For Every Action, There Is A Reaction: People, Process, Policy…
Sir Isaac Newton, my fellow alumni at University of Cambridge (admittedly, a few years ahead of me!)…
If only he knew the extent of application to his theories – business operations in this instance. More about Newton’s Third Law shortly…
As we look forward, it is helpful to also look back and gain perspective. Today’s business operations are even more complex than two years ago… yet they are typically more aligned and proactive than they were five years ago. We are making progress, but there are still critical challenges to address. Organizations are still not working at maximum capacity… experience tells me we can do better.
Typically, even though organizations may be consolidating for cost management and scalability purposes, the walls of the individual functions, channels and regions have become even thicker. As a direct result, it is harder for you, as a leader, to build end-to-end value chain functionality in ever-changing, complex organizations. It has become increasingly difficult to gain consensus and approval – both on specific, focused initiatives, as well as broader organizational change.
This is not a technology, process or policy problem – it is a people problem:
People make purchasing decisions…
People change processes…
People establish policies…
People change procedures…
People make budget decisions…
People decide to build and maintain organizational silos…
Although we tend to observe and react to events (or the fires they cause), it is critically important to really look at and assess the root cause of your problems. Go ahead, rip that band-aid off and look at what is really causing the infection –
Your “Core System” May Be Flawed
Recently I was speaking with a client in the SCM space. He was trying to understand why he could not consistently get the business results he was looking for and wanted to discuss how he could drive change to achieve his objectives. What did we find upon examination?
Just as Newton predicted (yeah, that guy again) – For Every Action There Is A Reaction.
Organizations are designed as “systems” – a set of interrelated and interdependent elements and subsystems to form a cohesive whole. Bottom line: Many organizations are not designed for effective interaction and optimization – the “System” is often broken. Units within the system are not designed to function as single systems unto themselves. Organizations are made up of many moving parts. If one part of the system is altered in any way, chances are it will affect other aspects of the business. It is critical to organizational success that each business partner across the organization recognizes and optimizes as a part of the bigger whole. Instead of deploying processes, policies and technologies to leverage various forms of improvement across the wider organization, business units often do not consider the “ripple effect” that will occur when independent changes are made.
In addition, frequently there is a tendency to attempt to lay new tools and technologies on top of old policies and procedures that worked for a specific business purpose in the past – without the support of the people and other units that are affected. The reality is that time and effort must be invested to understand why old practices are failing, how any changes will impact the existing business and who it will affect outside of the immediate environment of the implementation.
Making the poor assumption that a new process or technology will fix the problem instead of understanding that no policy, process or technology change can be successful without recognizing the people component… and the system as a whole, is fruitless. As a result, my client was not realizing the potential value of interconnected organizational change. Ultimately, we partnered to create a plan around “systems thinking” that incorporated not just his division, but the organization as a whole. He was able to leverage his new knowledge of “the system” to work across functions, channels and regions to get the very best from the system as a whole. As a result, he is now seeing strong, consistent results on a global basis… and the business is growing quarter on quarter.
Interacting With The System As A Whole Provides A Distinct Advantage.
My client is not unique in his challenge – the lack of a systems approach is pervasive in most organizations – just as sub-optimal business results are. Many leaders implement policies, procedures or technologies without ever looking at them in terms of the effects on the “system” and its people… and then wonder why they have not gotten the results they anticipated. Millions of dollars are wasted each year on failed projects for this very reason.
The reality is that today the average company has variant policies, procedures and technologies across the different functions and channels that preclude them from realizing exceptional results. Leaders typically focus only on their area of responsibility. Critically important, to be sure. However, the challenge in this approach is that your organization may have channels or functions that operate well in and of themselves, but they don’t integrate well together. Consequently, the organization suffers as a whole.
Progressive Leaders Are Recognizing How Important Aligning The Various Parts Of The Organization, And The Interrelations Of Those Parts, Is To Their Success.
As one of those leaders, you need to ensure your focus is on matters of ongoing organization and feedback. You need to diagnose problems, not by examining just your piece of the organization, but by recognizing the larger patterns of interactions between the parts of the integrated whole:
- Focus on the outcomes you want from the organization in terms of the customer and your overall business results
- Work backwards from your ultimate goal to determine what you need from the system to succeed
- Understand that you are not an island and in order to be successful, you need to consider and integrate all the moving parts
While most of us like to consider our business as unique and different, the reality is that the more congruency you build into your organizational systems, the more you increase efficiency, visibility, innovation and knowledge management… and the more potential you have to maximize your business results. Think SLA’s, MOU’s, Partnerships – and systems.
Understand, at the end of the day, every action you take creates a reaction somewhere else in the system – people, process and policy. The bottom line of systems thinking is leverage – seeing where actions and changes can lead to significant, meaningful improvements – BUT understand those same actions and changes will have impacts on other structures and people throughout the system. Your overall success depends on the quality and quantity of the interactions within the system’s components.
While there may be functional or cultural differences across the spectrum, the more you can partner to translate and align, the more likely you are to succeed on a grand scale. Work hard to understand your counterparts and build consistent policies, procedures and technologies together. Each and every disparate instance adds to the challenge of building effective solutions that support holistic planning and deployment.
What do you have to gain in addition to the obvious? How about:
- An Innovation Incubator
- Connectivity That Breeds Efficiency
- Cross-functional/Vertical Leverage
- Improved Business Results Across The Board
- Competitive Advantage Fueled By Solving Customer Issues Efficiently & Effectively
How Can You Contribute To Creating An Effective “System”?
Please engage the discussion and let us know how systems thinking can help you to exceed your potential. Need A Trusted Advisor to help you become the very best leader you can be while maximizing your organizational results? Contact me at SheriLMackey@gmail.com.