Organization as a System systems are created by elements and different types of feedback organization is a social system two models of social system management Description of system and its behavior: 1. based on details 2. based on dynamics

Examples Social programme – USA (dynamics of urban systems) - improving the depressed nature of cities - construction of low cost housing - to attract people to individual parts of towns -What happened? JFK

System Thinking Traditional ThinkingSystems Thinking The connection between problems and their causes is obvious and easy to trace. The relationship between problems and their causes is indirect and not obvious. Others (either within or outside our organisation) are to blame for our problems, and must be the ones to change. We unwittingly create our own problems and have significant control or influence in solving them by changing our behaviour. A policy designed to achieve short-term success will also assure long-term success. Most quick fixes either make no long-term difference or actually make matters worse in the long run. In order to optimise the whole, we must optimise the parts. Focus on policies that optimise the whole rather than each of the parts. Aggressively tackle many independent initiatives simultaneously. Target and orchestrate a few key changes over time.

System Thinking Never use system thinking or system dynamics to Impress people or win an argument Validate prior views Hide uncertainties Blame individuals Manipulate others Make other people feel guilty, etc.

Prisoners of the System, or Prisoners of our Own Thinking structure influences our behaviour structure of human systems is subtle Learn to understand the structure of the system redefine your scope of influence, define, who is in your chain your influence is always bigger than you think if you want to succeed, others have to succeed to wait for the system to respond - take two aspirins and wait do not panic Complication: ethics

1.Today’s problems come from yesterday’s solutions. 2. The harder you push, the harder the system pushes back 3. Behaviour grows better before it grows worse 4. The easy way out usually leads back in. 5. The cure can be worse than the disease. The Laws of System Thinking

6. Faster is slower. 7. Cause and effect are not closely related in time and space. 8. Small changes can produce big results - but the areas of highest leverage are often the least obvious. 9. You can have your cake and eat it too but not at once. 10. Dividing an elephant in half does not produce two small elephants. 11. There is no blame

System Feedback Less visible than elements any intervention to the system - initiates it’s responce, different feedback 1. reinforcing feedback (positive feedback) 2. balancing feedback (negative feedback)

Reinforcing Feedback - responsible for growth and decline of systems - explains why small impulse can cause big response Mistake Punishment Lower self-confidence R ‘Pygmalion effect’ Pygmalion effect

Satisfied Customer Interest in product grows Sales Customer speaks highly about product Satisfied customer R ‘Satisfied customer’

Balancing Feedback Helps the system to gain the balance after intervention - resistance is nearly always symptom of balancing feedback Conflict with traditional thinking Resistance New method of work B ‘New metod of work’ + + -

Balancing Feedback Mistake - aggressive intervention - find out why the system resists - so called limiting factor and remove it - systems respond slowly and it seems that they do not respond at all - typical example of balancing feedback is limit to growth

Limits to Growth Growing action Limiting condition Condition Slowing action We usually respond to decline of growth by increasing the pressure on what the growth cause (bigger pressure on people, working to late hours). Limiting factors can be different - little fault in product design, old technology, staff lacking necessary skills, …

Limits to Growth Conflict with traditional thinking Resistance New method of work B ‘New metod of work’ Lack of motivation Lack of knowledge Fear

Archetypes structure of a system determines the behaviour of its parts learning to see the structures - freeing ourselves from unseen forces - possibility to work with them certain patterns reoccur repeatedly archetypes simple sentences that help to change our perception to see structures

Archetype Shifting the Burden Description: A short-term solution is used to correct the problem. It is successful, and more similar short- term solutions are used. Fundamental long-term solutions are used less and less. The capability for a fundamental solution gets worse.

Archetype Shifting the Burden Warning symptoms: ‘Look here; this solution has worked so far. It will work in the future as well.’ Management principle: Focus on the fundamental solution. Use the symptomatic solution to gain time while working on the fundamental solution.

Archetype Shifting the Burden Examples: Managers do not know how to address the problem and they hire consultants. Consultants prove to be very capable and are given more and more work. Managers slowly loose the ability to solve problems themselves. Paying bills by borrowing, using alcohol to relieve stress.

Archetype Escalation Description: Two people or organisations each see their welfare as depending on a relative advantage over the other. Whenever one side gets ahead, the other is more threatened and tries to re-establish its advantage and this circle leads to aggressiveness on both sides, each side is acting ‘in defence’.

Archetype Escalation Warning symptoms: ‘If our opponent would only slow down, we would stop fighting this battle and do something more valuable.’ Management principle: Look for a way for both sides to ‘win’, or to achieve their objectives. It is possible to interrupt this circle by ‘peaceful’ action or question - the other side will feel less threatened and will also respond more peacefully.

Archetype Escalation Examples: Price wars. Advertising wars. Gang warfare. Break-up of a marriage. Battle for the ‘ear’ of the top manager. Cold war.