When thinking about an organization, many people think of a hierarchical, “org chart” view—a visual view that is top down or bottom up. Often, that picture of an organization has the leader at the top, with the management layers underneath.
But does this traditional view of an organization tell us anything about the factors driving quality, customer loyalty, employee satisfaction or profitability?
The answer is no, says Kelly Allan, Chairman of the Advisory Board and a Senior Certified Instructor of the W. Edwards Deming Institute®. “This hierarchical view doesn't really tell us how the work gets done. What it tells us is who reports to whom, which just isn’t enough in today's world.”
A systems view, as first described by Dr. W. Edwards Deming, on the other hand, shows a much more robust picture of an organization. A systems view is a picture of an organization that everyone can see, share and understand. The systems view examines the inputs to an organization, the core activities—of what happens with the inputs that come into the system—and the outputs. “That gives us a way that we can all look at the organization, visually, where we see the flow of the various inputs, how they get touched and transformed into outputs,” says Kelly.
“Having a systems view provides a competitive advantage because you can see what's actually going on in the organization as inputs become outputs—and figure out whether what is happening is desirable and repeatable.”
What is a Systems View?
It sounds technical and complex, but a systems view is simply a visual and functional representation of how the work gets done. The view contains three components: inputs, core activities, and outputs. By listing the elements of these three areas you can easily see how work actually gets done, and in some cases, what might be going wrong with the work. “You actually see the barriers to achieving processes that are robust and sustainable. If all you look at are the output numbers, and you don't look at the systemic issues that caused those numbers to be what they are, you will think it is only the people who caused those numbers to be what they are,” explains Kelly.
By not taking a systems-driven approach to improvement, you may find yourself creating tomorrow's problems today. “Without a systems-driven approach you'll be destabilizing the system because it'll be very difficult to repeat what works—such as following an order, transaction, product or service from the beginning to the end. And that’s a key to improvement and success.”
A Systems View Focuses An Organization
A systems view helps provide a constancy of purpose—or aim, and when put into action, it aligns employees and guides their actions. It also influences ongoing decisions and creativity. A misconception is that this kind methodology can add complexity to a business. It’s quite the opposite.
When a business applies a systems view, it focuses efforts and keeps an organization running more smoothly.
“The insights that come from an integrated management approach and improvement tools actually simplify a business. They make it more straightforward and thus more effective and successful,” says Kelly.
Although the “symptoms” may be difficult to see, there are several that suggest a company is not leading with a systems view:
- A business owner who feels he or she is constantly “putting out fires”
- Decision-making solely focused on visible figures
- Costly rework
- A focus on results or outputs only
- Customer complaints
- Emphasis on short-term profits, often with short-term thinking and decision-making
- Employee frustration
See Where Your Teams Can Improve
The two key questions to ask are, “How do you know how you are doing?” and then, “How do we improve that?” The answers are uncovered when you install professional management methods into your business.
And Kelly says businesses that apply a systems view see benefits in the short and long-term. “A systems view helps us see what might be going wrong in our organization or what's not being done properly in the short-term. The processes might be failing us, for example. This approach helps us in the long-term because we can go back and we can look at all of those inputs that affect our system. Some of them are from within our system, and some from outside our system—from the marketplace, for example.”
This knowledge can then inform business strategy because leaders will likely know what is within their control and where the company has influence. Just as important, leaders better know where the company does not have control.
Focusing on the Organization’s Aim
Another part of leading with a systems view is defining what the company’s aim is. “Deming pointed out that a system must have an aim. In other words, if the business is going to be sustainable it needs to have a sustainable aim—an aim that engages people so they are making a difference for the organization. Therefore, the aim has to be more than just making money,” explains Kelly. “The aim has to be something related to making people, the organization, communities and customers, better. It needs to be clear to everyone in the organization and include plans for the future. We have to be improving the conditions of our customers, workers, and communities in which we live.”
Leaders need not know the organization’s aim with great clarity when first implementing a systems view, says Kelly. You can operate your business as you think and reflect on the aim that will support the company mission, engage people and create value.
Southwest Airlines provides an example of the kind of discipline a systems view encourages. Southwest made the decision not to have in-flight food service on its flights. The reason for that decision reflects the aim of the company’s system.
“Part of the Southwest Airlines system’s [aim is to provide] travel that is on-time, affordable and friendly,” says Kelly. “As soon as you start adding complexity with food service, for example, you are going to affect costs and thus affect that aim.” For Southwest, having an aim helps guide decision-making and priority setting. “Everything becomes more straightforward because the system serves that aim—that purpose. “
The aim provides the framework for “how we do things around here” and that is something that employees appreciate and value. “When you combine the systems view/framework with the knowledge of what caused the numbers to be what they are; when you start to look at those processes and subsystems, then things start to improve, employees will stay, and they will give their best efforts,” says Kelly. “And as Deming said: everybody gains.”
Improve Your Leadership Style with a Systems View
Design a systems view of your organization and run your business more smoothly—while empowering your employees in the process. On October 25-27, 2016 Aileron will host The W. Edwards Deming Institute and two Deming experts who will facilitate a two and a half day workshop focusing on leading with a systems view. Don’t miss out on the opportunity for you and your leadership team to begin to create a visible platform to work with and improve upon.
About Kelly Allan
Kelly Allan is Chairman of the Advisory Board and a Senior Certified Instructor for The W. Edwards Deming Institute®. Kelly is founder and Senior Associate of Kelly Allan Associates, Ltd. (KAAL), a company with 24+ Associates that has been in business since 1974. KAAL consults with organizations large and small, from Asea-Brown-Bovari, Eastman Chemical, South Carolina Department of Revenue, Southwest Airlines, Toyota, and White Castle–to Design Group Architects & Planners, Malloy Book Printing, New York Label & Box, and Quantum Services. Kelly writes a blog for Forbes’ on entrepreneurs, and has been published/quoted in The New York Times, The Wall Street Journal, The Financial Times, and in other books and publications.