Bob Sutton author of “Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management” which I recommended in the past in an excellent post talks about Crappy People versus Crappy Systems which I have liberally included below:

“Simon Caulkin writes a management column in the Observer, a UK-based paper, and has written a couple columns that draw on ideas from Hard Facts. His first one, back in March, has the kind charming title that you don’t get in the states “Bosses in Love with Claptrap and Blinded by Ideologies.” Caulkin recently wrote a column called “You Could be a Genius – If Only You had a Good System,” which draws a bit on our chapter on talent in Hard Facts. He uses recent examples of failures by British sporting teams to show how coaches and critics focus on “naming and shaming” individual athletes, rather than on problems with the system.

This tendency to look for individual goats – and heroes – isn’t just a problem that permeates the world of sports. It is reflected in many misguided ideologies and management practices, which focus excessive energy on hiring stars and weeding-out mediocre and poor performers, and insufficient energy on building a great system that enables most competent people to succeed.

I agree – and can show you evidence – that there are huge differences in individual skill and ability in every occupation. BUT we’ve also got a lot of evidence that ordinary people can perform at top levels in a well-designed system, and even a superstar is doomed to fail in a bad system. Unfortunately, HR and too many other executives believe the advice in books like The War for Talent. (In fact, one of the authors is now head of HR at eBay.. perhaps another reason to short the stock). This is one of the worst management books ever written in my opinion: There is bad evidence from the authors’ own research, no mention of a massive body of research that contradicts many of their claims, and excessive claims are made that if leaders follow the authors’ advice, they can expect “expect a huge impact in a year.”

I will focus on just one claim from this bad book. I quote the authors, “We call it the Rule of Crappy People: Bad managers hire very, very bad employees, because they are threatened by anyone who is anywhere near as good as they are.” This claim is bold, but can’t be supported by any systematic research that I can find. There is evidence that people hire others like themselves, so a reasonable inference is that crappy people will hire equally crappy people — but there is no direct evidence on that hypothesis. I spent weeks and weeks trying to find even a hint that a single article in a peer reviewed journal supported the belief that bad performers systematically hire even worse performers. It is one of those management myths that don’t appear to have any empirical basis.

The worst part about focusing on keeping out crappy people, however, is that it reflects a belief system that “the people make the place.” The implication is that, once you hire great people and get rid of the bad ones, your work is pretty much done. Yet if you look at large scale studies in everything from automobile industry to the airline industry, or look at Diane Vaughn’s fantastic book on the space shuttle Challenger explosion and the well-crafted report written by the Columbia Accident Investigation Board, the evidence is clear: The “rule of law crappy systems” trumps the “rule of crappy people.”

Sure, people matter a lot, but as my colleague Jeff Pfeffer puts it, some systems are so badly designed that when smart people with a great track record join them, it seems as if a “brain vacuum” is applied, and they turn incompetent……. There are smart people in both the FAA and NASA (in fact, people from NASA run key parts of the accident reporting system), but one system is difficult to succeed in because it is crappy. And the other is comparatively easy to succeed in because it is well designed. Again, I still believe that people matter. The very best organizations have both smart people and well-designed systems – Google seem to qualify and so does Cisco.”

The Bottom Line: Organisational performance is driven by the individual and the system

In summary, one school of thought, let’s call it the “war for talent school” over-emphases the impact of the individual in a system. As pointed out by Bob Sutton in the above extract. Another school of thought, let’s call it the “it’s all systems” school tends to over-emphases the impact of the system in shaping individual behaviour. An example is Peter Senge in his book “The Fifth Discipline” states that “When placed in the same system, people, however different, tend to produce similar results“. Both schools have a valid perspective, as leaders we need to strike the balance ensuring that the right individuals are placed in the right system produce the best results.

Leadership is the difference maker. Just as having a crappy system can turn competent individuals into incompetent ones, having competent people in leadership positions can transform an organisation, such as what Lou Gerstner did with IBM. Taking a look at this issue from a leadership perspective, highlights the importance of ensuring that leadership positions are filled with the right people. Poor leaders create poor systems and generate unhealth cultural traits which can take years to unravel. For this reason organisations must hold their leaders to higher standards of capability, character and performance than any other position, given the scope of their impact on systems and people. Too often I’ve seen organsations leave poor performing leaders in positions for too long with disastrous long-term results. When it comes to poor performing leadership, urgent, swift and decisive action to remove them is a must!

