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Systems Thinking

Ask some leaders about their organization and they may hand you an organizational chart complete with boxes in neat little columns and rows. While most people know intuitively that such boxes do not conform to workplace reality, few are aware of the degree to which such organizational notions can damage managerial effectiveness. Hierarchies of boxes promote compartmentalized silo thinking and that is the opposite of wholistic systems thinking, which is what what works best for maximizing organizational effectiveness.

The various departments within an organization can and often do become regarded as independent silos; those tall, thin windowless structures used to store grain on a farm. Silos are great structures for storing grain, but the silo architecture makes it very difficult to move grain stored inside one silo into another silo. On a farm, there isn't the need for moving grain from one silo to another. However, inside most companies, there is a pressing need to share information to coordinate between different departments. The 'siloization' of a company's departments is counterproductive, promoting patterns of organizational behavior that retard essential communication and inhibit cooperation. Each department starts working to optimize itself, often at the expense of the organization as a whole. Leaders in such compartmentalized organizations spend much of their time passing information from silo to silo and resolving the conflicts that arise from silo thinking. Too little time gets spent ensuring that all work processes are directed toward making customers happy, and customer satisfaction tends to drop as a result. Workers at all levels are too busy with fights between silo managers and playing games that arise out of poor communication and limited cooperation. In order to reduce communication problems and turf battles and to promote customer satisfaction to its rightful higher priority, it is necessary to move organizations away from compartmentalized silo thinking and towards more wholistic systems thinking.

A system is a whole 'thing' (process, method, entity, machine, etc) that is composed of interdependent parts. The various parts of a system work together to make the system function. A car is an example of a system designed to provide transportation. A car has many parts which, when working well together, enable us to get from point A to point B. While each car part has its own purpose, they are interdependent; no part can provide transportation on its own. You cannot drive the breaks to the airport, for example, and the transmission is useless without the engine. An accelerator pedal is an essential part of a car but it is not very useful unless it feeds fuel to the engine. A car's fuel system is dependent on the accelerator and the accelerator is dependent on the fuel system. This kind of interdependency is a key characteristic of systems.

An understanding of any single part of a system is possible only by understanding its purpose in the context of carrying out the larger function of the entire system. You can study the shape and form of the steering wheel, for instance, but you will not really understand it without knowing that it is the mechanism through which the driver maneuvers the car. The only real way to learn that a steering wheel is the mechanism through which a driver maneuvers a car is to trace the connections between the parts in their fully assembled state. A mechanic might break a car into its parts and lay them on the floor. However, breaking a car down into its parts and looking at them would not help you to learn anything about what a steering wheel does, or for that matter, how any other part worked to provide a system of transportation. You can only understand a system's parts in the context of the entire functioning system.

Closer to home, a football team is also a system composed of interdependent parts. To be an effective a leader, a head coach for a football team must understand the goal, or function, of his system and work with the parts of that system to maximize the ability of the system to meet that goal. In the case of football, the goal is to win games. To win a game, the football team's offensive line must work cooperatively with the quarterback so as to gain yards. While the defensive coach may be concerned about stats for his unit, the best defense is useless unless the offense can move the ball towards the goal. The players and the units must cooperate interdependently in order to win the game.

All companies are systems too. Companies may be divided into departments (marketing, sales, service provision/manufacturing, finance, human resources, etc.) but each department within a company must work together interdependently and transparently with the others in the service of the company meeting its goals. The new leader must look at the organization as a system, understand the importance of interdependencies and ensure that each unit properly contributes to the whole.