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Systems Thinking: Helping Your People "Get" Your Organization’s Strategy

05/11/2013


I was recently in a well-known coffee shop. It was late in the day, and I was the only person in the shop. The young woman behind the counter asked very politely what I would like, and I ordered a latte. She then proceeded to ask, "Can I have your name for the cup?" I hesitated, but gave her my name and she dutifully wrote it on the cup. She prepared my drink, took it to the end of the counter, lifted it to eye level and, in a slightly elevated tone, read my name off the cup. I looked around and, not seeing anyone else, responded, "That's me."

When strategy gets lost in process

It's my understanding that this practice of writing a customer’s name on a cup and reading it out when their beverage is ready is part of this chain's strategy to make the customer experience more personal, and it probably helps sort out which drink is whose when it’s busy. But I don't think that this particular barista really "gets" the strategy behind this process, as evidenced by her execution of it that day and how I felt as a result of her actions.

Systems thinking can trace a path between an individual’s role and the organization’s strategy

It's one thing for organizations to develop a strategy, but articulating that strategy to employees in such a way that the key concepts are not lost in translation is often a challenge, especially in large multi-layered entities. It is critical that an employee can see a clear path between his or her role and the success of the organization — and therefore how they contribute to the execution of the strategy.

Systems thinking is a highly effective method for graphically revealing that path. Systems thinking views an organization as an entire system made up of people, processes and structures and seeks to understand how the components of the system are intricately related and how they influence each other in desirable or undesirable ways.

By visually showing how an individual's performance in a specific role is ultimately tied to the successful execution of strategy, an organization can obtain buy-in and commitment from its people at all levels. It can also empower employees to deviate from rote processes when that better serves strategic goals — as in the case of our barista — or to recognize where improvements could be made to certain routines they may otherwise execute without thinking at all.

Systems thinking in practice

I had the opportunity to apply systems thinking in a large manufacturing firm that had experienced a significant increase in maintenance costs for its large production equipment, which was contrary to its strategy to be a low-cost producer in a commodity industry in which it had little to no control over the price of its products. Through the application of systems thinking, we built a graphical model that depicted how current maintenance practices directly and indirectly related to the profitability of the company. By looking at the maintenance function as part of the overall system of this organization, we were able to uncover that machine operators and maintenance staff were rewarded in ways that ultimately produced undesirable results: the machine operators were rewarded for maximizing machine uptime, and the maintenance workers (or “white knights,” as they were called) received high praise for coming in at the 12th hour to fix the machines when they failed. The “run it hard until it fails” mentality that came with this reward system resulted in excessive freight costs to expedite the shipment of expensive parts and high overtime costs. Our systems model clearly showed that the application of preventive maintenance practices would, in the long run, result in less downtime and significantly lower parts, freight, and labour costs.

Once the maintenance teams and operators could see the results of their behaviours, it was easy to get their buy-in to a new way of operating and maintaining their machines. Many positives came out of this exercise: buy-in to the organization’s strategy, a change in performance metrics for the operators and maintenance crews and, ultimately, increased profitability — a major objective of the company's strategy.