When errors such as these surface, blaming seems to be a natural reflex in many organizations. Even those individuals who wish to learn from mistakes fall into naming culprits. Once we figure out who’s at fault, we then try to find out what is wrong with the supposed offenders. Only when we discover what is wrong with them do we feel we have grasped the problem. Clearly they are the problem, and changing or getting rid of them (or simply being angry at them) is the solution.

There’s a problem with this common scenario, however: Where there is blame, there is no learning. Where there is blame, open minds close, inquiry tends to cease, and the desire to understand the whole system diminishes. When people work in an atmosphere of blame, they naturally cover up their errors and hide their real concerns. And when energy goes into finger pointing, scapegoating, and denying responsibility, productivity suffers because the organization lacks information about the real state of affairs. It’s impossible to make good decisions with poor information.

In fact, blame costs money. When the vice president of marketing and the vice president of R&D are blaming each other for quality problems in product development, they can’t focus on working together to bring the best products to market. Their finger pointing results in lost sales potential.

Blame rarely enhances our understanding of our situation and often hampers effective problem solving. So how do we avoid the tendency to blame and create organizational environments where we turn less frequently to blame? Clarifying accountability is one option. This process of assigning responsibilities for a situation in advance can help create a culture of real learning.

Accountability comes from clear contracting, ongoing conversations, and an organizational commitment to support accountability rather than blame. The contracting focuses on tasks to be accomplished, roles to be taken, processes to be used, standards sought, and expected results. Periodic conversations over time review both explicit and tacit contracts in order to verify shared understanding. This communication becomes most useful when people are willing and able to discuss their common difficulties within a larger setting that values accountability.

The Differences Between Accountability and Blame

The dictionary helps clarify the differences between accountability and blame. To be accountable is “to be counted on or reckoned on.” To blame is “to find fault with, to censure, revile, reproach.” Accountability emphasizes keeping agreements and performing jobs in a respectful atmosphere; blaming is an emotional process that discredits the blamed.

A focus on accountability recognizes that everyone may make mistakes or fall short of commitments. Becoming aware of our own errors or shortfalls and viewing them as opportunities for learning and growth enable us to be more successful in the future. Accountability therefore creates conditions for ongoing, constructive conversations in which our awareness of current reality is sharpened and in which we work to seek root causes, understand the system better, and identify new actions and agreements. The qualities of accountability are respect, trust, inquiry, moderation, curiosity, and mutuality.

Blaming, on the other hand, is more than just a process of allocating fault. It is often a process of shaming others and searching for something wrong with them. Blaming provides an early and artificial solution to a complex problem. It provides a simplistic view of a complex reality: I know what the problem is, and you’re it. Blame thus makes inquiry difficult and reduces the chances of getting to the real root of a problem. Blame also generates fear and destroys trust. When we blame, we often believe that other people have bad intentions or lack ability. We tend to excuse our own actions, however, because we know firsthand the challenges we face. The qualities of blame are judgment, anger, fear, punishment, and self-righteousness.

The Organizational Consequences of Blame

Blame Slows Information Flow and Reduces Innovation. People sometimes use blame as a strategy to get others to take ownership of problems. But this approach often backfires because people begin to equate acknowledging mistakes and surfacing bad news with punishment. When this happens, two reinforcing sets of behaviors may emerge: one by managers who are ostensibly seeking information and then punishing those who bring bad news, and the other by groups of employees who hide information and try either to protect each other or to blame each other. People who feel compelled to protect themselves can’t admit mistakes-and therefore can’t learn from them. Under these conditions, individuals spend time denying problems rather than solving them, and

The Reinforcing Cycles of Blame

Blame causes fear, which increases cover-ups and reduces the flow of information. The lack of information hinders problem solving, creating more errors (R1). Fear also stifles risk taking and discourages innovation (R2).

As shown in “The Reinforcing Cycles of Blame,” blaming leads to fear, which increases cover-ups and reduces the flow of information by stopping productive conversation. The lack of timely and accurate information about an organization’s current reality hinders problem solving, leading to more errors and more blame (R1).

Blaming and the fear it generates also discourage innovation and creative solutions. Frightened people don’t take risks, which are essential for innovation. Lack of innovation, in turn, leads to an inability to solve problems effectively and an increase in errors (R2).

Blame “Shifts the Burden.” In a “Shifting the Burden” situation, a problem has multiple solutions. People often grab onto the most obvious, short-term fix rather than search for the fundamental source of the problem. The lack of a permanent, long-term solution reinforces the need for additional quick fixes. Blame is a fix that actually diverts the blamers’ attention away from long-term interpersonal or structural solutions to problems (see B1 in “The Addiction to Blame” on p. 3).  Although blame provides some immediate relief and a sense of having solved a problem (“It’s their fault”), it also erodes communication (R3) and shifts the focus even further from accountability (B2), the more fundamental solution.

Blaming can also be addictive, because it makes us feel powerful and keeps us from having to examine our own role in a situation. For example, Jim, a brewery manager, got word that things were slowing down on line 10, a new canning line. He left his office and headed to the plant floor. “Grady, you’ve got to get this line going. Get with it,” he told his line foreman. Grady replied, “Jim, you know those guys on the last shift always screw things up.”

This is a familiar conversation to both men. Each walks away thinking something is wrong with the other. Jim thinks, “That Grady, I give him responsibility and he just can’t get it together.” Grady thinks, “Why is he always on my case? Can’t he see this is a tough issue? He’s so simplistic and short-sighted.”

In this scenario, Jim can walk away feeling relieved because he knows what the problem is-Grady is a lousy supervisor and may need to be replaced. Grady, on the other hand, can blame Jim for being a shortsighted, run-the-plant-by-the-numbers manager. Both get some initial relief from blaming each other, but neither solves the ongoing problem.

Moving from Blame to Accountability

How, then, do we move from blame to accountability? Even within carefully designed systems, people may fail at their work. And even with a knowledge of system dynamics, we still often look for an individual’s failure as a way to explain a problem. One leverage point is to understand the organizational dynamics of blame as described above. There is also leverage in changing how we think about and conduct ourselves at work.

There are three levels of specific behavioral change in moving from blame to accountability-the individual level, the interpersonal level, and the group or organizational level. First, individuals must be willing to change their own thinking and feelings about blame. Second, people need to become skillful at making contracts with one another and holding each other accountable for results. Third, groups need to promote responsible and constructive conversations by developing norms for direct conflict resolution between individuals. These behavioral changes-and the use of systems thinking to focus on the structures involved and not the personalities-can help create a constructive organizational culture.

Individual Level

Below is a list of ways to start breaking the mental models we hold about blame. When you find yourself beginning to blame someone else for a chronic problem, refer to this list and to the sidebar “Distinctions Between Blame and Accountability” (see p. 4).

1. Remember that others are acting rationally from their own perspective. Given what they know, the pressures they are under, and the organizational structures that are influencing them, they are doing the best they can. Give others the benefit of the doubt.

2. Realize that you probably have a role in the situation.Your behavior may be influencing this person’s behavior and may be producing some unintended effects. Keep in mind that you will tend to justify your own actions and point of view and discount the other person’s perspective.

3. Remind yourself that judgment and criticism make it very difficult to see clearly. Judgments are mental models that limit the ability to take in new data. They tend to increase the likelihood of anger and make it difficult to learn. The following questions may help stretch your thinking and ease angry feelings. Ask yourself:

• What information am I missing that would help me understand this person’s behavior?
• How might this behavior make sense?
• What pressures is he or she under?
• What systems or structures might be influencing this behavior?

4. Use a systems thinking perspective to explore the pressures on the players involved. Notice that there are some larger forces at work that are probably having an impact on both of you. For example, when organizational goals, strategies, and values aren’t clear, groups will sometimes work toward different objectives. A group that values customer service over cost will conflict with a group that is trying to lower expenditures. Identify some key variables and their interrelationships, and ask, Is this situation an example of a vicious cycle, “Shifting the Burden,” or “Accidental Adversaries”?

5. Be willing to be held accountable. This means that, when an issue comes up, you are willing to consider whether you have lived up to your end of an agreement or expectation. Ask yourself:

• Did I have a role in this situation?
• Did I take some actions that seemed right at the time, but that had unintended consequences?

6.Work constructively with your anger. Sustained anger may point to personal issues that have been triggered by the current situation. Broken agreements, mistakes, and blame all have difficult associations for most people. However, in a learning environment, constructive resolution of conflict can also lead to significant personal growth. The guiding questions here are:

• What am I learning about myself in this situation?
• What does this remind me of?
• What new behaviors or thoughts does this situation call for that may be a stretch for me?

Interpersonal Level

Initial Contracting. At the beginning of any working relationship, it’s vital to come to some basic agreements defining the nature and scope of the work, specific and yet-to-be-defined tasks, deadlines and related outcomes, processes or methods to be used, interim checkpoints and expectations at those checkpoints, standards, and roles.

It’s also helpful to discuss what to do in the event of a misunderstanding, a lapse in communication, or a failure to keep an agreement. Imagine possible breakdowns and design a process for handling them. If breakdowns do occur, be prepared to remind others of the plan you had prepared.

When lapses do take place, they need to be brought to the collective attention as soon as possible. Misunderstandings and broken agreements often promote anger, frustration, and blame. Allowing unaddressed misunderstandings to fester can hamper productive conversations. By contrast, raising issues early can minimize escalation of problems.

Accountability Conversations. Once any project or working relationship is under way, it’s useful to check in periodically on the state of the partnership through accountability conversations. You may or may not have clear recollections of the initial contract regarding the task, roles, standards, processes, and expected results. Either way, it’s productive to establish or reestablish these agreements and explore what is working or not working as you take action together to create envisioned results.

Accountability conversations aren’t always easy. However, the skills they require can be applied and developed over time. Some of the basic tools of learning organizations come into play here-the ladder of inference, for example, can be used to create a conversation of inquiry rather than inquisition. The accountability conversation is also the perfect setting for practicing left-hand column skills to surface assumptions blocking honest and productive discourse. In addition, admitting the tendency to

Distinctions between blame and accountability

Here are steps for initiating an accountability conversation:

1. Find out whether the person you are working with is interested in seeing problems as learning opportunities. If so, when a problem occurs, include other people who are also interested in the situation. Other people’s perspectives can be helpful because often two people in conflict are actually mirroring the conflict of a larger system within the organization.

