The Parts Wouldn't Fit
Best of Breed Parts Do Not A System Make
DR. ACKOFF: The characteristic way of management we have taught in the Western World is to take a complex system, divide it into parts and then try to manage each part as well as possible, and if that’s done the system as a whole will behave well, and that’s absolutely false, because it’s possible to improve the performance of each part taken separately and destroy the system at the same time. This is true whether we’re talking about education or a corporation.
A very simple example would be if you took one of each of every automobile available in the United States and brought them together and had a group of engineers decide which one had the best engine — perhaps the Rolls Royce — which had the best transmission, which is the best alternator. And for each part required for an automobile found the best one available, if you then instructed the engineers to take those parts off the automobiles and assemble the best possible automobile out of all the best parts, you would not get an automobile.
DR. DEMING: No, it would not run.
DR. ACKOFF: No, the parts wouldn’t fit, and that’s the critical part about a system.
DR. DEMING: They would not work together.
DR. ACKOFF: Good. So, it’s the working together that’s the main contribution to systemic thinking, as opposed to working in parts separately.
DR. DEMING: Yes, it is so easy to observe, to see, to understand, yet people do not know about it.
DR. ACKOFF: Yes. The art of managing interactions is very different indeed than the management of actions, and history requires this transition for effective management.
WHEN you begin to study Dr. Deming’s theory of management, it doesn’t take long before you encounter his well-known contemporary, Dr. Russell Ackoff, and for good reason: Their material and thinking are very complementary. The above exchange is a favourite of mine because of Dr. Ackoff’s choice of a very relatable and understandable metaphor that makes a fundament of systemic thinking (appreciation for a system, in Deming’s System of Profound Knowledge) clear and apparent.
While it has been almost four decades since this interview, Ackoff’s observation on the characteristic way management has been taught and practised here in North America hasn’t changed: We still look to manage parts (people, materials) in isolation with the expectation the whole will follow suit, and this leaves a lot of unrealized opportunity on the table.
Destruction of a System
In The New Economics Deming provides us with his model of Production Viewed as a System, along with a reinterpretation on how to destroy it by isolating and breaking it into competitive parts that are optimized and measured separately. The result is no longer a system, because the parts do not work together. Ironically, this style of organization, comprised of divisions, is celebrated as a model for effective management.
Example
In the past several years, a framework of “best practices” has come to dominate the agile software delivery landscape, promising increased productivity and performance once implemented:
It certainly is impressive in scope and is expertly aimed at leadership who gain some security through seeing a plan, even if it is a mirage. However, in my opinion, it’s a plan for disaster because it does not consider, per Dr. Ackoff and Dr. Deming above, how the parts work together, not just within the software delivery department but the organization as a whole: It just assumes they will, and if they don’t they can be convinced. The rest of the organization’s structure and prevailing modes of management, which have precipitated the need for adopting agile and lean practices in the first place, won’t change: There will still be Management by Objective, Management by Results, Management by Visible Figures Alone, Fear, Extrinsic Motivation, Merit Pay, Performance Appraisals, etc. that all serve to pull whole-system teamwork apart from the inside-out. Moreover, it largely absolves leadership from transforming themselves - no new knowledge will be gained because the theory has remained static.
Learning to Manage Interactions
As an antidote we can use a Functional Interdependence Matrix to evaluate the interactions we have in our system and surface systemic relationships for improvement. The one pictured below was first developed by Ed Baker, a former corporate director at Ford who worked extensively with Dr. Deming.
You can fill this out using different departments or people to match your organization’s system boundaries:
For each cell, evaluate the relationship of the corresponding functions from the perspective of a “customer” and “supplier”, asking:
What is the nature of the interdependence?
What does each customer need from each supplier?
What systems, processes, routines, and feedback loops need to be available to make provision possible?
How will the relationships be routinely reviewed?
Reflection Questions
Consider your own experiences over your career through the lens of the above exchange between Dr. Ackoff and Dr. Deming: In what ways were the organizations you have worked for managed? Entirely by parts, interactions, or somewhere in-between? Were “best practices” used? In what ways? What specific examples or scenarios can you think of that demonstrate the style of management? What were the predicted outcomes? What actually happened?
Draft your own Functional Interdependence Matrix using Ed Baker’s example above. What did you learn about who-needs-what and who-depends-on-whom? How are these needs fulfilled today? What interactions are missing? Share your matrix with a colleague to validate your observations and consider how the interactions could be better managed. Which need repair or bolstering? What current system policies or procedures enhance or degrade these relationships?
Extra Credit
Check out Eric Budd’s 2015 Deming Institute Fall Conference talk about the System of Profound Knowledge, in particular this segment where he describes sub-optimization of a system and engages the audience in a hands-on exercise using a foam ball. Profound learning!