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The other night I was craving some Jay Forrester system dynamics goodness, so I decided to run out to the nearby Borders and try to pick up Principles of Systems. Unfortunately it’s out of print, along with the rest of Jay Forrester’s books and most other books on systems theory. As an alternative, I ended up buying Systems Thinking, which is about another offshoot of systems theory I haven’t read about. In this case, it seems to be applying systems thinking primarily to organizational studies, so it’s mostly in the context of business. For that reason, it seems to complement the ideas I loved so much in The Future of Work.

It starts off talking about a hierarchy of forces that convert success to failure. All systems that achieve success will fall someday, or at least lose their competitive advantage. Imitation and inertia are the first two forces. Then came suboptimization, or exaggeration, which is about taking a good idea too far. This may seem to contrast with playing to your strengths, but too much of anything is detrimental.

Miller explains how craftsmanship and productive attention to detail by Digital Equipment Corporation, turned into an obsession with minutia and technical tinkering. Exaggeration was also at work when the innovative capability of Control Data Corportation (CDC) and Polaroid escalated into high-tech escapism and technical utopia. Miller’s list of firms that have been trapped by this phenomenon includes IBM, Texas Instruments, Apple Computer, General Motors, Sears, and many more of the most acclaimed American corporations.

The next force is change of the game, or transformation of the problem. When you solve a problem, you either have existing problems at that level that become the main concern, or you have new problems at a higher level. An example of this is when President Bush lost the election after the success of the Persian Gulf War because the nation shifted its concern from national security to domestic economy. Another example would be when Henry Ford solved the production problem and failed to address the following concern of markets (”They can have any color as long as it is black”).

The last force is shift of paradigm, a result of the cumulative effects of imitation, inertia, suboptimization, and change of game. There’s two dimensions this paradigm shift can happen: how we model reality and the method of inquiry. In this case, reality is the organization. We’ve gone through three models that represent the successive shift in our understanding of the nature of the organization.

Mindless Systems
We first modeled organizations as machines with no purpose of their own. They were tools to reliably serve a function. They were made up of energy-bonded parts that mindlessly served their purpose, which was to serve the function of the machine as dictated by the user. In business, the user is the owner and the owner uses the organization as an instrument for solving a problem and making profit.

Henry Ford’s success in designing a production machine by making both parts and labor interchangeable led to a mass-production system and a whole new competitive game. He could produce 6,000 cars a day, while his closest competitor in France could muster only 700 cars a year. The ability to produce increased by more than an order of magnitude. In one generation we produced goods and services that surpassed the previous cumulative capacity of mankind.

Unfortunately, this doesn’t scale well. The inverse relationship between an organization’s size and the effectiveness of its control system force large organizations towards decentralization, which is incompatible with this model’s principle of no deviation and unity of command.

I wouldn’t call this a centralized system. It reminds me of what The Future of Work called independent agents, where the parts of the machine are the agents–semiskilled industrial workers performing only a simple task. There may be some hierarchy, but it’s not divisional structure.

Uniminded Systems
This model came from biological thinking, or the living systems paradigm. The organization is an uniminded living system, like a person, that has a purpose of its own, typically survival. Survival means growth for biological beings.

Uniminded systems have a choice, but their parts do not. Your heart does not decide on its own that it doesn’t want to work for you. No consciousness, no choice, no conflict. Complete control by an executive function. Of course, in organizations, the workers do have a consciousness. Businesses that best approximate a uniminded system rely on a paternalistic culture where conflicts are resolved by the parenting division. Ultimately, decisions come from the top. The subdivisions simply stay the course. Since the parts do not make decisions, their management process is dominated by “predict and prepare.”

These are the centralized organizations that are extremely hierarchial. It’s interesting to think that Japan, having a relatively strong paternalistic culture, closely approximates a uniminded system, so their organizations are able to capitalize more effectively on the strength of this biological mode of organization because it’s more aligned with their culture.

Multiminded Systems
Social organizations exemplify multiminded systems. These are second-order biological systems in which the parts are as purposeful as the organization itself. Behavior of a system whose parts display a choice cannot be explained by mechanical or biological models. These are sociocultural systems.

Where mechanical systems are energy-bonded, sociocultural systems are information-bonded. Energy-bonded systems have passive and predictable parts, until a part breaks down. Information-bonded systems are much more complex.

An automobile yields to its driver regardless of the driver’s expertise and dexterity. If a driver decides to run a car into a solid wall, the car will hit the wall without objection. Riding a horse, however, presents a different perspective. It matters to the horse who the rider is, and a proper ride can be achieved only after a series of information exchanges between the horse and the rider. Horse and rider form an information-bonded system, in which guidance and control are achieved by a second-degree agreement (agreement based on a common perception) preceded by a psychological contract.

In these organizations, alignment of purpose between the organization and its members is crucial to avoid conflict, which is a much bigger problem for these systems.

The members of a multiminded system share values that are embedded in their culture. Biological systems primarily self-organize through genetic codes, and social systems self-organize through cultural codes. The DNA of social systems is their culture. To command a social system is to command the culture.

Multiminded systems seem to be the best way to model organizations in America, particularly here on the west coast, because of our purposeful and individualistic behavior. These are the decentralized systems that The Future of Work focuses on.

Holistic Thinking
I just went through the paradigms of how organizations are modeled, but the book also talks about another dimension that covers two means of knowing: analytical thinking and holistic thinking. Systems theory is about holistic thinking, and it seems the rest of this book is about multiminded systems from a systems approach.

I love all that I’ve read so far, and I’m only 23 pages in. For a book I bought on a whim, I’m quite happy with my purchase. As I continue reading, I hope to share more of the book to further solidify my understanding.

This entry was posted on Tuesday, December 13th, 2005 at 1:18 pm and is filed under Business, Abstract, Systems Theory. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.