Leadership and Systems Thinking

Two commonly confused concepts in our lexicon are management and leadership. We use the terms “manager” and “leader” interchangeably. I am our company’s Professional Services Team Leader, but much of what I do is best described as management. Common usage aside, what does it mean to “lead” as opposed to “manage”?

Referring to Peter Drucker and Warren Bennis, Stephen Covey summarized the distinction between management and leadership as, “Management is doing things right; leadership is doing the right things.” 7 Habits of Highly Effective People, Covey (1989). The immediate impression from this distillation of the difference is the similarity of the management/leadership difference to that between efficiency and effectiveness. Bennis applied the distinction directly to management/leadership. “Managers do things right. Leaders do the right things.” On the other hand, Drucker focused his language on the efficiency/effectiveness distinction. “Efficiency is concerned with doing things right. Effectiveness is doing the right things.”

The problem

How does this lack of clarity become a problem? That is exactly the problem addressed by Drucker in an article for the Harvard Business Review.

“What is the major problem? It is fundamentally the confusion between effectiveness and efficiency that stands between doing the right things and doing things right. There is surely nothing quite so useless as doing with great efficiency what should not be done at all. Yet our tools—especially our accounting concepts and data—all focus on efficiency. What we need is (1) a way to identify the areas of effectiveness (of possible significant results), and (2) a method for concentrating on them.”  Peter Drucker “Managing for Business Effectiveness” (1963)

With his characteristic directness and humor, Russell Ackoff addressed this problem, “The more efficient you are at doing the wrong thing, the wronger you become. It is much better to do the right thing wronger than the wrong thing righter. If you do the right thing wrong and correct it, you get better.” Russell Ackoff

But how do you know what is the right thing to do? The starting point for those involved in the creation, design, leadership, and improvement of systems must be systems thinking. “That’s obvious,” you may be thinking. But, based on what goes on in the realm of systems engineering and organizational leadership, it’s not so obvious that it doesn’t bear discussing.

Systems thinking is a discipline for seeing wholes. It is a framework for seeing interrelationships rather than things and patterns of change rather than static snapshots.” Peter Senge, The Fifth Discipline (2010)

What clouds our vision?

How is it that, despite our obvious commission as systems thinkers, we still fall into the trap of managing when we should be leading, valuing efficiency over effectiveness?

To begin with, we don’t have a wide adoption of a systems mindset. We lack a commitment to our systems thinking rhetoric. This is particularly true when we face complexity. Despite the inherent complexity of human organizations, we cling to the Enlightenment ideas of determinism and linear causation. Many engineers maintain that complexity is a complicated system we don’t understand well enough to trace the linearity easily. We are attracted to the idea that everything can be quantified and predicted. As Richard Feynman put it, “Physicists like to think that all you have to do is say, these are the conditions, now what happens next?”

This denies the reality of complexity and the need for systems thinking. Suppose we can class everything as deterministic and linear. In that case, we can take the easier path of reductionist thinking rather than tackle the systems view and its requirement for holistic and synthetic approaches.

We train systems engineers to manage – not to lead. Much of what is taught in courses on leadership focuses on improving the efficiency of the leader and their organization. Many of the skills overlap with those offered in project management courses. Missing are discussions of finding the “right things” and strategically crafting paths to their realization.

We have an epidemic of solving the wrong problem. Russell Ackoff said, “Successful problem solving requires finding the right solution to the right problem. We fail more often because we solve the wrong problem than because we get the wrong solution to the right problem.” Often the failure lies in neglecting to address the problem at the systemic level. In just one example of such a failure, Eastman Kodak lost its advantageous position in the photography market by choosing to work on optimizing its photographic films rather than recognizing the future of digital photography in that market.

With a failure to adopt a systems mindset accompanied by leaders operating as managers trained to focus on efficiency, we efficiently go about solving the wrong problems. We lead our organizations into the world of complex problems and solutions with our focus set at the reductionist tactical level without a strategic vision. We risk managing them into the right answers to the wrong questions.

Complexity – the big challenge

In our common parlance, we tend to blur the terms “complex” and “complicated” as if they share the same meaning. Sometimes the complicated and the complex are divided based on the size of the system in question. Some authors see complex systems as larger than complicated, and others as the reverse. But the number of nodes and relationships in a system does not separate the complex from the complicated. As we understand more about the structure and behavior of systems, it is increasingly apparent that a more disciplined distinction needs to be made between the two.

While a precise definition for complexity is not yet a settled matter even within the discipline of complexity theory, Melanie Mitchell, in her book, Complexity: A Guided Tour, offers a solid definition that touches on concepts of complexity that are shared across the discipline. She writes, “complex system: a system that exhibits nontrivial emergent and self-organizing behaviors.” The two elements she highlights, emergent behaviors and self-organization, separate the complex from the merely complicated.

These two characteristics produce the principal challenge facing leaders attempting to lead, design, or influence complex systems. That challenge results from the lack or difficulty of predicting what the future state(s) or behavior(s) of the complex system will look like. Predicting becomes exponentially more difficult without the complicated system’s linearity of causation and deterministic results.

It does not, however, take many observations of human organizations to see the emergent behavior and lack of predictability that characterize complex systems. Almost every leader has experienced situations in which an organizational intervention produced unpredicted organizational behaviors. Often this is due to human agents who, when faced with such an intervention, develop “workaround” tactics to mitigate or eliminate the intended effect(s). These actions cause the system to adapt to the altered conditions, thereby thwarting the desired system change.

The answer

The key to understanding systems, particularly complex systems, is systems thinking. This means we must learn to take the system’s point of view and think systemically. Peter Senge points out the criticality of systems thinking in the face of the complexity challenge.

Today, systems thinking is needed more than ever because we are becoming overwhelmed by complexity. Perhaps for the first time in history, humankind has the capacity to create far more information than anyone can absorb, to foster far greater interdependency than anyone can manage, and to accelerate change far faster than anyone’s ability to keep pace. Senge, The Fifth Discipline

So, when we operate in the role of leaders in our organizations, we must recognize that we are dealing with complex adaptive systems often operating at the “edge of chaos.” (The liminal space between order and chaos – the place of “maximum complexity.”) Human organizations, from geopolitical networks to business and social organizations, manifest the emergent behaviors and unpredictability that characterize complexity as complex adaptive systems. Dealing with that complexity requires real leadership, and real leadership requires a system focus – systems thinking – the sine qua non of any leader worthy of the name.

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