A LIFETIME OF SYSTEMS THINKING

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Most Important Ideas
Improving the performance of the parts of a system taken separately will not necessarily improve the performance of the whole.  Installing a Rolls Royce engine in a Hyundai can make it inoperable. 
Problems are transdisciplinary in nature Systems thinking is holistic; it attempts to derive understanding of parts from the behavior and properties of wholes, rather than derive the behavior and properties of wholes from those of their parts.
The best thing that can be done to a problem is to dissolve it, to redesign the entity that has it or its environment so as to eliminate the problem.
Interactive Management requires planning backward from where he wants to be ideally, right now, not forward to where he wants to be in the future.
The interactive manager plans backward, because it reduces the number of alternative paths he must consider, and his destination is where he would like to be now. If he did not know this, how could he possibly know where he will want to be at some other time?

Denying the Obvious
I have very much enjoyed denying the obvious and exploring the consequences of doing so. In most cases, I have found the obvious to be wrong. The obvious, I discovered, is not what needs no proof, but what people do not want to prove. I have been greatly influenced by [satirist] Ambrose Bierce’s definition of self-evident: “Evident to one’s self and to nobody else.”
Here is a very small sample of the obvious things I have found to be wrong:
Improving the performance of the parts of a system taken separately will necessarily improve the performance of the whole. False. In fact, it can destroy an organization, as is apparent in an example I have used ad nauseum: Installing a Rolls Royce engine in a Hyundai can make it inoperable. This explains why benchmarking has almost always failed. Denial of this principle of performance improvement led me to a series of organizational designs intended to facilitate the management of interactions: the circular organization, the internal market economy, and the multidimensional organization.
Problems are disciplinary in nature. Effective research is not disciplinary, interdisciplinary, or multidisciplinary; it is transdisciplinary. Systems thinking is holistic; it attempts to derive understanding of parts from the behavior and properties of wholes, rather than derive the behavior and properties of wholes from those of their parts. Disciplines are taken by science to represent different parts of the reality we experience. In effect, science assumes that reality is structured and organized in the same way universities are.
This is a double error. First, disciplines do not constitute different parts of reality; they are different aspects of reality, different points of view. Any part of reality can be viewed from any of these aspects. The whole can be understood only by viewing it from all the perspectives simultaneously.
Second, the separation of our different points of view encourages looking for solutions to problems with the same point of view from which the problem was formulated. Quoting Einstein: “Without changing our pattern of thought, we will not be able to solve the problems we created with our current patterns of thought.” When we know how a system works, how its parts are connected, and how the parts interact to produce the behavior and properties of the whole, we can almost always find one or more points of view that lead to better solutions than those we would have arrived at from the point of view from which the problem was formulated. For example, we do not try to cure a headache by brain surgery, but by putting a pill in the stomach. We do this because we understand how the body, a biological system, works. When science divides reality up into disciplinary parts and deals with them separately, it reveals a lack of understanding of reality as a whole, as a system.
Systems thinking not only erases the boundaries between the points of view that define the sciences and professions, it also erases the boundary between science and the humanities. Science, I believe, consists of the search for similarities among things that are apparently different; the humanities consist of the search for differences among things that are apparently similar. Science and the humanities are the head and tail of reality—viewable separately, but not separable. It is for this reason that I have come to refer to the study of systems as part of the “scianities.”
The best thing that can be done to a problem is to solve it. False. The best thing that can be done to a problem is to dissolve it, to redesign the entity that has it or its environment so as to eliminate the problem. Such a design incorporates common sense and research, and increases our learning more than trial-and-error or scientific research alone can.

