Organisations Are Adaptive Social Systems and Perform Accordingly

Organisations mature and change. Yesterday’s fast moving, flexible outfit may easily become weighed down by process and bureaucracy. The ‘organisation as a machine’ metaphor, the staple theory behind the command and control style of management favoured in the West has been found wanting and over 70% of improvement initiatives are failing to deliver the expected bottom line results. No surprise then, that efforts to deal with increasing pressures have resulted in overly complicated and dysfunctional operations where performance is less than ideal. A detailed point of view discussing why attempts to improve performance and quality fail and our approach to avoiding those problems can be found here.

Our approach to improving organisational performance is based on maximising throughput which creates growth opportunities. We use the Theory of Constraints (ToC) to tell us where the bottlenecks are and then apply appropriate techniques to remove them. However, organisational problems are rarely straightforward to unravel, not because the organisations themselves are particularly complicated, complex and dysfunctional behaviour can emerge from very simple systems. What makes it difficult is dynamic complexity which adds the time dimension to the problem space:
  • Patterns and cycles which limit performance emerge from structures and behaviours
  • Change can occur over different timescales - the stockmarket can rise steadily for years and then crash in a very short period. Long standing customers can suddenly migrate en masse
  • Reinforcing and balancing feedback loops between parts of the organisation limit performance. Delays in feedback loops create instability.
  • The various parts of an organisation interact with each other, sometimes in unpredictable ways. Small random perturbations caused by these interactions are shaped and amplified by feedback loops
  • Effects are usually not linear or proportional to the cause. Cause and effect are often separated in time
  • History determines today’s status and choices: things that happened before can’t be undone and may limit the options for future action
  • The complexity of the business environment tends to exceed our understanding resulting in seemingly obvious solutions to problems failing or generating unintended consequences
  • Time delays between initiative and results can result in things getting worse before they get better. A ‘short termist’ approach can subvert high leverage policies
These complications are the reason that we use dynamic modelling and simulation of structures, systems and human behaviour to test hypotheses about organisational problems and their solutions. WIthout simulation, conceptual models and the likely effects of new policies can only be tested and improved by relying on feedback from the real world. This can be very slow in coming and prohibitively expensive if the wrong options are deployed.

With our Organisational Effectiveness service, we establish your performance needs expressing them in terms of business results and then work with you to satisfy them, addressing the problems of dynamic complexity en route to improved performance. Click here to read more on how we work with you to improve organisational performance.

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