improvement of the system has become urgent in all fields.  It pays great benefits.

 

Systems thinking enables continual improvement, something that old-style management cannot attain. It improves businesses, hospitals, schools, nations, families–even ourselves–in this rapidly changing, increasingly complex and dangerous world.

 

Amazingly, systems thinking helps us manage complexity and at the same time improve the quality of life for everyone involved.

 

A System

Deming’s definition of a system is “two or more parts that work together to accomplish a shared aim.” The key idea is “working together” or interacting.  An organization viewed as a system is not the sum of its departments but the product of interactions among all its elements, including those internal as well as customers and suppliers.

 

We live in and are surrounded by systems every day. That the Deming philosophy solves so many urgent problems is the first obstacle to accepting and learning systems thinking. It is difficult to believe that there could be one answer for so many apparently different problems.  But the fact is that there are systems solutions for all kinds of enterprises: dangerous hospitals, inadequate schools, manufacturing safer cars, unhappy families, incompetent government agencies and international commissions.

 

Social Systems Thinking

Some systems are mechanical, like cars, computers, garage doors, appliances, and toys. Other systems are biological, like plants, trees, birds, fish, animals and human bodies. Still other systems are mental and theoretical, like mathematics, physics, music theory and philosophy.

The most complex systems are social, such as families, sports teams, organizations and nations. Social systems are the most complex because they usually contain and must integrate many mechanical, biological and mental subsystems. Furthermore, managers have to engage members who have their own personal goals as well as the organizational vision.  Personal and organizational goals have to be reconciled.

 

Complicated vs. Complex

An interesting approach to understanding systems is to consider the difference between complicated and complex.  An automobile is an example of a complicated system; it has many parts and interactions not readily understood except by an engineer or expert mechanic.  However intricate, a complicated device is ultimately understandable—and predictable.  Complexity enters when a human being becomes part of a system, because the behavior of human beings is unpredictable.  The output of a complex system consisting of an automobile and its driver is never entirely predictable.

 

The Social System

Dr. Deming focused on complex social systems—that is, those with humans. He taught us to look at a social system as a whole:

See a system is an interdependent, long-term whole with a life of its own;

Become aware of a system’s hidden connections and interactions;

Understand the complex and often delayed interactions that may go on between cause and effect;

See a system in its wider social environment (including customers, suppliers, competitors, government regulators and technological constraints);

Focus not on solving the problems of individual people or parts but understanding their interactions;

Establish a cooperative environment in which people are rewarded for pursuing continual improvement of processes, the larger system, and themselves--and never punished for mistakes in the course of attempts to improve processes;

Use data to understand system performance in place of opinions and custom.

A Fundamental Change: Transformation

Dr. Deming’s approach is fundamentally different from traditional management, which served so well in the past.  It is an original and unique theory for managing a complex social system in a rapidly changing world.  His approach requires that we learn to see the world, organizations, our families and even ourselves—all social systems—with new eyes.  This new kind of seeing looks for hidden connections and interactions, and anticipates distances in time and space between cause and effect.  To see differently calls for, not new management tools, but a transformation in thinking.

 

Cultivation of new eyes to see larger systems and the global environment is more important than ever in our increasingly complex and dangerous world, as evidenced by the continuing global economic crisis, the difficulties of achieving an affordable and safe healthcare system, the intricacies of protection from terrorist attacks while cultivating trust with Muslim nations, and understanding the limits of technologies such as deepwater oil drilling. 

 

Deming’s systems theory demands great emotional and mental changes in seeing the world as a system made up of other systems and everyone as part of multiple systems.

 

The change from traditional management to systems thinking has been compared to Copernicus’ declaration that the earth was not the center of the universe, but a planet orbiting the sun in an incredibly larger universe. That new worldview took centuries for people to absorb.  Like the systems view, other discoveries have challenged conventional wisdom, e.g., Darwin’s theory that humans evolved from other animals and Freud’s proposition that we do not know much of what or why we think and feel and act. All have required decades, even centuries for debate and understanding.

 

 

An American Idea

 

Dr. Deming began to develop his management ideas as a boy on the Wyoming frontier in the early 1900s. There he observed the benefits of continual improvement of farming practices taught to his neighbors by the U.S. Department of Agriculture's extension service. This government-sponsored education in best farming practices allowed America to become the world's leading producer of food and fiber and was the basis of our successful economy. Deming would later remind audiences that the West was settled by cooperating townspeople at barn-raisings and quilting bees, not by loner cowboys shooting each other and Indians, as Hollywood movies would have it.

 

Deming liked to tell how the Great Western Sugar Co. would take newspaper ads to advise the farmers when to plant, thin and harvest their sugar beets so they would get the best crop. This led him to advise Toyota to work with their suppliers and customers rather than go for the lowest price or highest profit.

 

Deming’s principles are the foundation of the success of world-renowned organizations such as Toyota*, Proctor & Gamble, Harley-Davidson, Hillerich & Bradsby, Ritz Carlton, and other leading corporations. Deming’s 14 Points, his System of Profound Knowledge, and practice of continual improvement comprise a revolutionary management philosophy, which is essential in the 21st century. Without knowledge of this philosophy and theory, no organization (or system) will compete successfully over the long term—regardless of its investment in Six Sigma, Lean Manufacturing or other quality improvement tools.

 

* We believe the Toyota debacle of 2010 happened because management stopped practicing the principles of the Toyota (and Deming) Way in favor of short-term profits and rapid gains in market share.  There are similarities to the failings of the financial services industry and the sacrifice of the news media to size of market and the bottom line.

 

The Deming Library and Ackoff on Systems

 

ManagementWisdom.com offers the 32-volume Deming Library, in DVD format with comprehensive teaching guides. Dr. Deming said, “The Deming Library is the best representation of my thoughts.”  Allen Mulally, CEO of the re-stored Ford Motor Company has affirmed his high regard for the Deming DVDs and the return to practices that Deming and Ford CEO Donald Petersen instituted in the 1980s.

 

Peabody Award-winning producer Clare Crawford-Mason, NBC News writer/narrator Lloyd Dobyns, and Dr. Deming collaborated to create the Library. It distills Dr. Deming’s teaching into easy-to-understand principles and practices for success in your organization. They brought Dr. Deming to world attention with the 1980 NBC White Paper, If Japan Can…Why Can’t We?

 

Dr. Deming and Dr. Russell Ackoff (represented here in the Better Management for a Changing World series of conversations about systems and Volume 21 of The Deming Library) led the development of the practice of systems management. It is not an easy change. Dr. Deming often reminded people “No one has to change. Survival is optional.”