Catching Social Systems Red-Handed
Here’s a second revelation that I’ve really enjoyed exploring: Most large social systems are pursuing objectives other than the ones they proclaim, and the ones they pursue are wrong. They try to do the wrong thing righter, and this makes what they do wronger. It is much better to do the right thing wrong than the wrong thing right, because when errors are corrected, it makes doing the wrong thing wronger but the right thing righter. A few examples:
The healthcare system of the United States is not a healthcare system; it is a sicknessand disability-care system. These are not two aspects of the same thing, but two different things. Since the revenue generated by the current system derives from care of the sick and disabled, the worst thing that can happen to it would be universal health coverage. Conversion of the current system to a healthcare system would require a fundamental redesign.
The educational system is not dedicated to produce learning by students, but teaching by teachers—and teaching is a major obstruction to learning. Witness the difference between the ease with which we learned our first language without having it taught to us, and the difficulty with which we tried to learn a second language in school. Most of what we use as adults we learned once we got out of school, not while we were in it, and what we learned in school we forgot rapidly—fortunately. Most of it is either wrong or obsolete within a short time. Although we learn little of use by having it taught to us, we can learn a great deal by teaching others. It is always the teacher who learns most in a classroom. Schools are upside down. Students should be teaching, and teachers at all levels should learn no matter how much they resist doing so.
A student once asked me in what year I had last taught a class on a subject that existed when I was a student.
A great question. After some thought, I told him 1951. “Boy,” he said, “you must be a good learner. What a pity you can’t teach as well as you can learn.” He had it right.
The principal function of most corporations is not to maximize shareholder value, but to maximize the standard of living and quality of work life of those who manage the corporation. Providing the shareholders with a return on their investments is a requirement, not an objective. As Peter Drucker observed, profit is to a corporation as oxygen is to a human being: necessary for existence, not the reason for it. A corporation that fails to provide an adequate return for their investment to its employees and customers is just as likely to fail as one that does not reward its shareholders adequately.
The most valuable and least replaceable resource is time. Without the time of employees, money can produce nothing. Employees have a much larger investment in most corporations than their shareholders. Corporations should be maximizing stakeholder, not shareholder, value to employees, customers, and shareholders.
Replacing Confusion with Conceptual Order
I’ve also enjoyed producing conceptual order where ambiguity and confusion prevail. Some examples:
Identifying and defining the hierarchy of mental content, which, in order of increasing value, are: data, information, knowledge, understanding, and wisdom. However, the educational system and most managers allocate time to the acquisition of these things that is inversely proportional to their importance. Few individuals, and fewer organizations, know how to facilitate and accelerate learning—the acquisition of knowledge—let alone understanding and wisdom. It takes a support system to do so.
All learning ultimately derives from mistakes. When we do something right, we already know how to do it; the most we get out of it is confirmation of our rightness. Mistakes are of two types: commission (doing what should not have been done) and omission (not doing what should have been done). Errors of omission are generally much more serious than errors of commission, but errors of commission are the only ones picked up by most accounting systems. Since mistakes are a no-no in most corporations, and the only mistakes identified and measured are ones involving doing something that should not have been done, the best strategy for managers is to do as little as possible. No wonder managerial paralysis prevails in American organizations.
Identifying and defining the three basic types of traditional management: the reactive or reactionary, the inactive or conservative, and the proactive or liberal. I’ve also shown that a fourth type, the interactive or radical, denies two assumptions common to the three traditional types. These assumptions are (1) that the future can be forecast accurately enough to be used effectively in planning, and (2) that we should plan the way to get from where we are to where we want to be. The interactive type constitutes a radical transformation of the concept of management. The interactive manager plans backward from where he wants to be ideally, right now, not forward to where he wants to be in the future.
The interactive manager plans backward, because it reduces the number of alternative paths he must consider, and his destination is where he would like to be now. If he did not know this, how could he possibly know where he will want to be at some other time?
Identifying and defining the ways we can control the future: vertical integration, horizontal integration, cooperation, incentives, and responsiveness. These are seldom used well. Corporations tend to collect activities that they do not have the competence or even the inclination to run well. They also tend more to adversarial relationships with employees, and to encourage competition between parts of the corporation and conflict with competitors. As Peter Drucker pointed out, there is more competition within corporations than between them, and the internal kind tends to be less ethical.
SIX REVELATIONS
Improving the performance of the parts of a system taken separately will not necessarily improve the performance of the whole; in fact, it may harm the whole.
Problems are not disciplinary in nature but are holistic.
The best thing that can be done to a problem is not to solve it but to dissolve it.
The healthcare system of the United States is not a healthcare system; it is a sickness and disability-care system.
The educational system is not dedicated to produce learning by students, but teaching by teachers—and teaching is a major obstruction to learning.
The principal function of most corporations is not to maximize shareholder value, but to maximize the standard of living and quality of work life of those who manage the corporation.
In many cases, managers unintentionally create incentives that result in activities diametrically opposed to their best interests—for example, rewarding themselves for short-term performance, and ignoring the longterm or paying commission based on the amount of a sale rather than its profitability. This encourages the sale of underpriced, hence usually unprofitable, items.

Few organizations are ready, willing, and able to change in response to unanticipated internal or external changes. They lack the responsiveness of a good driver of an automobile who gets where he wants to go without forecasts of what he will encounter but with the ability to cope with whatever occurs.
Exposing Intellectual Con Men
My fourth source of fun has been the disclosure of intellectual con men—for example, propagators of TQM, benchmarking, downsizing, process reengineering, and scenario planning. Managers are incurably susceptible to panacea peddlers. They are rooted in the belief that there are simple, if not simple-minded, solutions to even the most complex of problems. And they do not learn from bad experiences. Managers fail to diagnose the failures of the fads they adopt; they do not understand them. Most panaceas fail because they are applied antisystemically. They need not be, but to do otherwise requires an understanding of systems and the ability to think systemically. The perceived need to learn something new is inversely proportional to the rank of a manager. Those at the top feel obliged to pretend to omniscience, and therefore refuse to learn anything new even if the cost of doing so is success.
Designing Organizations
Finally, my fifth source of satisfaction has derived from designing organizations that can avoid the kinds of traps I have described here; for example, the designs of a democratic hierarchy, an internal market economy, a multidimensional organizational structure; and learning and adaptation support systems. But I have derived the most fun working with others on the design of INTERACT (see author’s biography for more information), the Social Systems Sciences Graduate Program at The Wharton School, and the Operations Research Graduate Programs at Case University and the University of Pennsylvania.

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A LIFETIME OF SYSTEMS THINKING

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