The Organization as a System
"A system is a whole made up of parts. Each part can affect the way other parts work and the way all parts work together will determine how well the system works. This is a fundamental challenge to traditional management thinking. Traditionally we have learned to manage an organization by managing its separate pieces (sales, marketing, production, logistics, service, etc.). Managing in this way always causes sub-optimization; parts achieve their goals at the expense of the whole. Only changing the system solves the problem." (John Seddon, Vanguard...The Toyota System For Service Organizations)
Systems thinking for service organizations...watch
In essence, the systems perspective emphasizes that everything is connected to everything else and that it's often worthwhile to model businesses and processes in terms of flows and feedback loops. Systems thinking stresses linkages and relationships and flows. It emphasizes that any given employee or unit or activity is part of a larger entity and that ultimately those entities, working together, are justified by the results they produce.
To effectively, nimbly, and proactively adapt to the demands of a rapidly changing environment, all system components – inputs, processes, outputs, and feedback – must be managed.
Organizations are systems
Organizations are processing systems
Organizations are adaptive systems
Organization goals must be aligned with the reality of the organization's super-system
Primary processes must be aligned to meet customer expectations and organizational goals
Support processes must be aligned with primary process goals
Functions, jobs, or roles must be aligned to perform the required tasks of the processes
The human performance system (HPS) components must be aligned – individually, vertically, and horizontally
Management must do the aligning
Processing System Hierarchy
Organizations must be understood and managed (systems thinking) as systems in order to understand why an organization performs as it does, rather than as we intended:
How do the many system conditions interact to create patterns of behavior, of which events are merely instances of those patterns of behavior.
In order to understand events and their underlying patterns of behavior, we need to understand how the patterns of behavior result from system conditions, and this requires systems thinking.
Systems thinking emphasizes the interactions of system conditions to produce organizational behavior, as opposed to analysis, which means breaking things into their constituent parts.
For any improvement intervention to be successful it must take account of inter-dependency; a change to one system condition is bound to be influenced by, or have an influence upon, other system conditions.
The First Law: Every system or process is perfectly designed to achieve exactly the results it gets. So even though we may not like the results, we knowingly or unknowingly designed the system or process to achieve those results.
The Second Law: If you put good people in a bad system or process, the system or process will win every time.
Nine Performance Variables System Model (Rummler-Brache)
Whether an organization is concerned with customer satisfaction, quality, productivity, cycle time or cost, the underlying issue is performance. In order to improve performance, it is necessary to understand the variables that influence performance at the organization, process and individual job/performer levels.
Rummler and Brache, in their book, Improving Performance: How to Manage the White Space on the Organization Chart, introduced a matrix that identifies nine different concerns that anyone trying to change processes in an organization must consider. “The Rummler-Brache methodology has helped everyone involved in business process change to understand the scope of the problem, and it provides the foundation on which all of today’s comprehensive process redesign methodologies are based.” (Business Process Change, Paul Harmon)
All organizations are systems and the Rummler-Brache model describes all of the things that a mature organization must master.
An organization’s strategic and operational effectiveness is the product of three levels of performance – the organizational level, the process level, and the job/performer level. As a result, every improvement effort must be seen through the lens of the three levels.
Three performance needs must be met at each level: goals, design, and management.
Failure to manage the nine performance variables is failure to manage the business holistically.
Cross-functional processes are particularly critical to the customer satisfaction, quality, productivity, cycle time and cost performance of any business.
Managing people should include addressing the needs of all components of the human performance system (performance specifications, task support, consequences, feedback, skills/knowledge, and individual capacity) in which they work.
At each of the three levels, there are tools that can help in documenting, analyzing, and improving performance.
Other Rummler-Brache or Performance Design Lab models:
Superior organizational performance?
It's All About Alignment.®
Of Nine Performance Variables
-Is the strategy/direction articulated and communicated? -Does the strategy make sense, in terms of external threats and opportunities and internal strengths and weaknesses? -Have the required outputs and level of performance been set and communicated? -Are all relevant functions in places? -Is flow of inputs and outputs between functions appropriate? -Does formal organization structure support the strategy and enhance efficiency and effectiveness of the system? -Have appropriate functional goals been set? -Is relevant performance measured? -Are resources appropriately allocated? -Are interfaces between functions aligned and managed?
-Are goals for key processes aligned with customer/organization requirements? -Is it the most effective and efficient process for accomplishing the process goals? -Have appropriate process sub-goals been set? -Is process performance managed? -Are sufficient resources allocated to each process? -Are the interfaces between process steps being managed?
-Are job outputs aligned with process requirements, which are aligned with customer/organization requirements? -Are process requirements reflected in the appropriate jobs? -Are the job steps in a logical sequence? -Have supportive policies and procedures been developed? -Is the job environment ergonomically sound? -Performance Specifications?