As we think of an organisation, we tend to look at its structure as a wiring diagram that depicts departments and functions in the form of a hierarchical bureaucracy that is well defined.
Most public service institutions, in particular, have a long history of such structure and processes. Experts captured this perception of an organisation as a “machine metaphor”.
The organisation is viewed as a closed system with inputs, internal processes, and outcomes.
Each part of the organisation fits together by design, so the smoother and more standardised the operation, the more efficient its production.
An excellent pictorial description is the car manufacturing assembly line where people and equipment operate in a prescribed and routinised process to provide consistent quality for mass production.
Hence the view of organisations as closed systems was supported by the scientific management concepts of Frederick Taylor.
He sought to reduce all production into component processes, define critical activities, minimise variations, and manage performance with precision.
This scientific approach saw direct cause-and-effect relationships in what happened on factory floors.
The role of leaders in general, and strategic leaders in particular, was to remove any fluctuation in the external environment to predict both inputs and outputs.
As such, strategic leaders designed internal systems that demanded the most excellent efficiencies from workers, acquired resources for production, and either captured or developed demand for the products in the population.
In other words, strategic leaders were the only thinkers in the organisation, while most other direct-level roles in such a system were intended only to be doers.
As one would expect, while potentially effective in a stable, predictable environment, this machine metaphor has some drawbacks.
The emergence of larger and more complex organisations led to systems analysis and the rise of Operations Research and Systems Analysis (ORSA). The ORSA-types sought to identify all critical parameters of (closed) production systems by observation, measurement, and analysis.
Analysts then developed mathematical models and simulations to determine optimal design methods and processes.
The methodology for systems analysis was to observe potentially critical events, collect data to reveal trends, establish causal relationships, and then seek to design systems with control mechanisms to attain optimal performance.
Organisation theorist and systems thinking pioneer Russell Ackoff presented another perspective of organisations as human enterprises with people as integral components and organisations as open systems.
His system thinking approach challenged the scientific method by examining organisations’ social, cultural, and psychological aspects. Here the managers’ focus on the scientific reductionism of processes resulted in them doing things right within well-defined structures.
Ackoff suggested that leaders required systems thinking to determine the right things for organisations. The holistic view of organisations coincided with the acceptance that an organisation was more than the sum of its parts.
As part of an open system, organisational interactions with the external environment beyond management and internal feedback mechanisms indirectly influence operations in unforeseen ways.
As we discuss systems thinking, the terms dynamic, non-linear, second and third-order effects, and unintended consequences describe actions within organisations.
The desire to have a well-oiled machine with accurate precision does not mirror the reality of organisations.
At the same time, other intangibles defy quantification, e.g., motivation, cohesion, organisational climate and culture, and leadership which either support or detracts from organisational performance.
Experts recommended two other metaphors of organisations, like an organism or a brain, to denote a system that interacts with its environment and adapts and learns.
The treatment of an organisation as an entity that learns was introduced by Peter Senge and captured in his book, The Fifth Discipline.
He noted that something was missing in our understanding of organisations as systems when:
a. Metrics result in more reports and administrative burdens but shed little light on the levers that can be pulled to meet targets.
b. Most restructuring efforts fail to achieve intended synergies and generate unintended consequences.
c. Many initiatives to reduce cost in one part of a system result in increased prices elsewhere.
d. Large-scale projects tend to overrun schedule, budget, or both.
e. Great than 75% of re-engineering efforts fail to achieve targeted improvements in performance.
It was proposed that organisations should be viewed as social activities that perform best when all members achieve their goals.
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While some have called this empowerment, systems thinking is the critical competency within an organisation that develops the synergy of the other four disciplines.
Systems thinking provides a framework for understanding and explaining organisational processes and performing them over time.
The use of system thinking models helps organisational members understand complex problems by developing shared team understanding while suggesting ways to leverage complex issues and identify and test solutions.
Senge’s 11 Laws may seem trite but ring true as we examine our experiences in organisations.
The first law, “today’s problems come from yesterday’s solution”, illustrates not only the need to see the bigger picture over time but also helps us realise that our attempts to solve one problem may have unintended consequences that lead to future challenges.
The eighth law, “small changes can produce big results-but the areas of highest leverage are often the least obvious”, highlights the uncertainty in establishing causality and predicting the magnitude of change within a system.
This should cause us to look for solutions in unexpected places.
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