John Maxwell expressed the importance of leadership in his book “The 21 Irrefutable Laws of Leadership” as “The Law of the Lid” which states “Leadership ability determines a person’s level of effectiveness.“, the capability of an organisation’s leadership will determine its level of effectiveness. Building on this, consider an organisation with a competent workforce, the impact of its leadership and systems:

• Crappy leadership …. implement …. crappy systems ….. resulting in …. poor performance
• Great leadership …. implement ….. great systems …… resulting in …… great performance

What are your thoughts?

Technorati Tags: Leadership, Book, Management, Systems, Change, Business

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1. Leadership from a Systems Perspective
2. Systems Thinking as a Leadership Practice

The Harvard Business Review’s Breakthrough Ideas for 2006, provides a list of breakthrough ideas for 2006. One of the breakthrough ideas that stood out to me, is the breakthrough idea from Howard Gardner, titled “The Synthesizing Leader”, Howard states that:

The Nobel Prize-winning physicist Murray Gell-Mann once said to me that he thought the most valued personal trait in the twenty-first century would be a facility for synthesizing information. Increasingly, I am convinced he was correct. The ability to decide what information to heed, what to ignore, and how to organize and communicate that which we judge to be important is becoming a core competence for those living in the developed world. The skill of synthesis is particularly crucial for leaders.

I agree, making sense of context, is an important leadership competence. I recently read good description of this, described by John Maxwell from a post in the Student.Inc Blog….

“In all their relationships, effective leaders enlighten others because they can make sense of experience. They also learn from their mistakes and their successes, and – as they seek out a range of experts across their wide constituency – they ask questions and listen.

What’s more, these leaders are able to deal with the complexity of business life and help those around them make sense of it. They do this by keeping things simple and making information accessible. This way, these leaders help individuals understand what’s going on so that they are better able to achieve success. As one leader put it, “There’s so much happening that affects our work. I make sure, at each meeting, that we understand all the important factors and ensure that the next steps are clearly laid out.”

This skill of sense-making, is emerging as an important leadership competence, and as Howard Gardner points out it will become increasingly important. In this new economy, the context of business is growing increasingly complex, the volume of information is increasing and the time to respond is rapidly reducing. The new economy places increased pressure on leaders, as constituents are increasingly looking to leaders for direction in these times of uncertainty. The skill of sense-making helps leaders make contextual decisions and allows for rapid decision-making, increasing an organisation’s responsiveness. As a leader, how competent are you at making sense of the business context? or Is this a skill you need to focus on developing in the years ahead? Personally, sense-making is a skill that I have on my development plan, and I’ll be actively developing this skill over the next two or three years. I will be posting entries on what I’ve learnt from time to time.

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In the complex world in which we live leaders need to be able to think systemically. The concept of systems thinking was popularised by Peter Senge in his book The Fifth Discipline(add here), describes systems thinking as “a discipline for seeing wholes. It is a framework for seeing interrelationships rather than things, for seeing patterns of change rather than static snapshots.” System thinking helps to see the inter-relationships and connections that create the events occurring in our organisations. When we refer to a system we mean:

“A group of interacting, interrelated, or interdependent elements forming a complex whole.” – Answers.com

The core assumption that underlies a systemic approach, is that in this complex world, we live much of life is systemic, a mess of relationships and interaction. This means everything interacts with everything else. This makes introducing change, complex and is the reason why change often produces an array of unintended consequences, “The Law of Unintended Consequences holds that almost all human actions have at least one unintended consequence. In other words, each cause has more than one effect including unforeseen effects“. If we want different results from a situation we need to change the underlying system, which is creating the situation, and in so doing create different results. One of the best tools I use to help me see things systemically is the Iceberg Model. The iceberg model, is a common way to explain systems thinking and helps me think through complex problems, this helps me in the following way:

• To move focus away from events and symptoms and toward system structure.
• To elicit and articulate mental models, then expand them by accounting for feedback, time delays, non-linearity, and other components of complex systems.
• To develop shared mental models within teams and communities.
• To understand where leverage points are and are not.
• Better mental models lead to better decisions about how to lead the transition to sustainability.