2. Create a setting that is conducive to learning.

• Allow plenty of time to address the issues.
• Reaffirm with each other that the goal is to learn, not blame.
• Establish confidentiality.
• Be truly open-minded.
• Listen hard to the other person’s perspective

3. Have a conversation in which the two (or more) of you

• Clarify your intention for the meeting.
• Identify the data and any assumptions or conclusions you have drawn based on that data.
• Identify the pressures each of you is experiencing in the situation.
• Identify any stated or unstated expectations. If implicit agreements were not jointly understood, this is a good time to clarify and reestablish shared agreements.
• Analyze the problem from a systems perspective. Clarify how your mutual beliefs and actions might be related and are perhaps reinforcing each other.
• Identify some new ways to address the problem.

Group Level

How people talk about one another in an organization affects the levels of accountability and trust. Often, because people are reluctant to discuss accountability issues directly, they go to a third party to relieve their discomfort and get support for their point of view. The complaint does not get resolved this way, however, although the person with the complaint gains some relief. Bringing a complaint to a third party to clarify a situation can be a much more productive alternative.

To see how this works, let’s take a situation where Tony is angry with Lee because Lee wasn’t fully supportive in a meeting. Tony complains to Robin that Lee is unreliable. Robin sympathizes with Tony and agrees that Lee is unreliable. Tony and Robin now feel closer because they share this point of view. Lee does not yet know that Tony has a complaint. Later, though, Robin, busy with other projects, puts off one of Tony’s requests. Now Tony complains about Robin to Lee, and Robin doesn’t get the necessary feedback. Over time, all of these relationships will erode.

What is the alternative to this kind of dysfunctional blaming and resentment? The solution is a deep commitment on the part of all these people to work through their reluctance to give and receive difficult feedback. In addition, they need to learn how to hold one another accountable in an ongoing way. Now, when Tony is angry with Lee and goes to Robin, the purpose is to get coaching on how to raise the issue with Lee, not to get Robin’s agreement on what is wrong with Lee. In addition, Robin’s role is to make sure that Tony follows through on raising the concern directly with Lee.

To resolve conflict directly:

1.Bring your complaints about someone else to a third person to get coaching on how to raise your concerns.
Valuable questions from the coach include:

• Tell me about the situation.
• What results do you want?
• What’s another way of explaining the other person’s actions?
• How might the other person describe the situation?
• What was your role in creating the situation?
• What requests or complaints do you need to bring to the other person?
• How will you state them in order to get the results you want?
• What do you think your learning is in this situation?

2. Raise your concerns directly with the other person. Reaffirm your commitment to maintaining a good working relationship and find a way to express your fundamental respect for the person. The ladder of inference can be a helpful tool for focusing on the problem. Start by identifying the data that is the source of your concern. Then spell out the assumptions you made as you observed the data and any feelings you have about the situation. Finally, articulate your requests for change. During the conversation, remind the other person that reviewing the concern is part of learning to work together better

3. Let the coach know what happened.

4. Outside of this framework, refrain from making negative comments about people

5. For listeners who frequently hear complaints about a third party and want to create a learning setting, it can be helpful to say something like: “I’d like to help, but only if you want to create a constructive situation. We can explore these questions; otherwise, I prefer not to listen to your complaints.”

Organizational Accountability: The IS Story

Systems thinking provides useful tools for surfacing and breaking reinforcing cycles of blame within an organization. In the story below, a group was able to use causal loop diagrams to help them move beyond blame and craft a constructive, long-term solution.

The Information Systems group of a manufacturing plant was meeting to discuss their lack of progress on a large project to overhaul the department. Initially, the IS group decided that top management’s actions caused the group’s ineffectiveness. The plant management team (PMT) kept adding projects to the group’s already full plate. Members of the PMT responded to “squeaky wheels” by giving otherwise low-priority projects the force of their support. Also, the PMT didn’t reinforce plant wide policies the IS group had developed. Most important, the team didn’t give group members the support they needed to stick to the IS overhaul they had committed to, and wouldn’t give them the budget to hire the additional staff they sorely needed.

But when the group mapped out their current situation in a causal loop diagram, they gained a new perspective on the problem. They found that the situation resembled a “Success to the Successful” story, in which two or more projects or groups compete for limited resources.

The diagram “Success to the Squeaky Wheel” shows how, in this case, the IS group’s attention to urgent requests diverted resources away from prioritized items. Because rewards for completing urgent requests were heightened, the urgent tasks continued to receive greater attention (R2).  At the same time, the rewards for and focus on prioritized tasks decreased (R1). Finally, as people realized that urgent requests received greater attention than prioritized items, the number of “squeaky wheels”-or people promoting their own agenda items to management-proliferated. This development was followed by an increase in management’s efforts to get action on those agenda items, which further promoted urgent items over prioritized ones (R3).

After examining the causal loop diagrams, the group realized that they had played a role in the stalled progress on the overhaul project. Although IS team members encouraged each other to blame the PMT, no one in the group had given the PMT feedback concerning the impact of their requests and lack of support.

Armed with a systems view, the group identified several actions they could take to shift these unproductive dynamics. They decided to tell the PMT that they recognized that the IS overhaul was a top priority for the plant as a whole. They would point out that they couldn’t make progress on the overhaul if they continued to respond to “squeaky wheels. “The group would also let the PMT know that when they received additional requests, they would ask:

• How much of a priority is this request for you?
• Are you aware that there is a tradeoff in priorities?

The group concluded that they would issue a memo to the PMT describing their priorities and soliciting the PMT’s support of those priorities. They would also request that the PMT clearly communicate the priorities to the rest of the plant. In the memo, they would indicate the tradeoffs they were making and identify how their choices would help the company as a whole. The group felt that, with the PMT’s support, they would have the authority to focus on the prioritized project instead of responding to urgent requests.

Conclusion

Developing accountability skills is challenging; it takes courage and the willingness to learn new ways of thinking and acting. So why is moving from blame to accountability worthwhile? Because blame is like sugar – it produces a brief boost and then a let-down. It doesn’t serve the system’s long-term needs and can actually prevent it from functioning effectively. On the other hand, developing accountability skills and habits on every level of your organization can be an important element in maintaining your organization’s long-term health.

Marilyn Paul, PhD, is an independent organizational consultant affiliated with Innovation Associates, an Arthur D. Little company. She has sixteen years of experience facilitating organizational change. One focus of her work is peer mentoring and capacity development.

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The Paradox of KSFs

Most of us approach a large, complex issue by breaking it down into manageable parts. By focusing on a few aspects at a time, we sometimes succeed in improving the parts, but we often fail to address the problem as a whole. In the long run, this approach robs us of resources that we could have used to look at an issue from a systemic perspective.

We can find ample evidence of the limits to a factors approach in medical literature. In Sweden, for example, researchers tried to reduce cardiovascular risk factors in 3,490 business executives. After five years of intervention and 11 years of follow-up, the executives had reduced their risk factors by an average of 46 percent, yet they had a higher death rate than members of a control group. A similar study in the U.S. produced comparable results.

We might dismiss these studies as statistical flukes if the consequences weren’t so serious. The sad reality is that these results probably reflect many of our efforts, not just in healthcare but in virtually every facet of our organizations. Although we focus time and again on improving single factors, we fail to acknowledge that the health of most individuals—and most systems—is greatly determined by the relationships among critical loops. The line “the operation was successful, but the patient died” sums up the pitfalls of the factors approach to complex systems.

Beyond Factors to Loops

To create long-lasting success, we need to extend our factors approach and identify the interrelationships among the factors that drive the dynamics of the system—in short, to identify the Key Success Loops (KSLs).When we take a systemic approach, we realize that the lowest meaningful units of analysis are loops, not individual factors—and we no longer initiate actions on any factors until we distinguish the critical loop or loops involved.

Now, imagine being given the same charge as before from corporate (see “Key Success Loop Approach”). We begin in the same way, by brainstorming and then prioritizing KSFs (Step 1). But instead of leaping into action by assigning the factors to teams, we take each of the high-priority factors and identify at least one reinforcing loop that will make the factor self-sustaining without continued external investments (Steps 2 and 3). We integrate all of the loops into a single diagram, in which the individual loops are connected by the factors they have in common (for example, B and D in Step 4).We then look at the diagram as a whole and decide where to make the investments that would help support the success of the entire system (Step 5). Only after we have developed a sufficient understanding of the system will we assign teams to implement specific success loops. Each team then collaborate closely with those teams whose loops are directly connected to theirs (Step 6).

Launching a New Venture

Let’s walk through a simplified example of a Key Success Loop approach. Suppose we want to launch a new business venture in our organization (see “New Business Venture Success Loops”).We begin by brainstorming a list of KSFs that we believe are important to our success, such as number of new products, skilled people, profit, and ability to meet customer needs (Step 1).

We then focus on the first factor and try to identify a key loop that would make it self-reinforcing. We can ask either “What would an increase in the number of new products cause?” or “What would be an important driver of growth in the number of new products? ”The first question leads us downstream in the arrow flow to “Revenues,” while the second takes us in the upstream direction to “Acquisitions.” Either way, we try to create a reinforcing loop around the original factor (Step 2).We then repeat the process with the remaining factors (Step 3).

After we have created a loop for each KSF, we look for common variables in the individual loops. In this example, loops R1 and R2 can be linked through “Revenues” and “# of New Products” (Step 4). Once we have a diagram that maps the key linkages, we can begin to identify the best places to make high-leverage investments (Step 5). Now we are ready to assign teams to focus on each of the loops through a collaborative effort in which each team understands its loop in the context of the larger system (Step 6).

Benefits of KSLs

Moving beyond Key Success Factors to Key Success Loops offers a number of advantages. First, because the loop approach links you to a broader set of variables, you reduce the risk of focusing on the wrong factors. Even if you initially pick the wrong factors, the process of mapping the loops increases the likelihood that you will include the most important ones. Also, identifying the loops decreases competition for limited resources. When everyone can see the interconnections, teams are less likely to “pump up” their own factors without regard for the effect on others. Loops can also provide a clearer picture of where investing in one point could positively affect multiple factors. Finally, rather than being stuck in the “Ready, Fire, Aim” syndrome that many organizations experience, emphasizing KSLs can actually give you a viable “Ready, Aim, Fire” approach.

Daniel H. Kim is a co-founder of Pegasus Communications, Inc., and publisher of The Systems Thinker.

