Published: 1 Feb 2018

In the second part of this four-part series on Deming’s System of Profound Knowledge, Alan Clark and Tony Korycki look at organisations as systems, and the importance of ‘seeing the bigger picture’ to stay relevant

“They’re all gone because they sat there and made just what they made for 30 years, and it kind of gets obsolete,” Ted O’Connor, Senior Vice President of the US corporation Mohawk Fine Papers, told reporter David J Unger from the magazine The Point. Ted was referring to paper mills, which had a choice to adapt and didn’t. It sounds like Eastman Kodak, once makers of photographic paper, which failed to produce a timely response to electronic cameras, and then internet-connected smartphones.

The much-prophesied paperless world hasn’t happened. Paper and cardboard are developing and finding new uses. Companies like Mohawk innovated or moved upmarket and survived. Customers’ needs change continually and markets are growing but also changing. Opportunities for sustainable success are still there.

This is one of many examples. Perhaps think of your own example before proceeding.

“Short-sightedness” of businesses, and even whole industries and economies, means leaders have failed to see the ‘bigger picture’. Managers at all levels need to look at the bigger picture, both inside and outside of their organisation.

In his book, The New Leadership for Women and Men, Michael Simmons says that the job of a leader and manager is “working to understand the whole situation and seeing to it that everything goes well and without limit or reservation.”

Looking ‘over the horizon’ at the bigger picture, or whole situation, to understand how it relates to you is called Systems Thinking. There are many ways to view the bigger picture. Practically, it does not matter which way you choose or where you start. Critically, you need to rise above a fixed mindset and day-to-day detail. Thoroughly consider the consequences arising from as many of the influences, relationships and interactions in and around your organisation as possible.

Organisations are relationships and interactions that produce social, economic and ecological outcomes and consequences. Some are intended and the others unintended. Some of these are desired and some undesirable. Among the most important relationships are the ones with customers, the wider marketplace and the organisation’s employees. The biggest challenge for organisations is wilful blindness to the whole system of relationships. As Dr Deming said: “It is not necessary to change. Survival is not mandatory.”

Ways forward

What helps? Over the years, two major approaches to Systems Thinking have been found useful for understanding the whole situation: Soft Systems Methodology and the Viable System Model. Both are supported by considerable information which can be found in books and online.

In addition, you may find a Model of Sustainable Organisation (MoSO) useful for taking a systemic view of your organisation, one that is focused on the customer (see below). Developed by the CQI Deming Special Interest Group (DemSIG), MoSO brings together a number of ideas and sources, although it is only one of many models providing a holistic view.

MoSO embraces many important concepts. One concept, which you may recognise from the model, is what we call ‘Two Jobs’. That means everyone in an organisation has two jobs.

Two Jobs

Job one: daily work is adding value for customers (internal and external) or supporting those who are in the value-adding flow. Job two: improvement work is continually seeking better offerings, systems and processes to deliver and support value added for customers. Opportunities arise for innovation from knowledge and understanding of the whole situation.

A video on the CQI’s DemSIG webpage (link below) explains MoSO in detail. An essential feature of MoSO is the broken line bordering each area of the model, which symbolises the porosity of these boundaries, emphasising that everything is connected. Hence, every aspect of the organisation and the world outside influences and is influenced by everything else, often in unpredictable ways. This is especially true of people.

Terry Rose, a leading member of the MoSO development team, used it with a business that had a sudden change to their environment due to a recent takeover. Working through MoSO helped the client build an understanding of their system and whole situation, changing their outlook. They personalised the model to make it their own, which is fine, as long as meanings are not changed. Instead of waiting passively, they went out to make a case for what they brought to the new environment.

Whilst many people fail to accept change is happening and respond defensively, often to their detriment, it’s possible to overcome that inertia.

In our last article (Deming Management for Quality – part 1: Knowledgology – Theory of Knowledge), we looked at WonderWidgets – a company that took its eye off the ball and were not aware that its website was not capable. The company had its heads buried in detail and didn’t have ‘live data’ that would have allowed it to regularly monitor customers’ needs and market developments. Hopefully it spotted this before it lost too many customers.

An effective quality system should have signed off the capability of the website but would have need to have been holistic.

Over to you

What would conversations stimulated by working through MoSO do for your organisation?

Quality professionals are in a position to gather evidence and feedback of the whole situation from all levels of the organisation, as shown by this interpretation of David Armstrong, Expert on Business Transformation, Governance, Assurance and Improvement, analysis of their remit:

Whatever approach you take to look over the horizon and understand your whole situation or system, you need to do it. Otherwise you risk being surprised by the consequences from interactions inside and outside your organisation.

In our next article, we will explore how proper analysis of data to provide evidence of what is happening can provide a basis for effective decision making and action planning for your system.

About the authors: Alan Clark, CQP FCQI, is a Management Development Coach, Advisor and Trainer at Key Business Improvement. Tony Korycki, BA, MSc, is a Service Introduction and Process Architect at BT Global Services.