Why Systems Thinking is Not the Answer

A few years ago I read an interesting column by Malcolm Gladwell for The New Yorker. Published in July, 2002, The Talent Myth is as true today as it was back then. The premise is still quite disquieting:

This "talent mind-set" is the new orthodoxy of American management. It is the intellectual justification for why such a high premium is placed on degrees from first-tier business schools, and why the compensation packages for top executives have become so lavish. In the modern corporation, the system is considered only as strong as its stars, and, in the past few years, this message has been preached by consultants and management gurus all over the world.

There is still a lot to be said for the ability to navigate relationships. Things like common sense, the ability to know what is appropriate in a certain circumstance, and the ability to understand complex social situations, what I call emotional intelligence, for example. Not everything needs to depend on extremely high IQs.

Citing examples from now defunct Enron, Gladwell fleshed out all the reasons why the so called "war for talent" was not such a good idea. From indulging A employees, to putting too much weight and credence on the marvel that star performers would supposedly dazzle us with.

Listening too little or not at all to things like discipline, perseverance, and long term, sustained results did not seem to be a priority at companies where the bar is supposedly so high that we have no idea what it means to achieve. If a business cannot attract customers very easily, that's a good sign that the company might be in the wrong business.

Most importantly, whatever the company's business may be, it needs to be profitable. And however we behave within the context of business, our attainments may be a mixture of many different ingredients with talent and experience being only two of them. Enron was not the only organization in Gladwell's sights, consulting company McKinsey was as well:

The broader failing of McKinsey and its acolytes at Enron is their assumption that an organization's intelligence is simply a function of the intelligence of its employees. They believe in stars, because they don't believe in systems. In a way, that's understandable, because our lives are so obviously enriched by individual brilliance. Groups don't write great novels, and a committee didn't come up with the theory of relativity. But companies work by different rules. They don't just create; they execute and compete and coördinate the efforts of many different people, and the organizations that are most successful at that task are the ones where the system is the star.

Maybe so, but I don't buy it entirely. What happens when the organization thinks only in terms of systems? Almost one year after Gladwell's article, I happened upon a short write up by Alan Webber, co-founder of Fast Company magazine, in USA Today. Titled "Companies repeat mistake of cutting investment in workers", Webber's article begins:

Firms are writing their people off, just as they would machinery they had failed to maintain or upgrade.

It read like deja-vu all over again. People are expenses again, and the cuts are in those areas where companies used to realize their best investments: training, family-friendly programs, flextime and job sharing. Webber calls this "human disinvestment": companies are writing their people off. What happens when we lose track again of innovation and quality, as we did in the 1970s? There is no amount of rationalizing this disinvestment strategy.

The emphasis on the system in this case comes at the expense of the employees. Instead of "you", we have "it"; instead of a person, we have a list of items on a chart. We all know that the only way to remain competitive and grow is to innovate. And the only way to do that is by investing in people.

What kind of organization have you designed, how does it reflect your designs in the marketplace?

Comments

[Roger von Oech]

What a nice post! As someone with degrees from both a state university and an elite university, I know first-hand the dangers that people from the latter place on their own "smarts." As you say, there are many other factors that go into being successful.

[Valeria Maltoni]

Roger:

Thank you for the feedback. This was one of those posts I put out there to learn from what other people see and think.

Although I studied at a prestigious university, I never felt smarter because of it. In Italy, at the time I lived there, the name of the school had relative importance. Things might be different now.

[Sonnie]

Hi,

Sonnie here, from Manila, HR Generalist. I first thought the post is about systemic thinking in contrast with linear.

However, I agree with your observation that organizations are cutting expenses on people. I hope companies will re discover the value of the human capital. Human development goes hand in hand with proper technological advancement.