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Karen suspected that these conflicting styles had a lot to do with personality differences. She had once taken a survey that showed she was a “Feeler,” and she was pretty sure that Jenny was a “Thinker.” Knowing this, though, didn’t change the frustration she felt when problems arose.

Because the challenges with Jenny seemed so minor, Karen thought they should be easy to fix. It was obvious that Jenny shared Karen’s passion for their work. Plus, Jenny had brilliant ideas that often led to breakthroughs on tough issues. Karen only wished that Jenny weren’t so cold and distant.

Although they may seem trivial, the personal differences that Karen experienced in her relationship with Jenny had a significant impact on their working relationship. Fortunately, while these opposing styles may generate conflict, they also offer great richness in tackling complex issues. But in order to get out of counterproductive patterns of interaction that have created problems in the past, Karen needs a new way of viewing differences: one that enables her to live with the tensions differences generate, create a rich vision of what she wants to create, and be flexible in the pursuit of her vision. Otherwise, Karen’s current way of thinking will continue to limit her ability to respond constructively to Jenny and others.

No doubt you, too, are aware of differences between you and others in your organization. How can you deal with these differences in productive ways? And how can you use them to build your own self-knowledge and interpersonal skills? One promising approach stems from a school of thought known as “Dilemma Theory.”

A dilemma is a choice between two options, both of which are attractive but appear to be mutually exclusive: an “either/or” scenario.

Dilemma Theory

Differences have always been a basis for learning. When people travel, they find themselves stimulated by the cultural differences they encounter, often returning home with new understanding and appreciation of themselves and their communities. But differences can also serve as the basis for intractable conflict and struggle. When we encounter someone whose worldview is diametrically opposed to our own, we often fall into an “us” versus “them” and “good” versus “bad” dynamic.

Dilemma Theory, based on the work of researchers Charles Hampden-Turner and Fons Trompenaars, seeks to help us overcome these barriers and learn from differences. Hampden-Turner summarizes the philosophy as follows: “We can never grow to become great business leaders until we actively strive to embrace the behaviors and attitudes that feel most uncomfortable to us. The most effective management practices are those that gently force engineers, managers, and employees to embrace the unthinkable.” Hampden-Turner and Trompenaars focus primarily on cultural differences, but the concepts they developed can help to explain the dynamics associated with any kind of differences.

As they point out, a dilemma is a choice between two options, both of which are attractive but appear to be mutually exclusive: an “either/or” scenario. You face dilemmas every day: whether to work on a project alone or with others; whether to give attention to details or focus on the “big picture”; whether to confront someone’s inappropriate behavior or pass over it; whether to stay with what you know or try something new.

While such dilemmas may seem straightforward, they are rich with dynamic complexity. The dynamism stems not from the simple choice that a dilemma presents, but from the mechanisms that people and societies develop for making such decisions. How we become skilled at handling dilemmas has an enormous impact on the outcome. In this context, being skilled means competently performing a task without needing to consciously focus on it. When we repeatedly do something, we eventually reach the point when we no longer need to call to mind the steps it requires; we just do them. I have become skilled in the use of computer keyboards, so as I type, I do not have to deliberately hunt for the right keys to make words. I think of the word I want and my fingers make it happen without any apparent thought on my part.

Just as we become skilled at physical tasks such as typing, we gain mastery in handling dilemmas. If we repeatedly resolve dilemmas by choosing one option over the other, the option we choose becomes an unconscious preference. Over time, we stop being aware that we are making a choice — we simply assume it is the best course of action. These deeply internalized preferences become values that shape the decisions we make and the actions we take.

Many people believe that their way of dealing with something is obviously superior, even when they encounter others who routinely make the opposite choice. In this situation, it is easy to characterize different choices as absurd or based on ignorance. For Karen, the rightness of working collegially and expressing her emotions was something she felt from deep within and found hard to put into words. Little wonder she found it perplexing when Jenny worked in a contradictory way.

Personality differences also play an important role in the formation of values. We are each born with innate characteristics that shape our preferences and interests (Sandra Seagal and David Horne’s work on Human Dynamics is one framework for understanding variations). So both nature and nurture give rise to the differences we encounter.

Universal Dilemmas

Just as people develop a set of values based on the cumulative effect of the choices they make, so do communities. All communities encounter dilemmas, and some dilemmas are universal. Universal dilemmas include:

• Whether (a) rules should apply to everyone or (b) exceptions should be made depending on who is involved.
• Whether status should be awarded (a) on the basis of one’s position in the community or (b) on the basis of what one has achieved.
• Whether (a) the needs of the community should outweigh the rights of individual members or (b) vice versa.

While these dilemmas are universal, the ways in which communities resolve them are not. Each society will develop its own pattern of values, perhaps putting (a) ahead of (b) with one dilemma but (b) ahead of (a) with another.

What determines which values develop in a particular community? It depends on the conditions that exist when the community first encounters a dilemma. All manner of variables have an effect. The personality dynamics of influential community leaders — the “core group,” to use the term coined by Art Kleiner — play a key role. The history of the community and its present needs all shape how it resolves a dilemma. When a community repeatedly resolves an issue by giving priority to one option, what was once a conscious choice becomes an unconsciously held value.

We generally don’t examine taken-for-granted ways of doing things until we encounter someone who does things differently.

Values are self-perpetuating. For example, if we value achievement — rewarding people for what they accomplish rather than who they are — we are naturally interested in how we can measure it. Having established a way of measuring achievement, we start to do so. In this way, we create an infrastructure to support a value that started off as a preference for one way of acting over another. As we use the infrastructure, we reinforce the value and strengthen our preference for it.

On an individual level, when children grow up, they take for granted that the way their family operates is the norm — how they celebrate holidays, deal with money, resolve conflicts, and so on. In the same way, people do not usually question the values of the community in which they live. We generally don’t examine taken-for-granted ways of doing things until we encounter someone who does things differently, whether at an individual or group level.

Dynamics of Difference

What happens when people with opposite values — such as Jenny and Karen — interact? The outcome is typically not what we would hope. Because a dilemma involves options, both of which are advantageous, the values represented in the dilemma are also complementary. The more one of the values is expressed, the greater the need for the other becomes. Jenny and Karen have the potential to balance one another, making up for each other’s shortcomings and supporting each other’s strengths, and we might hope that they would find ways to capitalize on their complementary skills. But two phenomena often prevent that from happening: skilled incompetence and schismogenesis.

Skilled Incompetence. The reason a dilemma is challenging is that both options are attractive: Each provides real — though different — advantages. In our story, Karen benefits from being expressive, and Jenny benefits from keeping her emotions in check. But when one option becomes an unconscious preference, it is at the expense of the other. So the more that Karen pursues the value she derives from acting expressively, the more she misses out on the advantages of objectivity.

While Karen values subjectivity, she isn’t blind. She can see that Jenny benefits from her objectivity. She may think, “I wish I was more like Jenny,” and decide to change in that direction. But despite her determination, Karen may still operate off an unconscious preference for subjectivity. For this reason, she may say one thing while at the same time do the opposite and not be aware of the discrepancy. Chris Argyris coined the term “skilled incompetence” to describe the mismatch between what people say and what they do.

This pattern of behavior can also happen at an organizational level. Companies may publish lists of values, but these often express qualities that people think are needed rather than ones that the organization actually possesses. In all probability, a quality will make it onto the list of “corporate values” because it is something the organization does not value!

Schismogenesis. Another dynamic that occurs when opposites interact is what anthropologist Gregory Bateson termed “schismogenesis”: the splitting apart of complementary values. Schismogenesis happens when an initially small difference gets progressively bigger. Imagine that Karen has come up with a breakthrough on a project that she wants to share with Jenny. She goes to Jenny’s office and excitedly blurts out that she has news. Jenny is overwhelmed by Karen’s energy, thinks Karen should calm down, and tries to encourage her to do so by lowering her own voice and speaking slowly. Karen thinks Jenny doesn’t understand the importance of the message, so she ramps up her level of enthusiasm. Jenny gets quieter and calmer. Karen gets louder and more excited. What started off as a small difference has become enormous through the course of the interaction.

Something else has happened, too. Karen and Jenny have become polarized, with a distorted view of what their values represent. How so? When seen through the lens of Dilemma Theory, a value is a preference for acting one way rather than another. This difference also depends on who else is involved. Karen values expressiveness because this term describes the difference she sees between herself and others she interacts with. But in many communities throughout the world, Karen would be viewed as the least expressive person.

Nevertheless, Karen has come to consider expressiveness as something that defines who she is. She doesn’t think, “I have a stronger preference for expressing and acting on my feelings than Jenny.” Rather, she says to herself, “I am a Feeler.” Thinking of herself in this way makes a tremendous difference to the repertoire of actions that Karen allows herself to use. Viewing her own and Jenny’s values as permanent characteristics, Karen feels compelled to act in harmony with her values. She shuns the alternative way of acting.

How will this pattern of behavior affect Karen when it comes to learning and personal mastery? Our values influence what we are ready to learn. Karen is attracted to forms of learning that support her preference for emotional expressiveness. She may reject opportunities to learn what she does not value, such as the use of rigorous analytical decision-making tools. She is not naturally interested, and it just feels wrong somehow.

By bounding the scope of her inquiry, Karen limits her capacity to create what is really important to her. Her values push her to learn some things and neglect others. While she may be aware of her need to gain competency in those other areas, what she sees as personal characteristics play a crucial role in shaping how much effort she invests in her learning efforts. This process represents a “Success to the Successful” archetypal structure, in which Karen reinforces the values she already has and neglects areas in which she could benefit from growth (see “From Preference to Value”).

Reconciliation

To reap the benefits from diversity, Dilemma Theory encourages people to look for ways of reconciling the conflicting values they encounter. While the dynamics of culture and personality often lead people to value one option and neglect the other, a dilemma is a dilemma because both of the options are important and needed. Reconciliation involves understanding the circularity of the relationship between values. The two options involved in a dilemma — the potential values — are complementary. The more we do one, the more we need to do the other. We could diagram the relationship as shown in “Complementary Values”.

Schismogenesis is a process that disrupts the connection between the two values. Reconciliation does the opposite; it strengthens the connection. Rather than encouraging one or other of the values to be expressed, it encourages the flow of movement between the values so either or both can be expressed, depending on what the situation demands.

COMPLEMENTARY VALUES

The two options involved in a dilemma the potential values—are complementary. The more we do one, the more we need to do the other. Reconciliation involves understanding the circularity of the relationship between values.

