SYSTEMS THEORY

THEORY INPUT

Organizations are made up of seven interdependent and interactive parts. High performance teams understand and balance these parts as needed to produce higher levels of performance. Systems thinking helps us look at how the processes are designed to fit together in order to produce the balance that effective teams need. Building a high performance team requires using systems thinking. Everything is interdependent with external elements in order to grow, profit, and survive.

TASK OBJECTIVE

The primary purpose of this task is to provide an opportunity for you to explore and learn how Socio-Technical theories and models interact to form the basis of High Performance Work Teams.

DESIRED OUTCOMES

•	To reach consensus on the characteristics of High Performance Systems.

•	To gain an understanding of the "Whole Systems" Theory.

•	To understand how key design elements of an organization and its environment interrelate to achieve optimum "FIT."

•	To determine how the various models and theories relate to each other and interact collectively to build a High Performance Work System.

•	To gain an understanding how team systems promote learning initiative and self-regulation in the workplace.

•	To develop a means for helping the other teams benefit from what your team learned from this task.

SUGGESTIONS

Before you begin working on the task, reach agreement as to its objective and the desired outcomes that are expected. Once this is done, utilize your teams producing process for

accomplishing the objective and producing the outcomes desired. The following are suggestions you may wish to consider:

•	Individually read the articles in this section and take note of the key points.

•	Discuss your key points with others in your team and summarize your team's conclusions.

•	Examine the key characteristics of Socio-Technical Systems and reach consensus on their validity and how they differ from traditional closed systems approaches to organizational design.

•	Build a team definition for systems thinking.

•	Determine what relationship, if any, exists between your team and whole systems theory. Summarize your conclusions.

•	Discuss what you have learned from this experience. Summarize what your team learned into your own working theory about whole and open systems.

•	Prepare to share your team's learning so that the other teams can benefit from your experience. (Each team will be allotted up to 10 minutes for this purpose.)

SYSTEMS THINKING

"All organizations are perfectly designed to get the results they get."

—David Hanna

Systems thinking requires us to let go of our current methods of viewing organizations and risk exploring new possibilities.

"An understanding of how systems work has to begin, of course, with an idea of what a system is. A system is a collection of interdependent parts which interact with each other to function as a whole. The cooling system in a car, for example, may consist of a radiator, a fan, a water pump, a thermostat, a cooling jacket, and several hoses and clamps. Together they function to keep the engine from overheating, but separately they are useless. To produce a product or service, all parts must be present and they must be arranged in the proper way." (Introduction to Systems Thinking, Future Systems, Inc.)

Now, our cooling system acting as a single unit can be part of a larger system and can be called a sub-system.

Early organization theory focused on pieces and not interrelated parts. Most organizations today still function as independent or closed systems, not understanding the interdependency with a large number of other systems.

Organization systems thinking recognizes and responds to the need for an appropriate relationship between the system as a whole and the larger social, economic, and other outside systems in which it operates as a living co-producing part. All systems exist as a series of agreed-on methods for doing work in the organization. These integrated agreements or sub-systems, regulate all aspects of organization life. For success, it is vital that the systemic aspects of the organization be in agreement with the broader shared cultural and environmental demands.

Within organizational systems thinking, we are primarily concerned with the following three sub- systems:

•	Social System - The defined ways that people interact to communicate, solve problems, adjust, decide, etc.;

•	Technical System - The method for getting the core work (product/service) accomplished to include arrangements of equipment, material, work flow processes;

•	Control System - The standards, rules, and guidelines that direct the other sub-systems. This could include compensation, supervision, justice system, benefits, budgets, etc.;

These three interdependent sub-systems need to be designed to meet the demands of the larger system in which the organization must exist.

Systems Thinking helps us design organizations that meet customer needs, business needs, and people needs. By recognizing the interdependency of the organization's sub-systems and its dependency on the larger system it supports, a flexible self-sustaining system can be created.

PARADIGMS AND SYSTEMS THINKING

"The world of the 90's and beyond will not belong to 'managers' or those who make the numbers dance, as we used to say, or those who are conversant with all the businesses and jargon we use to sound smart. The world will belong to passionate, driven leaders...People who not only have an enormous amount of energy, but who can energize those whom they lead."

—Jack Welch, GE

Just recognizing we can and should use system thinking will not solve our pressing issues. We must apply these ideas in new ways by shifting our models, beliefs, and methods of designing organizations. Creation of high performance work systems requires a paradigm shift in the way we look at structuring, developing, and managing organizations for growth, profit, and survival. In essence, several "shifts" need to occur to create high performance through systems thinking. These "shifts" are detailed on the next page.