A systems perspective is an effective means for helping leaders gain an understanding of the underlying structure that shapes their organisations. The iceberg model is illustrated below.

“A thinker sees his own actions as experiments and questions-as attempts to find out something. Success and failure are for him answers above all.” – Friedrich NietzscheThe first thing to notice about the “iceberg” is that approximately two-thirds of an iceberg is under water, as the captain of the Titanic quickly discovered! The majority of the iceberg remains hidden from view beneath the water. This is true of the system we interact with daily, much of their structure remains under the water, much of the action occurs beneath the waterline. The key to navigating in systems, life and indeed icebergs, is to see the whole system. Not just the individual parts. Walking through the various layers of the iceberg we find the following:

• Events – This is the surface level of the iceberg, usually we can easily see the “events” happening, answering the question ‘what happened?’ Linear thinking causes us to see the world as a series of events. This is not a bad way to see the world, however it does not provide a leveraged way to introduce change. A fixation on events often leads to attributing cause and effects that are superficial, limiting our understanding and our ability to introduce change.
• Trends and Patterns – As we string events together we beginning to recognise trends and patterns, this provides a deeper level of understanding and along with it increased leverage, giving us the insight that ‘this event has happened before’.
• Structure – After a trend or pattern is identified, the next step is to look for the systemic dynamics that creates them. There is some interpretation and theorising needed to develop and understand the structure. However, structure needs to be assessed based-upon the information provided by the trends and patterns. The structure creates the foundation, which supports the trends and patterns, resulting in events. Structure is important as it gives us a deeper understanding of the system and can help us to predict systems behaviour.
• Mental Model – Systemic structures, in turn, are frequently held in place by the beliefs or “mental models” – beliefs may be undiscussable theories, residing in the minds of leaders, on what constitutes quality, service excellence or customer orientation. These beliefs may also affect interpersonal dynamics – such as approaches toward conflict, leadership or the best way to introduce change.

As we move down the iceberg we gain a deeper understanding of the systems and at the same time gain increased leverage for changing the system or it’s results. One of the key tools we have to help gain an understanding of a system is the art of asking questions. Using the model we can ask probing questions, moving from the level of events down through the pyramid to the mental model level, as follows:

• Ask questions to identify key events: ‘What’s happening?’ or ‘What has happened?’
• Ask questions that surface patterns of trends: ‘Has this happened before?’ or ‘Is this problem similar to other’s we’ve had?’
• Ask questions that leads to the structure: ‘What structure is driving this problem?’ ‘Why do you think that?’ ‘What effect has the delay had?’ ‘What explains this?
• Ask questions to understand belief systems and assumptions: ‘What is your understanding?’ ‘What are out beliefs about this?’ ‘What assumptions are we making and why?

Why do all this questioning and analysis you may ask. Well to identify and act upon the system’s leverage points. Leverage points are those places in a system where a small change creates substantial change. This is part science and part art and as leaders we will need to practice moving our thinking from event to structures, by improving how and what types of questions we ask. Develop a theory as to what the structure must be and the beliefs driving the structure and then take action. Realise that the parts of systems do not exist in isolation, everything is connected and little actions can have large effects. Wait for feedback and make further adjustments. For us to learn in the system we need to act.

Technorati Tags: Leadership, Strategy, Systems Thinking, Management, Change, Tool

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1. Leadership from a Systems Perspective

I thought that this was a great quote on leadership from a system’s perspective:

“From a systems point of view leadership is crucial because the most effective way you can intervene in a system is to shift its goals. You don’t need to fire everyone, or replace all the machinery, or spend more money, or even make new laws – if you can just change the goals of the feedback loops. Then all the old people, machinery, money, and laws will start serving new functions, falling into new configurations, behaving in new ways, and producing new results.” – Donella H. Meadows – The Question Of Leadership

Reading this reminded me of the very interesting ChangeThis manifesto by Chetan Dhruve “Why Your Boss is Programmed to be a Dictator“, which was written from a systems perspective.

Technorati Tags: Leadership, Systems, Systems Thinking

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