Imagine what would happen to the relationship between Karen and Jenny if they reframed their values in ways that still indicated their individual preferences, but showed an appreciation for both parts of the dilemma. Karen might move from thinking “I’m a Feeler” to “Before making a decision, I like to test ideas by experiencing how they affect my emotions.” By reframing her image of herself in this way, Karen recognizes that if she exercises her capacity for feeling, she can improve the quality of her own and others’ thinking. And improving the quality of thinking has a positive impact on the emotional environment in which she works.

Jenny might move from the stance “I’m a Thinker” to “I prefer to articulate thoughts in ways that enable people to examine and express their feelings and opinions.” Jenny recognizes that her capacity for thinking enables her to invite others to express their feelings in productive ways. Doing so stimulates and challenges her to increase the quality of her thinking.

In this way, while Karen and Jenny retain their own preferences, they can design a way of working together that they both find satisfying. Imagine we were to watch them at work. While they were getting used to this new way of framing their values, we might see rather deliberate shifts between thinking and feeling. They might verbalize the need to move from one mode of operation to another:, “Perhaps we should generate some new thoughts based on what we’ve heard” or “Let’s take some time to check out our feelings about what’s been said.”

Over time, Jenny and Karen would likely become more skilled at managing the movement between thoughts and emotions. We would observe a fluidity in their work together, with each bringing feelings and thoughts into play as required. When they have truly reconciled the dilemma, we would be hard pressed to classify aspects of their work as expressions of one or other of the original values.

Many of the challenges we face are socially complex: The people affected are diverse and the array of values is wide. Each situation might involve several pairs of opposing values. As we learn to honor all the values pertinent to a dilemma, we increase our capacity for acting in ways that are sustainable within the system. But what behaviors help us to reconcile values?

Changing Patterns

A number of techniques can give you insight into the dynamics of the differences you encounter. These can prompt you to look at conflict in new ways.

Be Aware. A key to achieving reconciliation is awareness of one’s own thinking and behavior. Schismogenesis can seem normal in an environment in which people are rewarded for living at the extreme of one value. A community may reward those members who are “ideologically pure,” focused on one value to the exclusion of all others. But personal, organizational, and social health require the reconciliation of a range of values. If you concentrate your effort around just one value, you are likely going to mobilize people with other values to become more extreme in their opposition to you. Schismogenesis is fueled by unconscious actions; becoming aware of your actions is the basis for reconciliation.

Look for the Whole. People become polarized when they can see only the good in what they value and only the evil in the values of those who oppose them. As we have discussed, values arise because of dilemmas, and in a dilemma, both options offer something attractive. It follows that there will also be a downside to any value. If a person pursues a value in a single-minded way, then he or she is neglecting a complementary value, and undesirable consequences will likely follow. Practice seeing the whole picture by noticing the gains to be made by pursuing each value represented in a dilemma. Then list the disadvantages of each: what will be lost if you pursue each of the values to an extreme.

SEQUENCE OF ACTIONS

This causal loop diagram shows how you might move through a sequence of actions that give priority to one value and then another, and so on. In this case, reflection improves our actions, and actions provide new data for reflection.

Bring Values to the Surface.Values often lie hidden beneath the surface, making reconciliation difficult. In a meeting, participants may arrive ready to advocate for the action they believe needs to be taken, based on their underlying values. They will likely push for a variety of actions, and some will be diametrically opposed to others. By asking questions such as “What will we gain from that action?” and “What is it you are interested in?” the group begins to see the values behind the different activities. In addition, teams often make progress by (a) noticing the various actions being advocated, (b) noticing the interests behind each of the actions, (c) consciously scrapping the actions first suggested, and (d) asking “What new action could we design that would address the values that are important to us all?”

Practice Sequencing. Reconciliation involves seeing the relationships between complementary values. We want to create a fluid movement between different ways of acting. To see how this movement might take place, create causal loop diagrams that express how you might move through a sequence of actions that give priority to one value and then another, then back to the original and so on (see “Sequence of Actions”). Practice your sequencing skills on the common dilemmas shown in “Common Dilemmas.”

The Journey of Dilemmas

Imagine we could go forward in time to revisit Karen and Jenny, who have worked hard to reconcile the collision between different personal styles that was such a challenge to their working relationship. What will we find? Having dealt with this challenge, will they have freed themselves from all dilemmas? Will conflict be a thing of the past?

Hardly. A dilemma can arise around any difference. Karen and Jenny are unique individuals; they differ from one another in myriad ways. Expressiveness and objectivity were the most prominent differences at the time we became interested in their story. When they resolve that dilemma, new ones will surface. Their work is dynamic, too. It keeps changing, throwing up new situations that bring new dilemmas to the surface. We could say that Karen and Jenny —  both individually and in their relationship — are on a journey in which they regularly encounter opportunities to learn from dilemmas.

Does this mean that Dilemma Theory offers nothing but a legacy of ongoing conflict and frustration? No. It doesn’t produce a constant stream of challenges and problems; life does that. And for Karen and Jenny, the outcome is not bleak. Insight into the dynamics of dilemmas has enabled them to view their differences as opportunities to learn, both collectively and individually.

As a result, they no longer have to treat their differences as something to be feared. They have learned that, with careful attention, they can reconcile their dilemmas. They have developed a practice of “thoughtful sensitivity” (or “sensitive thoughtfulness”) that can help them face new challenges. And they appreciate each other’s contribution, knowing that they complement one another in important ways.

When you encounter differences, be resolved to seek ways in which you and others can reconcile apparently conflicting values.

At an individual level, both Jenny and Karen are now able to suspend their values, observing how these influence their reactions and attitudes. Each has gained a deep insight into who she is, an insight she can take with her into her relationships with other people. Each has a greater repertoire for thinking and acting, no longer limited by an unconscious preference. Both are thankful they have learned from the mutual relevance of difference.

When you encounter differences, be resolved to seek ways in which you and others can reconcile apparently conflicting values. Building your capacity in this vital area is the basis for both successful collaboration with others and ongoing development while on your own learning journey.

Phil Ramsey teaches organizational learning at Massey University in New Zealand. He is a regular presenter at Systems Thinking in Action® Conferences and is the author of the Billibonk series of systems stories, published by Pegasus Communications.

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We can learn how to recognize and work more effectively with these dynamics by applying systems thinking to:

1. Illuminate the often non-obvious interdependencies among multiple elements that create such problems,
2. Increase awareness of how people unwittingly undermine their own efforts to achieve their stated aims, and
3. Point to high-leverage solutions that benefit the system as a whole.

This article briefly introduces several principles for analyzing the root causes of complex problems; applies them to gain a deeper understanding of the current financial crisis; and recommends high-leverage actions that political and business leaders can take to improve economic performance in sustainable ways.

The Instability of Reinforcing Feedback

The performance of a complex system is largely determined by interdependencies among its elements, many of which are indirect, circular, and non-obvious. Perhaps the most salient of these relationships is reinforcing feedback, which explains the dynamics of both exponential growth and spiraling decline. Such phenomena as compound interest that dramatically increases savings over time and engines of business success that fuel expansion are familiar illustrations of positive exponential processes. On the other hand, vicious cycles such as epidemics and economic collapse are indicative of negative reinforcing feedback.

In order to understand the current financial crisis, we first need to recognize that the same engines that stimulate exponential growth can also lead to sudden collapse. Economic bubbles tend to burst, and bull markets can suddenly turn into bear markets. In the case of the recent housing bubble, low interest rates generated easy credit, which was amplified by new financial instruments such as credit default swaps that spread and leveraged investor risk. Easy access to mortgage money increased housing prices — until higher adjustable mortgage rates kicked in and led to mortgage defaults and foreclosures, steep declines in housing prices, the collapse of key financial companies, and the tightening of credit.

In the case of the stock market, rising credit led to increased consumer confidence and increasing stock values, which in turn created greater purchasing power and fueled more purchases and higher market values. However, the sudden loss of confidence spurred by the financial crisis and declining stock prices has now led to reduced purchasing power, belt tightening, and a widespread recession. The bear market is intensified by (1) the long-term accumulation of debt resulting from credit-driven growth, and (2) the dependence of the previous bull market on purchases of largely non-renewable consumer and military products that have undermined investments in more sustainable innovations and growth. The dynamics of reinforcing growth and collapse are summarized in “The Instability of Reinforcing Feedback.”

Two high-leverage strategies for avoiding the dependence on reinforcing feedback as an unending source of growth are:

• Anticipate and prepare to address natural limits to any growth process. This means remembering that there are no free lunches and that promises of infinite growth inevitably prove false.
• Evaluate and manage growth in relation to independently meaningful goals rather than as an end in itself. We need to understand that money can enhance the quality of our lives by making it easier to realize our aspirations and express our values, but that the single-minded pursuit of money is ultimately deadening.

Managing Unintended Consequences

Another systems principle is that most quick fixes have unintended and delayed consequences that usually neutralize or reverse immediate gains over time. In the case of the current financial crisis, the bailout not only risks significant complications in years to come, but has also led to negative unintended consequences in the short term. First, the bailout has not achieved its immediate aims of opening credit markets or increasing consumer confidence, because banks have largely held onto the money to ensure their own solvency. Second, the resulting increase in the federal deficit, which will be compounded down the line by looming increases in Social Security and Medicare payments, will likely create significant tax increases that reduce purchasing power even further. A higher federal deficit will also generate inflation that reduces purchasing power and increases interest rates, thereby further limiting people’s ability to borrow as a way to stimulate growth.

One higher-leverage way to shift these dynamics is to address the root causes of the financial industry collapse instead of just its symptoms, i.e., prevent foreclosures by restructuring the mortgages of people at risk, and change the financial rules of the game (including incentives and instruments) that led to the collapse in the first place.

The performance of human systems is significantly affected by people’s deeply held beliefs and intentions. With regard to our economic system, many political and business leaders believe that growth measured primarily in financial terms is inherently good and that the ultimate goal of the system is to increase it. This belief results in high pressure for growth, which our country has tended to achieve by stimulating borrowing instead of savings (at the individual, corporate, and national levels) as the basis for investment, and encouraging spending, especially on consumer products and a strong military. For example, consumer spending has been spurred by low interest rates, and military spending has been increased to combat terrorism. The consequences of these strategies include increased deficits (again at all levels) and relatively low investment in renewable resources such as education, research and development, preventive healthcare, and alternative energy.

