Systems thinking at management level

At first I thought it was voodoo. The team I had worked in had become different, somehow better. The loose, uncouth bunch had become a team. Today, 20 years later and a few years richer in experience, I know that it wasn't voodoo. It was a manager who was familiar with systems thinking and the systems theory foundations of our communication and acted accordingly.

Admittedly, writing about leadership and systems thinking in a systems engineering blog seems a little unusual. Especially since I am referring here to the theory of social systems. But it can be useful to focus on this special form of systems thinking. By understanding organizations in this new way, it becomes easier to bring good products to complex markets. With a solid theoretical background, changes in organizations are no longer magical voodoo - but comprehensible and manageable.

In this guest article, I would like to show you how I myself use insights from systems thinking to help shape organizations.

Markets, products and organizations

Before we turn to the social systems themselves, I would like to show you the connection between markets, products and organizations. We know from Conway's Law that products can only contain patterns that have already been established in the producing organization. And I think the same applies to products and markets: products can be successful if they reflect the patterns of the market. The product itself, the market and the organization all have their own specific degree of complexity and are ideally aligned with each other.

Now, since IOT and AI products are becoming increasingly complex. They therefore fit in with our globalized markets of the 21st century. And we know Ashby's Law: To control a system (the market), you need a controlling system (product) that has a higher variance than the system to be controlled (the market). This is how the new product achieves real innovation on the market. The two systems fit together. However, this is often not the case for our organizations.

Templates are not enough

Most of the social systems in which we work today are based on concepts that matured during industrialization - at a time when products were still allowed to be complicated.

In order to be successful despite this, most organizations fall back on templates such as design thinking. But the use of these templates fails due to the organization's strategies to limit its own complexity: silo thinking, formal hierarchies and the well-known local optimization of individual career paths. Only by creating an increased internal variance in the social system can the organization use these templates for itself again. Good products are not created by miracle or chance, but by good, sufficiently complex organizations.

This is where the task of managers comes into play: do they work on of the organization, they can ensure sufficient complexity. But what does this mean in practice? Here is an example that shows how systems thinking can help a manager to make the right decisions:

Systems thinking in practice

A manager from a large corporation approached me a few years ago. Her task was to develop an integrated system in the area of IOT. The various sub-products needed to work together seamlessly. The product also had to be able to take cultural differences between individual countries into account. The team behind the product consisted of experts in their field. Here we see three sources of complexity: the product itself, the market and the organization.

The large corporation with its rules, guidelines and culture was not designed to build up enough internal complexity to tackle product development effectively. The project was in danger of failing before it had even started. We sat down to talk and an initial strategy was developed. Instead of waiting several months for added value, we reduced the timeframe to a few weeks. In order to achieve this, the technical experts had to exchange information more regularly and more intensively. The manager changed the boundary conditions and the communication structures began to change. The internal variance of the social system increased. However, it was not foreseeable that this solution would work for this team.

Social systems

"[...] People cannot communicate, not even their brains can communicate, not even consciousness can communicate. Only communication can communicate."

Niklas Luhmann

One of the strongest mindfucks and also one of the most important assumptions in social systems theory is the realization that the human being is the system environment of the social system. The social system itself consists of communication. The easiest way to observe this is when patterns in the communication behavior of a group remain the same, even if the people in this group change. But how is change supposed to come into the social system if people supposedly play no role? We have seen one possible way in the example just mentioned: By changing the framework conditions. Another way would be to change communication patterns through self-management, evolutionary sense and holism, as described by Frederic Laloux. There are many more - but they are not beyond the scope of this article.

The way in which a social system reacts to changes in its environment is subject to the internal logic of the system. Unfavorable developments can be countered through careful observation, experimentation and reflection. This is where experiential knowledge in combination with a theoretical foundation is extremely helpful, and support can be useful.

Change needs a leadership mandate

Anyone who has worked in a large organization knows that changes in an organization's communication patterns are difficult, if not impossible. It takes leadership to shape these changes and, ideally, the organizational power to take responsibility for them. But through a better understanding of the internal structures and interrelationships of an organization, every person who is linked to a social system can become this leader. This article could only give you a small insight, but I hope I have inspired you to look further into the topic.

We do not have to eliminate our weaknesses. We need to create a (social) system in which weaknesses are not relevant and strengths can be lived.

loosely based on Fredmund Malik

If you have any questions or topics you would like me to write about, please get in touch. I hope to write more in time about the simplicity and beauty that applying this theory brings to my day-to-day work and the day-to-day work of the people I work with. For those of you who can't wait that long, here is my article on good Teamwork. I would be delighted if you would comment or join me on LinkedIn networked, so that we can go on the journey to better organizations and better products together.

Image source: Jacek Dylag on Unsplash