THE "SHIFTS"

OLD PARADIGM

Maximum task breakdown; simple, narrow skills

External controls (supervisors, specialists, staffs, procedures)

Tall organizational chart, autocratic style

The technology imperative

People as an extension of the Machine

People as an expendable spare part

Competition

Gamesmanship

Organization's Purpose Only

Alienation

Low risk-taking

NEW PARADIGM

Optimum tasks grouping; multiple skills; breadth & depth of skills

Internal controls (self- regulating, integrating sub- systems)

Flat organizational chart, participative style

Joint optimization

People as complimentary to the Machine

People as a resource to be developed

Collaboration

Collegiality

Member's and Society's Purpose Also

Commitment

Innovation

WHERE IT IMPACTS IN THE ORGANIZATION

Structure:

•	Division of labor

•	Responsibilities

•	Authority

Work Design

•	Philosophy

•	Information

•	Knowledge

•	Rewards

•	Selection/

Retention

Systems thinking guides us to view organizations from broader perspectives than before. In systems terms, our approach:

IS NOT	IS

• Problem driven	• Purpose/product driven

• Canned or recipe solutions	• Collaborative centered

• An overlay/add on	• Whole system design

• Business as usual	• New way of doing business

Through this approach, organizations are created and designed to produce optimization of its sub- systems with the larger environment.

Systems thinking is a process that allows management to look at choices around the design variable to increase optimization of the parts and produce better outputs. The ideal is to create a balance between the environment, technical, and social systems.

OPEN SYSTEM ANALYSIS

Organizations, like other systems, are dependent on the external environment to grow, profit, and survive. Successful organizations have learned to look at their environment and adapt to meet ever changing needs. We want to know who's out there, and what their requirements are, and finally, how well are we meeting their requirements. All organizations' needs are drawn from the environment; and all its products or services returned to the environment.

Organizations exist with the support and consent of the larger environment. The organization's central purpose (mission) and the way it pursues (producing process) that purpose must be wanted and supported by that environment. In the pursuit of its purpose, the organization then establishes objectives to meet its internal and external demands. For success, these objectives must be defined, integrated and acted upon in ways that are both internally congruent and externally compatible with the environment's own demands and needs.

In short, the organization that lives in harmony with its environment will grow, profit, and survive; the organization unresponsive to its environment will wither and die.

GLOSSARY

Systems Terminology and Definition

Boundary - An imaginary region or line that separates a system and its component parts from its environment.

Control processes - Activities that regulate, integrate, and coordinate the various internal parts of elements within a system, and between the system and its environment.

Core process - That conversion process that is central to the accomplishment of the primary task of the system.

Environment - Everything outside the system's boundaries. A system's environment is that portion of its environment with which it must interact to accomplish its purpose.

Equifinality - All living systems have the ability to reach the same end points through a variety of paths. There is not necessarily any one best way to accomplish a given purpose, objective, or task, although some ways are better than others.

Feedback - Information that lets a system and its members know whether or not it is pursuing the right goals or is on track toward meeting its goals.

Inputs (intakes, imports) - Whatever enters the system from its environment—materials, information, energy, etc.

Living systems - These are systems which have the capacity to regulate their own activities in the pursuit of purposes and goals.

Open systems - These are systems whose survival depends upon regular interchange and interdependence with its environments.

Outcomes, outputs - The results of the activities of a system; everything that is exported from a system into its environment to fulfill a need.

Permeability - The degree of openness of a system's boundary to inputs from its environment.

Primary task - That task which is central to the accomplishment of the primary purpose of the system.

Producing Systems - Systems that are directly involved in converting or transforming into outputs.

Purpose - A systems reason for existence.

Renewal - The activities required to maintain a good fit between the elements of a system, or between the system and its external environment.

Social process - The interactions and relationships between the members of a social system.

Social system - The relationships between a set of persons who are interdependent with respect to some common output or outcome.

Socio-technical system - Any system whose purpose must be achieved through the joint optimization of both a social and a technical system.

Steady (stable) state - The tendency of all living systems to maintain an orderly balance among their component variables, as well as with their task environments.

Stress, strain, and threat - External demands constitute stresses on a system, which in turn cause strains within a system. Threats are anticipated stresses.

Structure - The arrangement of the sub-systems and components within a system at a given moment in time.

Support systems - An individual or group whose primary purposes are to support the producing (operating) sub-systems.

System - A collection or set of interdependent elements which interact with each other to achieve a purpose.

Task system - The human activities and physical resources required to convert a system's inputs into its outputs.

Technical system - Transformation or conversion of inputs into outputs.

Technology - Procedures, machines, methods, knowledge, and techniques for accomplishing outputs.

Transformation - An alteration or change in the state of the throughput of the system, or of the system itself.

—Adapted From Herb Stokes