In order to reduce the high costs of an economic paradigm based primarily on financial growth, we need to shift to a new paradigm designed to achieve sustainable development. This entails:

• Reallocating federal spending and redesigning tax incentives to develop renewable resources such as people and alternative energy.
• Stimulating consumer and business spending based more on interest earned from savings than on interest paid for loans. One way to encourage savings is to gradually shift the tax structure toward reducing income taxes — because earned income tends to generate economic value — while increasing sales taxes (with credits for low-income families) — because consumption often destroys value.

This kind of economic stimulus package can reduce the federal deficit in the short term by decreasing mortgage defaults and thereby strengthening the financial industry. The deficit would decline in the long term due to changing policies that reduce lending risk and increase savings, and by the higher tax revenues generated from a more sustainable economy. These strategies for meeting the financial crisis and redesigning how we approach our economy are shown in “Framework for a New Economy.”

Facilitating Continuous Learning

s In addition, there are several other applications of systems principles that can help political and business leaders make wiser decisions about how to respond to the current economic crisis:

• Because most actions have both unintended and intended consequences, decision makers should always ask themselves what might be the accidental impacts of the solutions they propose before acting. Congress attempted to do so in challenging the bailout, but the fear of further immediate financial collapse resulted in Congressional approval without adequate oversight of how the money would actually be spent.
• Since unexpected outcomes are so common, processes for learning and correction should be built into all decisions. For example, since the bailout has done little to restore the economy so far and many people question its underlying rationale, policy makers and analysts should deeply question the reasons for the shortcomings and make adjustments as needed.
• Most actors in a human system unwittingly create or contribute to the very problems they are trying to solve. This means that as part of the learning about the bailout, decision makers must question their own responsibility for the problem rather than blame other stakeholders for what happened.
• Changes in complex systems often require significant time and patience to take hold. Therefore, any short-term learning and correction needs to be carefully judged against a theory of change that explicitly takes time delays into account.

In summary, systems thinking can support decision makers to increase both the short- and long-term effectiveness of their decisions. The current financial crisis offers an opportunity to alter previous policies and transform the way we develop our economy.

David Peter Stroh is a principal with Bridgeway Partners (www.bridgewaypartners.com) and a founding director of Applied Systems Thinking (www.appliedsystemsthinking.com). His areas of expertise—developed over a 30-year career consulting with private, public, and non-profit organizations around the world—include applying systems thinking to facilitate organizational and societal change, visionary planning, and leadership development.

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According to the dictionary, trust has essentially two meanings:

• To have confidence in someone, or
• To expect/hope/suppose that someone will act or something will happen.

In the workplace, we need to consider this distinction. For me, real trust is about the first definition — the belief in a person’s ability to perform a specific task under specific circumstances. It is a positive statement about the relationship between two people:, “I believe you are capable of [taking some action].” This form of trust implies interdependence and is crucial to the development of a healthy relationship.

The second meaning connotes obligation:, “I expect that you will [take some action].” As such, it implies dependence in the relationship. This attitude blocks the development of an equal partnership, where both parties can feel fully valued. Unfortunately, this latter definition of trust is all too prevalent in many organizations.

We Are in This Together

Why is real trust so important? Studies have shown that it improves task effectiveness, because it reduces the need for people to check up on each other. Great teamwork requires real trust because members need to feel confident that their coworkers are fulfilling their commitments as they work interdependently toward the same aim. In relationships based on the first definition of trust, people feel relaxed and can communicate openly; these factors boost individual and group enthusiasm for joint undertakings. Lack of real trust increases anxiety, diverts attention from the task, stifles innovation, and drains energy.

But real trust can be difficult to achieve. All too often, we see people as assets or things that are ultimately replaceable. We forget that others have aspirations and needs, and, given the opportunity, want to do their best at work. We fail to acknowledge that the individuals who design, operate, and manage our organizations are key to our mutual success.

Dynamics of Trust and Control

When an organization fails to achieve the desired performance, managers have a choice (see “Trust and Control”). They can set in place mechanisms designed to reduce the performance gap — procedures, scripts, checks, and measures that assess and constrain performance. Or they can trust their staff and colleagues and support them by having a clear common purpose, coaching and encouraging them, and engendering a collaborative learning culture.

Command Loop. One option for addressing the performance gap is to introduce control, setting in motion the Command loop. At first, the control may take a supportive form. Common, standardized practices can help everyone behave consistently and successfully. Managers usually introduce control with this positive intent, believing that if the implementation is well managed and aligned to a common purpose, then everything should be okay.

The problem occurs when managers see control mechanisms as the means to minimize performance gaps and use them more and more frequently. They rely less on coaching and open discussion for learning and fine-tuning performance, falling back instead on policing mechanisms designed to ensure compliance with rules.

TRUST AND CONTROL

In the Command loops, managers address a performance gap by instilling control mechanisms and standardized practices. This approach works in the short term, but over time, workers’ level of commitment falls and further undermines performance. In the Nurturing loops, real trust builds on itself, leading to improved performance.

Inherent within the Command loop is the second definition of trust — “I trust that you will…,” meaning “I expect you to adhere to these rules/standards.” These requirements do not constitute real trust in someone; they are about compliance with a directive.

Yet people are not machines. As Maslow documented more than a half century ago, we all have a basic need for fulfillment and involvement. To command performance in a work environment may have been successful when commanders held the lives of workers or slaves in their hands. Today, workers have a totally different set of rights and expectations. People typically respond to being told what to do by digging in their heels or complying with reduced self-motivation. Both responses are saying, “If you don’t trust me, then why should I bother?”

If you’ve never experienced this dynamic, believe me, you don’t want to. It can be debilitating for any team or organization. Compliance costs people and companies money, mental energy, and time. When the use of control mechanisms escalates, it undermines individual and team performance and leads to a pervasive lack of trust.

When this happens, the challenge becomes more than just addressing the performance gap; it involves addressing increasing numbers of employee issues. Employees behave in ways that may not conform with their supervisors’ wishes as they seek to rationalize the rules with their own needs and understanding of what will work. They may lack motivation or commitment, as demonstrated by increased absenteeism; they may become obsessive and emotionally volatile, rejecting all outside input; or they may become politicized, seeking allegiances and undermining perceived threats to their survival.

Suppliers, customers, and other third parties readily pick up on the lack of trust. The organization probably uses the command loop with them, too. No doubt it seemed like a good, or at least an expeditious, idea at the time!

Once lost, real trust can be hard to rekindle. In a control culture, if people’s performance isn’t what managers want it to be, then managers ironically put additional controls in place. But, as Evert Gummesson states in Total Relationship Marketing (Butterworth-Heinemann, 1999), “Trust cannot be assured through contracts.”

Nurturing Loop. The other option is to address the performance gap through the Nurturing loop. Here, real trust allows for open communication when a problem occurs. Healthy relationships and open communication enable people to work together to proactively learn how to address the gap efficiently and effectively. Basic guidelines and protocols provide consistency and help people avoid illegalities. However, any control mechanisms should be minimal, designed with the involvement of the relevant operational teams.

For the Nurturing loop to succeed, the organization must have a clear, explicit common purpose to which all goals and decisions are aligned. This provides a coherent message and environment with which people can engage and to which they can contribute positively. Everyone is explicitly going in the same direction. Trusting appropriately recruited people to meet the agreed performance goals breeds a positive, supportive team environment and serves as a basis for success.

People may lack a common purpose because none exists in the organization, or because it’s not clearly communicated. Humans are goal-oriented beings. We need something to justify our actions and from which to derive self-worth and a sense of identity. Without a common purpose to work toward, we create our own goals or ask colleagues and friends until we find one that makes sense for us.

As a result, most people in the organization have different goals and act in disparate ways. When different parts of the organization try to achieve different things, tension builds. Managers then put more controls in place. In these circumstances, it can be hard to establish a common purpose, as people may have been working to their own strongly defined goals for some time and will be wary of the new initiative.

Solutions

If you find yourself in a control culture, take heart; there are things that you can do.

1. Understand why the situation is as it is, identify the difference that will make a difference, and leverage change for the better. Finding out about the situation helps to inform you of the underlying dynamics:
   • What and who is sustaining, or benefiting from, the distrust?
   • Who is predisposed and motivated to address it?
   • What sense of “we’re in this together” exists?
   • Where is the leadership?
   • What do people feel they need to move forward?

   Once you’ve identified the dynamics; the players and their goals, motivators, and beliefs; and people’s openness to change and desire to get involved, then you can start to plan your approach to reinstate real trust. The aim is to decide on the most efficacious route to break the patterns in a sustainable way. This can be difficult; organizations driven by red-tape, procedures, and protocols are usually plagued by inertia, providing an extra challenge to change.

2. Stop the cycle of distrust and find ways as a group to rebuild positive relationships.
3. Get a commitment from top leaders to follow through on a program of re-engagement and realignment in the organization.
4. As an individual, define your own overarching goal. Work to nurture and protect your team as you build support for your approach with colleagues and senior managers. All the time, you must align your actions and decisions to your goal, even if you don’t explicitly refer to it. If people are used to following controls, you may even have to create new, aligned procedures and processes until you are able to dismantle the old ones.

Some organizations are so deeply entrenched in the cycle of distrust that one person alone won’t be able to make much of a difference. In that case, you have two choices. First, you can accept the ways things are, do your 9 to 5, and enjoy life. If you work in a large organization full of inertia, you’ll be okay for a while. At some point, you’re likely to become deadwood in the eyes of colleagues. At that point, you either should move on or take another stab at implementing change.

The second choice is to find somewhere else to work. You’ll feel good and will leave on a positive note, looking forward to the next part of your life.

Conclusion

Tom Peters speaks of trust as being the “single most important contributor to the maintenance of human relationships. And for business, it can, quite simply, mean the difference between success and failure.” Relationships are about achieving more together than we could on our own. If problems occur, the most fruitful approach is to work with people to resolve them, based on trust, open communication, and proactive learning. For once you start putting in systems of control that force or constrain behaviors, you will be on the slippery slope toward lower performance and a dysfunctional organization.

David Newport (david@effectivevision.co.uk) is an NLP Practitioner and ergonomist, with a background in qualitative research and operations direction. He works with people and organizations to help them understand the behavioral traits and dynamics that impact both their customer experience and bottom line.

