1.5 - About University

2.1 I NTRODUCTION TO S YSTEMST HINKING FOR L EADERSInspired by Peter Scholtes and Peter Senge.“All the empowered, motivated, teamed-up, self-directed, incentivized, accountable, reengineered,and reinvented people you can muster cannot compensate for a dysfunctional system,”says Peter Scholtes, systems thinking proponent. In this book, we choose more middleground—although systems are extremely important and the most leveraged place to improve,we contend that leaders lead much more than well-oiled systems. In fact, most leaders cannotchange most of the systems in which they lead! No one would propose that his or her organizationis the perfect system, because systems are composed of imperfect people. Then there isthe example of motivated, self-directed, accountable people trying to make the best of a badsystem in the TV series M*A*S*H.This tool will introduce you to the elements of systems thinking and analysis. As leaders,we suggest that you look to systems improvement first; however, we also urge you to find,refine, and use the other tools in this book, as needed.W HAT IS SYSTEMS THINKING?A system is a collection of interrelated and interdependent processes and subsystems which,together, produce a result. Any system, other than perhaps the universe itself, is part of a largersystem. What you consider a system is somewhat arbitrary. For example, the FinancialServices department in an organization could be considered a system, with Budgeting,Reporting, Accounts Receivable, and Accounts Payable as subsystems. Each of these subsystems,Accounts Payable for example, has additional systems within it. It may sound confusing,but where you draw the line determines the system you want to examine. Where you draw theline sets boundaries for the system, and makes it what is called a closed system. In the past,departments acted like closed systems and created what were often called stovepipes or functionalsilos. Departments that acted like closed systems acted as if the organization was set upto do accounting, systems, engineering, and so forth. One characteristic of modern leadershipis the opening up of systems to thoroughly consider how one organizational system—financialservices, for example—fits into the larger system. Wal-Mart, for example, revolutionizedthe retail business by considering its suppliers part of its customer service system.Systems thinking is looking for patterns inside and outside the system, then understandingand optimizing the overall system. Your thinking about a system changes depending onyour purpose for examining it. Separating a subsystem from the larger system (drawing a boxaround it in order to isolate it) is a useful step in getting a manageable picture of the subsystemitself, before removing the box to see where the subsystem fits into the larger picture.Seeing and diagramming a system like your organization is a very creative process. Some conceptualizationsof systems can lead to better results than others.40 SECTION 2 TOOLS FOR BIG-PICTURE THINKING