The Most Powerful Leadership Tool: Systems Thinking

• August 9, 2018

Leadership is challenging because it’s paradoxical. We want control, but we don’t want micro-management.  We want freedom to act, but we don’t want chaos.  What is the best way of thinking about the world (about people and problems) that will enable us to manage the variation in trust and deal with the complexity and this paradox?  The answer is ‘systems thinking.’

Leaders who want to bring out the genius of every employee and who want to optimize results (especially through customer experience and employee engagement) must be skilled systems thinkers.[1]

The Journal of the American Medical Association estimates 27% of all adults over 40 are taking statins.  I am one.  Statins have shown to be very effective in reducing cholesterol and thereby reducing the risk of heart attack and stroke.

After taking statins for about 6 months both my knees began to ache.  After a month of suffering, one morning I awoke and could barely walk.  I couldn’t understand how this could happen.  I had not injured my knees. I never had pain like this before.  I did a bit of online research and found a few comments and one research paper explaining that statins can cause knee and joint pain.

I notified my Doctor that I was stopping my medication. I explained how I was nearly immobilized because of the pain.  There was no relief especially at night. I was losing sleep, I had to stop exercising, and I could not play golf (a beloved hobby). My Doctor concurred and asked me to continue without the statins for a few more days.  The pain started to subside. I could now walk almost normally. Each day I am getting better.

With all good intentions and knowledge my Doctor prescribed a statin that caused a severe impact on the quality of my life.  The statins helped avoid serious heart issues, but they cause severe side effects.  One part of my physical system was helped while another was severely impacted.  Even my wife was impacted because I could not do certain household tasks because of the pain. I also had to sleep on my back to avoid discomfort.  This caused me to snore more loudly and frequently. My wife lost sleep because of the prescription. My wife is part of my system too.

Leaders must appreciate systems. A system is a series of interdependent elements which cooperate and communicate to achieve a specific purpose.  My physical system could no longer function because an attempt to help one part of my system (my heart) created an unintended consequence for other interdependent parts of my physical system.

We can see other examples in the news.  Wells Fargo was fined millions for issuing fake credit card accounts and overcharging customers to lock them into new deals. (Prentice, 2016)  They not only provided monetary incentives for the employees to “sell” these deals, they also threatened employees with loss of employment if they failed to meet the goals.  This is an example of the standard form of control techniques.  Employees had to behave in a certain way. Customers were manipulated.  Wells Fargo management had good intentions.  They wanted to increase sales and its customer base.  They adopted an incentive program that caused unintended negative consequences for employees and customers.

The Obama administration increased its Corporate Average Fuel Economy (CAFE) standard to 54.5 miles per gallon (mpg) by 2025.  They had good intentions.  They wanted to improve U.S. energy security, reduce carbon emissions and save consumers money at the pump.  The unintended negative consequences were for costs of new vehicles to increase significantly thereby causing consumers to hold onto their older vehicles longer.  The older vehicles have worse fuel efficiency.  The new vehicles were costlier but less safe because they were lighter materials. (The Unintended Consequences of Ambicious Fuel-conomy Standards, 2015)

Ecologists in California argue that the 30 million dead trees are natural assets that provide habitats needed by wildlife.  Firefighters view them as safety hazards that can crash down on roads, power lines, and homes, and that could potentially make the fires bigger and more dangerous.  The good intentions of the ecologists impacted the severity of the wild fires this year. (Upton, 2016)

When there is a problem to be solved, a leader must avoid jumping to conclusions and quick fixes.  The good intentions of fixing problems quickly can create unintended and unexpected negative consequences making things much worse.  Leaders must appreciate systems, use data and a predictable problem-solving method that encourages experimentation.  Optimization means doing the very best with the resources available.  In each of these examples, the system was not optimized.  Leadership failed to appreciate systems thinking.

Sources:

Prentice, R. (2016, September 19). Wells Fargo Goes Far to Cheat Customers, and It Was Predictable. Retrieved from utexas.edu: https://news.utexas.edu/2016/09/19/it-was-predictable-that-wells-fargo-cheated-customers

The Unintended Consequences of Ambicious Fuel-conomy Standards. (2015, February 3). Knowledge@Wharton.

Upton, J. (2016, June 23). 30 Million dead trees could make California wildfires even worse. Grist.

Wally Hauck, PhD has a cure for the “deadly disease” known as the typical performance appraisal.  Wally holds a doctorate in organizational leadership from Warren National University, a Master of Business Administration in finance from Iona College, and a bachelor’s degree in philosophy from the University of Pennsylvania.   Wally is a Certified Speaking Professional or CSP.  Wally has a passion for helping leaders let go of the old and embrace new thinking to improve leadership skills, employee engagement, and performance.

[1] Systems Thinking: Is a discipline of using data to identify patterns, processes, and structures that cause events. It’s a way of thinking and acting to obtain knowledge to make changes in process and structure to improve the interactions between the parts of a system and instead of making improvements to the parts of the system.  Excerpts taken from The Art of Leading: 3 Principles for Predictable Performance Improvement by Wally Hauck, PhD, CSP.

For more, read on: https://csuiteold.c-suitenetwork.com/advisors/advisor/wally-hauck/