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I strongly believe that stock and flow diagrams offer a deeper understanding of a system than do causal loop diagrams. Nevertheless, in the past, I found it difficult to get more than a small handful of clients to develop the facility to build them. Despite its obvious benefits, the rigor of the stock and flow language comes at a price—it is more difficult to learn. While companies that create simulation software have made enormous advances in their products, vastly simplifying the model-building process, we still have a long way to go in learning how to help people develop the facility to create even simple models.

High Performance Systems, the creators of the ithink® software, have stuck firmly to their belief that a true understanding of the dynamics of any system requires an appreciation of the underlying stock and flow structure. For that reason, their software does not provide the facility to build CLDs. The best they offer are “Loop Pads,” which they describe as “. . . simple pictures that identify the cause and effect processes that work to generate dynamic behavior patterns.” To display these pictures, you have to build the stock and flow model first.

The challenge is to find more effective ways of helping clients develop an understanding of the structural dynamics of the system they are studying, while acknowledging that they usually find CLDs an easier place to start than stock and flow diagrams. To that end, I have developed an approach to model building that uses ithink in a slightly unorthodox way to start clients at a relatively easy place and move them quickly to a more sophisticated understanding of a given system using stocks and flows. Paradoxically, this technique capitalizes on the software’s unwillingness to let users draw CLDs.

From Feedback Loops . . .

To follow this process, you must use version 6.0 of the ithink software, which allows you to minimize the size of the converter icon. Start by changing the defaults to set the converters to small. Doing so lets you use the converters as you would the variables in a CLD. Then use the text box facility, which is one of the objects on the menu bar, to create the polarity signs (, “+” or “-,” which correspond to “s” and “o”). For example:

So far so good. Up to this point, we are simply building a CLD in which “resources allocated to process improvement” are influenced by current “performance” and “desired performance.” However, when we try to create a causal link between “resources allocated to process improvement” and “process errors,” an error message appears indicating that such an action would create a circular connection.

The nature of the mathematics that underlies the stock and flow language means that the software is unable to calculate the value of any converter or flow when they loop back on themselves. As the help files state: “In drawing connector linkages, you may encounter an alert which tells you that circular connections are not allowed. Mechanically, this alert means that you have attempted to create a chain of converters or flows, such that one converter or flow ultimately depends upon itself. The software cannot resolve the resultant simultaneous equations.”

. . . to Stocks and Flows

To get past this barrier, we must create at least one stock somewhere in the loop. This process forces us to look more closely at the structure of the loop we are creating and identify one or more stocks. Every feedback loop has an accumulation—it is this accumulation that generates the feedback dynamics. In this example, the issue for the team was how actual performance levels drove “resource allocation to process improvement.” With this in mind, we can now make a simple modification to the CLD by converting the variable “performance” into a stock.

We are now a step closer to gaining a deeper understanding of the feedback processes involved in this structure. We have done so, however, by beginning with a process that clients are familiar and comfortable with and then moving to a structural understanding through one simple step. How we develop the model from this point forward depends on your goals. We could stay with this loop and simply develop the stock and flow structure for each variable.

Going into Greater Detail

We also might want to explore a certain part of the structure in greater detail. For example, we might be interested in the dynamics involved in a process-improvement program. In this case, the team realized that the resource allocation decisions were not only determined by actual performance but by the gap between actual and desired performance:

On the other hand, we may want to develop a loop to explore the impact of process quality. One possibility could be:

Once again, when we try to close the loop by connecting “investing in process quality” with “process quality,” we will receive an error message that circular connections are not allowed. How we respond to this message depends on what we are trying to understand with the model. If we want to examine the financial implications in more detail, we could begin to unravel the structure underlying the variable called “profits.” For example:

The key point is that we always anchor the model development process in something the client is familiar and comfortable with—the development of CLDs. We then force the software to highlight a logical error to provide a stepping stone to unfolding the stock and flow structure. I have found that, using this technique, more clients are able to develop an ability to create their own stock and flow models than before. Prior to using this approach, I found that clients viewed CLDs and stock and flow diagrams as separate and distinct languages. Since I’ve implemented this process, I have noticed that they have begun to see the similarities, rather than the differences, between the two. As a result people are less mystified when working with stocks and flows, seeing them embedded in the feedback loops of CLDs.

David Rees is the director of High Performance Learning Systems, a consultancy firm specializing in applying systems thinking principles and tools in public and private sector organizations. He is also a research fellow at the Centre for the Design of Innovative Systems at UNITEC in Auckland, New Zealand.

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In the face of day-to-day pressures, groups often leap to solutions after only a modest amount of brainstorming. A systemic approach, however, provides a structured problem-solving process for digging deeper into our most vexing problems.

To get a sense for how systems thinking can be used for problem identification, problem solving, and solution testing, we have outlined a six-step process. To use this process on a problem in your workplace, try the worksheet on page 9.

1. Tell the Story

The starting point for a systems thinking analysis is to get your head above water enough to start thinking about the problem instead of just acting on it. An effective way to do this is to gather together all of the important players in the situation and have each one describe the problem from his or her point of view.

At Bijou Bottling Company, the problem was usually a customer complaint: “Where were the 40 cases of 2-litre Baseball tie-in product that were ordered last week?!” Somehow Bijou would get the goods there on time, whatever it took—including air shipping heavy soda in glass bottles at enormous costs. But this crisis management led to a culture where people built their careers on coming in at the 11th hour and turning around a customer complaint.

2. Draw “Behavior Over Time” Graphs

In the storytelling stage, most of the energy is focused on the pressures of the current moment. When we move to “Behavior Over Time” (BOT) graphs, however, we begin to connect the present to the past and move from seeing events to recognizing patterns over time.

Draw only one variable per graph on a Post-it note so it can be easily moved around in the steps that follow. The time frame should span from past up to the present—but it can also include future projections (see “Bijou Over Time”).

3. Create a Focusing Statement

At this point, you want to create a statement that will help channel energy during the rest of the process. This statement may involve a picture of what people want, or a question about why certain problems are occurring. At Bijou, for example, the focusing statement was: “We’re pretty good at solving each problem as it arises. But why are these problems recurring with greater frequency and intensity? What is causing them?”

BIJOU OVER TIME

At Bijou, crisis management efforts had increased over time, while the effectiveness of the production/distribution system had decreased.

4. Identify the Structure

You now want to describe the systemic structures that are creating the behavior patterns you identified. The systems archetypes are an easy way to begin building a theory of why and how things are happening (see “Systems Archetypes at a Glance,” V22N6, August 2011).

Begin by reviewing the story, graphs, and focusing statement to see if they follow the storyline of an archetype. If so, draw the loop diagram for that archetype, place the Post-its of the variables in the diagram, and move them around on a flip chart until you have a diagram that seems to capture what is going on.

The group at Bijou decided that their problem matched the “Shifting the Burden” storyline, in which a problem is “solved” by applying a short-term solution that takes attention away from more fundamental improvements. They identified a balancing loop that described how customer problems were solved with heroic “11th-Hour” efforts (the symptomatic solution) at the expense of improvement and redesign of the production/distribution system (the fundamental solution). As people “learned” over time that heroism is rewarded, their willingness and ability to address system-wide problems decreased (see “Shifting the Burden to Heroism”).

SHIFTING THE BURDEN TO HEROISM

At Bijou, customer problems were solved with heroic “11th-Hour” efforts (B1) rather than with improvements in the production/distribution system (B2). Over time, people at Bijou “learned” that heroism is rewarded, which reduced their willingness and ability to address system-wide problems and increased the company’s dependence on heroic efforts (R3). One negative side-effect of Bijou’s “heroism” attitude was that customers were taking problem situations and escalating them to crises in order to get the company’s attention (B4).

5. Going Deeper into the Issues

Once you have a reasonably good theory of what is happening, it is time to take a deeper look at the underlying issues in order to move from understanding to action. There are four areas you should clarify:

• Purpose of the System. Ask yourself, “In the larger context, what do we really want here?”
• Mental Models. Begin the exploration of mental models by adding “thought bubbles” to those links in the diagram that represent choices being made (see “Mental Models and Systems Thinking: Going Deeper into Systemic Issues,” V23N5, June/July 2012).
• The Larger System. Add links and loops to enrich the story and connect the relationships to the larger system.
• Personal Role. Acknowledge and clarify your own role in the situation.

For example, when the people at Bijou looked at the larger system, they wondered what role their customers played in the system. They theorized that customers were taking problem situations and escalating them into crises in order to get the company’s attention (B4).

6. Plan an Intervention

When planning an intervention, use your knowledge of the system to design a solution that will structurally change it to produce the results you want. This might take the form of adding a new link or loop that will produce desirable behavior, breaking a link or loop that produces undesirable behavior, or a combination of the two. The most powerful interventions often involve changing the thinking of the people involved in the system.

At Bijou, the key to change was realizing that the problems were largely self-inflicted. They realized that they had to make progress on production/distribution system improvements while still doing enough fire-fighting to keep things afloat. In the longer term, they would need to change the reward systems that promoted heroic behavior. They also recognized the need to sustain the improvement efforts even when the pressure came off—otherwise the problems would be back again soon.

Part of a Cycle

Even as systems thinkers, it is easy to fall back into a linear process. But learning is a cycle—not a once-through process with a beginning and an end. Once you have designed and tested an intervention, it is time to shift into the active side of the learning cycle. This process includes taking action, seeing the results, and then coming back to examine the outcomes from a systemic perspective.

Michael Goodman is an internationally recognized speaker, author, and practitioner in the fields of systems thinking, organizational learning and change, and leadership.

Richard Karash is a founding trustee of the Society for Organizational Learning, a founding member of the SoL Coaching Community of Practice, and a co-creator of “Coaching from a Systems Perspective.”

Editorial support for this article was provided by Colleen Lannon.

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The plan won state funding, and a new executive director supported by a multi-sector board began steering implementation. Service providers who had previously worked independently and competed for foundation and public monies came together in new ways. One dramatic example was that they all voted unanimously to reallocate HUD funding from one service provider’s transitional housing program to a permanent supportive housing program run by another provider. Jennifer Schrand, who chaired the planning process and is currently Manager of Outreach and Development for Legal Services of South Central Michigan, observed, “I learned the difference between changing a particular system and leading systemic change.”

Calhoun County has done a remarkable job of securing permanent housing for the homeless, especially in the face of the economic downturn. For example, in the plan’s first three years of operation from 2007-2009, homelessness decreased by 13% (from 1,658 to 1,437), and eviction rates declined by 3%, despite a 70% increase in unemployment and 15% increase in bankruptcy filings. Readers can follow the ongoing progress of the initiative at the Coordinating Council of Calhoun County website.

Why was this intervention so successful when many other attempts to improve the quality of people’s lives fall short? For example, urban renewal programs of the 1960s were backed by good intentions and significant funding, yet they failed to produce the changes envisioned for them. Moreover, the programs often made living conditions worse – leading to outcomes such as abandoned public housing projects and increased unemployment that resulted from what appeared to be successful job training programs (see Jay W. Forrester, Urban Dynamics, 1969).

Stories of well-intentioned yet counterproductive solutions abound, as we learn that food aid can lead to increased starvation by undermining local agriculture, and drug busts can cause a rise in drug-related crime by reducing the availability and increasing the price of the diminished street supply. In other cases, short-term successes frequently fail to be sustained, and the problem mysteriously reappears. We see this dynamic when civic leaders invest in programs to reduce urban youth crime only to have the crime rate subsequently rise, or when international donors fund the drilling of wells in African villages to improve access to potable water, with the result that the wells eventually break down and villagers are unable to fix them.

By applying a systems thinking-based approach, the project to end homelessness managed to overcome the pitfalls of these other initiatives. The partners combined two significant interventions:

1. a proactive community development effort that engaged leaders in various sectors along with homeless people themselves, and
2. a systems diagnosis that enabled all stakeholders to agree on a shared picture of why homelessness persists and where the leverage exists in ending it.

In other words, the approach combined more conventional processes that facilitate acting systemically with tools to help the stakeholders transcend their immediate self-interests by thinking systemically as well.

Likewise, a comprehensive initiative to improve food and fitness – and in the process address childhood obesity – illustrates how the application of systems thinking can help organizations make better decisions about how to use their limited resources for highest sustainable impact (much of the first part of this article was adapted from David Peter Stroh, “Leveraging Grant-Making: Understanding the Dynamics of Complex Social Systems,” Foundation Review, Vol. 1, No. 3).

The Non-Obvious Nature of Complex Systems

Lewis Thomas, the award-winning medical essayist, observed, “When you are confronted by any complex social system… with things about it that you’re dissatisfied with and anxious to fix, you cannot just step in and set about fixing with much hope of helping. This is one of the sore discouragements of our time” (The Medusa and the Snail: More Notes of a Biology Watcher, 1979). The stories above about failed interventions epitomize this poignant insight. They share other specific characteristics:

• The solutions that were implemented seemed obvious at the time and in fact often helped achieve the desired results in the short term. For example, it is natural to provide shelter, even temporary, for people who are homeless.
• In the long term, the intervention neutralized short-term gains or even made things worse. For example, the temporary shelters provided by Calhoun County led to the ironic consequence of reducing the visibility of its homeless population, which diminished community pressure to solve the problem permanently.
• The negative consequences of these solutions were unintentional; everyone did the best they could with what they knew at the time.
• When the problem recurs, people fail to see their responsibility for the recurrence and blame others for the failure.

How can the interactions over time among elements in a complex system transform the best of intentions into such disappointing results? The reason lies in part in our tendency to apply linear thinking to complex, nonlinear problems. Systems and linear thinking differ in several important respects, as shown in “Distinguishing Linear Thinking from Systems Thinking.”

For instance, a linear approach to starvation might lead donors to assume that sending food aid solves the problem. However, thinking about it in a systemic way would raise concerns about such unintended consequences as depressed local food prices that deter local agricultural development and leave a country even more vulnerable to food shortages in the future. From a systemic view, temporary food aid only exacerbates the problem in the long run unless it is coupled with supports for local agriculture.

Systems vs. Linear Thinking

Because the problems addressed by many organizations are exceedingly complex, one step they can take to increase the social return on their investments is to think systemically (vs. linearly). Implementing a systems approach involves the following process:

1. Building a strong foundation for change by engaging multiple stakeholders to identify an initial vision and picture of current reality
2. Engaging stakeholders to explain their often competing views of why a chronic, complex problem persists despite people’s best efforts to solve it
3. Integrating the diverse perspectives into a map that provides a more complete picture of the system and root causes of the problem
4. Supporting people to see how their well-intended efforts to solve the problem often make the problem worse
5. Committing to a compelling vision of the future and supportive strategies that can lead to sustainable, system-wide change

Based on the insight that non-obvious system dynamics often seduce us into doing what is expedient but ultimately ineffective, the Food and Fitness (F&F) initiative of the W. K. Kellogg Foundation (WKKF) followed these steps in taking a comprehensive systems approach to planning, implementing, and evaluating the program. Initial planning began in 2004, and the first work with systems thinking in the field started in 2007. Implementation continues today in nine communities throughout the U. S.

F&F began as a response to staff and board member concerns about the rising rate of childhood obesity and early onset of related diseases such as type 2 diabetes. The WKKF program officers who initially led F&F, Linda Jo Doctor and Gail Imig, knew that many well-intentioned programs had attempted to address childhood obesity by focusing on nutrition, education, or exercise. Some targeted policy change, whereas others focused on individual behavior, but data clearly showed undesirable outcomes continuing, especially among children from poor families.

WKKF had long supported developing a healthy, safe food supply and increasing consumption of good food. Because the issue was highly complex and prior efforts to address it had been unsuccessful, the program officers determined that a systemic approach would be essential to achieving long-term goals. They believed that applying this kind of process to F&F would increase the likelihood of engaging a diverse group of people and organizations, fostering collaboration and finding innovative strategies to change the underlying systems, and thereby creating and sustaining the healthy results everyone seeks for children and families.

Applying Systems Thinking to Program Planning

Of the three major programming functions – planning, implementation, and evaluation – systems thinking can play an especially important role in improving planning. Here are suggestions for how to integrate these steps into the program planning process.

Step 1: Build a Foundation for Change

Building a strong foundation for systemic change involves engaging diverse stakeholders in the planning stage. This is a cornerstone of the F&F initiative. WKKF developed its knowledge base by bringing together researchers and theorists from around the country in fields such as public health, nutrition, exercise physiology, education, behavior change, child development, social change, and social marketing. The foundation also assembled a group of community thought leaders for a conversation about the current realities in their communities, as well as their visions for communities that would support the health of vulnerable children and families. In addition, WKKF engaged with other foundations throughout the U. S. in conversations about their collective thinking on childhood obesity and the roles foundations might play. From all of this outreach, a collective vision for the initiative began to emerge—not as a reaction to the immediate circumstances, but from an enriched understanding of current realities, as well as deeply shared aspirations for the future:

We envision vibrant communities where everyone – especially the most vulnerable children – has equitable access to affordable, healthy, locally grown food, and safe and inviting places for physical activity and play.

Step 2: Engage Stakeholders to Explain Often Competing Views

Building on the results of Step 1 above, systems mapping is one tool to help stakeholders see how their efforts are connected and where their views differ. This tool extends the more familiar approaches of sociograms or network maps to show not only who is related to whom, but also how their different assessments of what is important interact.

F&F’s conversation among community thought leaders was structured using the systems thinking iceberg model. Examples of questions included, “What is happening now regarding the health and fitness of children in your communities that has been capturing your attention?” “What are some patterns related to health and fitness of children that you’re noticing?” “What policies, community or societal structures, and systems in your communities do you believe are creating the patterns and events you’ve been noticing?” “What beliefs and assumptions that people hold are getting in the way of children’s health and fitness?” This conversation ended with the question, “What is the future for supporting the health of children and their parents that you truly care about creating in your community?”

Initially, each participant’s comments reflected his or her own work and the competition for resources that typically accompanies community engagement. Some believed the lack of mandated daily physical education caused childhood obesity. Others faulted school lunches. Some hoped parents would prepare more meals at home rather than eating out. Several blamed the rise of fast-food establishments. In the ensuing conversation, participants began to consider one another’s thinking. They came to realize that no single explanation, including their own, could fully explain the health outcomes they saw. The conversation revealed different perspectives and experiences but also began aligning participants around common beliefs and a deeper, broader understanding of the issue.

Step 3: Integrate Diverse Perspectives

Systems maps integrate diverse perspectives into a picture of the system and provide an understanding of a problem’s root causes. Participants in F&F came to see that the obesity epidemic in children was the result of national, state, and local systems failing to support healthy living, rather than a consequence of accumulated individual behaviors. They began to recognize the interrelationships among systems such as the food system, the quality of food in schools and neighborhoods, the natural and built environment and its role in supporting active living, safety, and public policy such as zoning. They also started to understand how individual organizations’ good intentions and actions could actually undermine one another’s efforts. These conversations paved the way for collaboratively creating strategies and tactics in later phases of the work.

Step 4: Support Responsibility for Unintended Consequences

One characteristic of social systems is that people often unintentionally contribute to the very problems they want to solve. Systems thinking enabled communities working in the F&F initiative to uncover potential unintended consequences of their efforts.

For example, marketing the concept of eating locally grown food without developing a food system that can provide it can lead to increased prices for that food, putting it out of reach for schools, children, and families in low-income communities and thus decreasing the consumption of good food among that population. Pushing for policies to allow open space to be used for community gardens could have the unintended consequence of reducing access to outdoor areas for children to play and be active.

If people understand how they contribute to a problem, they have more control over solving it. Raising awareness of responsibility without invoking blame and defensiveness takes skill – yet it is well worth the effort.

Step 5: Commit to a Compelling Vision and Develop Strategies
Once a foundation for change has been developed and the collective understanding of current reality has deepened, the last planning step is to affirm a compelling vision of the future and design strategies that can lead to sustainable, system-wide change. This step entails

1. committing to a compelling vision,
2. developing and articulating a theory of change,
3. linking investments to an integrated theory of change, and
4. planning for a funding stream over time that mirrors and facilitates a natural pattern of exponential growth (for details about each of these processes, see David Peter Stroh and Kathleen Zurcher, “Leveraging Grant-Making—Part 2: Aligning Programmatic Approaches with Complex System Dynamics,” Foundation Review, Vol. 1, No.4).

The systems approach to this work resulted in unanticipated positive consequences. Developing relationships, engaging in high-quality conversations, and committing to a common vision during the planning phase produced immediate results in many of the communities. In Northeast Iowa, Luther College, the public school district in Decorah, and the city council created a proposed community recreation plan under which Luther College would grant a no-cost lease on 50 acres of land for a citywide sports center and would raise the money to build an indoor aquatic center; the city would build soccer and tennis courts; and the school district would raise money for maintenance. Documenting these results during each phase of work is critical to maintaining momentum and funding for long-term system change.

A Pause on the Quick Fix

Our continued work in applying systems thinking to social change in such areas as homelessness, early childhood development, K-12 education, and public health affirms the importance of integrating approaches for acting and thinking systemically. Many people have become familiar with tools such as stakeholder mapping and community building, and methodologies for getting the whole system in the room to bring together the range of interests and resources vital to social change. These are positive steps toward overcoming the pitfalls of the failed interventions referenced at the beginning of the article.

However, unless we drastically shift the way we think, bringing diverse stakeholders together all too often fails to surface or reconcile the differences between people’s espoused (and sincere) commitment to serving the most vulnerable members of society and the equally if not more powerful competing commitment to optimizing their individual contributions and maintaining their current practices. For example, shelter directors want to end homelessness, but they actually get paid according to the number of beds they fill each night. Donors want to end homelessness, but their benefactors get more immediate satisfaction from housing people temporarily. Service providers who specialize in helping the homeless may find themselves competing for funds that might otherwise be allocated toward prevention.

As one nonprofit noted, the greatest challenge in creating social change can be mustering the courage to ask different kinds of questions, such as, “What is our organization willing to give up in order for the system as a whole to succeed?” Thinking systemically helps people answer that question in a way that serves their higher intentions. It does so by enabling them to see the differences between the short and long-term impacts of their actions, and the unintended consequences of their actions, on not only other stakeholders but also themselves. The result might be that one shelter director decides to close his facility, while another reinvents her organization to focus on helping the homeless build bridges toward the safe, permanent, affordable, and supportive housing they ultimately need to heal. The net outcome is that people act in service of the whole because it naturally follows their thinking about how the whole behaves.

Ann Mansfield, co-director of the F&F program in Northeast Iowa, summarized the benefit of using systems thinking: “The tools helped us put a pause on the quick fix.” Systems thinking provides frameworks and tools that can enhance organizations’ efforts to achieve lasting systems change results by making a few key coordinated changes over time. By following the five-step change process for achieving sustainable, system-wide improvement as spelled out in this article, we can increase the chances that our interventions will have the results we fervently desire.

David Peter Stroh, Master’s Degree, City Planning, was a founding partner of Innovation Associates. He is currently a principal with Bridgeway Partners, an organizational consulting firm dedicated to supporting social change through the application of organizational learning disciplines. dstroh@bridgewaypartners.com

Kathleen A. Zurcher, PhD, Educational Psychology, partners with communities and organizations to achieve their desired future by applying and building capabilities in organizational learning and systems thinking. In 2008 she retired from WKKF. She was previously a senior administrator for Family Medicine, and a faculty member in the University of Minnesota’s extension service and at Lehigh University. kzurcher33@gmail.com

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A causal loop diagram consists of four basic elements: the variables, the links between them, the signs on the links (which show how the variables are interconnected), and the sign of the loop (which shows what type of behavior the system will produce). By representing a problem or issue from a causal perspective, you can become more aware of the structural forces that produce puzzling behavior.

By linking together several loops, you can create a concise story about a particular problem or issue.

Take the example of an HR team that has been responsible for integrating a Total Quality approach in an organization. In the beginning, there was much enthusiasm around the program, and demand for training was high. There were also some well-publicized successes in several local line teams. But over time, the TQM programs seemed to produce diminishing results, and interest in TQM activities slacked. What happened?

1. Create Variable Names

The first step in creating a causal “story” is to identify the nouns—or variables—that are important to the issue. Remember, a variable is something that can vary over time. In the TQM example, “TQM Activities” and demand for TQM Training” are important elements of the story. Upon further conversation, the team also agreed that the “Perceived Threat” of the new program was an important element, as was the “Resistance by Middle Managers” and their willingness to change.

2. Draw the Links

Once you have identified the variables, the next step is to fill in the “verbs,” by linking the variables together and determining how one variable affects the other. In the language of systems thinking, links are labeled with either an “s” or an “o.”

If variable B moves in the same direction as variable A, the link from variable A to B would be labeled with an “s”(or “+”). In the TQM story, the team noticed that in the beginning, TQM activities generated demand for TQM training—as activities went up, training went up (indicated by an “s” link). Similarly, as training increased, it generated even more TQM activities—another “s” link.

However, as TQM activities increased, the perceived threat of these activities also increased (another “s” link), which led to resistance by middle managers (another “s” link).

If variable B changes in a direction opposite of A (i.e., as A increases, B decreases), the link from A to B should be labeled with an “o” (or “-“). For example, the HR team noticed that, as the resistance by middle managers increased, the number of TQM activities decreased, which would be indicated by an “o.”

At this point, the causal “story” consists of two causal loops that are linked through the common variable “TQM Activities.”

3. Label the Loop

Once you have completed all of the links in the loop, you want to determine what type of behavior it will produce. In systems thinking, there are two basic types of causal loops: reinforcing and balancing. In a reinforcing loop, change in one direction is compounded by more change. For example, money in a savings account generates interest, which increases the balance in the savings account and earns more interest.

Balancing loops, in contrast, counter change in one direction with change in the opposite direction. Balancing processes attempt to bring things to a desired state and keep them there, much as a thermostat regulates the temperature in a house. For example, when we are hungry, our body sends a signal to our brain that it’s time to eat, which appeases the hunger.

To determine if a loop is reinforcing or balancing, one quick method is to count the number of “o’s.” If there are an even number of “o’s” (or none are present), the loop is reinforcing. If there are an odd number of “o’s,” it is a balancing loop. You should always double-check this method by walking through the loop to make sure the links are labeled correctly. In the TQM story, the “TQM Training” loop (which has two “s” links) is a reinforcing loop (labeled with an “R”), while the “Resistance by Middle Managers” loop (which has one “o” link) describes a balancing process that seeks to “balance” the growth in TQM activities (labeled with a “B”).

TIP: Another way to double-check the expected type of loop is to draw the behavior of the system over time. A reinforcing loop shows exponential growth (or decay); a balancing loop tends to produce oscillation or movement toward equilibrium.

4. Talk Through the Loop

Once you have completed the causal loop diagram, it is wise to walk through the loops and “tell the story,” to be sure the loops capture the behavior being described. In the TQM example, the loops tell the following story: “Initial TQM activities led to an increase in TQM training, which led to more TQM activities throughout the company. However, as the number of activities increased, the perceived threat also increased, which led to increased resistance by middle managers, and a decrease in overall TQM activities.”

Storytelling

By using causal loop diagrams to create stories about complex issues, we can make our understanding of the interrelationships within a system’s structure more explicit. The resulting diagrams also provide a visual representation that can be used to communicate that understanding with others. With practice, we can become more adept at telling systems stories that help us recognize the multiple, interdependent effects of our actions.

Colleen P. Lannon is co-founder of Pegasus Communications, Inc.

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Yet just as much research suggests that there is a gap—and, in all probability, a growing gap—between what most organizations would like their HR departments to deliver and what they actually get. A recent Economist Intelligence Unit/KPMG survey into the future of HR confirms this growing chasm.

Dave Ulrich, one of the best known HR experts, has described this credibility gap in simple terms. He sees HR as the function that “offers the greatest promise but consistently underperforms in reality.” That view appears to be supported by business leaders recently surveyed by KPMG. When asked about the role of HR within strategy creation, the CEO of a global retailer told us:

When the marketing director comes to the executive board meetings, he presents data on our consumers, and we are given enormous insight about their buying habits, their aspirations, their concerns, and their hopes. We have clear demographic data, and we can predict with real accuracy how patterns will evolve. But when HR presents information about our employees, it is less precise, less concise, less insightful, and less predictive.

Needless to say, attitudes like this do not cheer HR professionals. You only have to pick up an HR journal to see an editorial, letter, column, or feature article commenting on the lack of status or credibility of the HR profession. Articles such as “Why We Hate HR,” “What’s Wrong with HR?” and “Does HR Have a Future?”
all point to a crisis of confidence.

This lack of strategic status is not just an issue for beleaguered HR professionals, however. It is a striking fact that very few companies—even those that claim their people are of great importance to them—provide a chair at the main boardroom table for their Human Resources director. This oversight—if it is one—ensures that HR continues to play a service role rather than contribute to company strategy and leaves employees as an afterthought in decision making and planning processes. And when frontline employees fail to factor into strategy in important ways, a company’s performance is bound to suffer.

It is a striking fact that very few companies—even those that claim their people are of great importance to them— provide a chair at the main boardroom table for their Human Resources director.

The Generic Best Practices Trap

Can this situation change? I think so, but first HR at the macro level has to break out of the trap that it finds itself in. Ultimately, we believe that HR could and should occupy a central role in determining the strategic direction of any business and should be as instrumental in promoting business growth as the finance and marketing functions.

But what of this trap?

Anyone familiar with the systems thinking archetypes (repeating patterns of behavior in teams, businesses, or society) should recognize the “Shifting the Burden” pattern evident within many HR teams. Quite simply, the problem and the trap in which HR finds itself is that the function believes that it lacks credibility and is unable to deliver value. In an effort to rectify this problem, the team pursues symptomatic fixes in the form of the latest generic best practice models (see “Shifting the Burden to HR Fads”).

The net result is a diversion of attention away from where the real value lies—in implementing solutions tailored to the unique circumstances and requirements of the given business. By relying on generic HR practices, the team actually diminishes its level of strategic involvement and influence, leading it to look for additional quick fixes.

SHIFTING THE BURDEN TO HR FADS

This “Shifting the Burden” dynamic explains the Human Resources function over the last 15 years and the need to turn away from the pursuit of generic best practice and toward a situation-specific, value-driving model of HR.

That’s the doom loop—the vicious cycle from which HR finds it difficult to break free. The team undermines its own success by favoring a trendy generic solution over a unique one. Because of the widespread adoption of standardized models in HR departments across industries, if you looked at a random selection of HR teams, you would see more similarities than differences. But how can an HR team that supports a business whose unique selling point is based around product innovation be so similar to a team supporting a business based around operational excellence, for example? They shouldn’t be so similar, as they should both be uniquely configured to drive value within their companies.

A New Vision

In writing this piece, I was struck by Daniel Kim’s article “Shifting the Burden: Moving Beyond a Reactive Orientation,” in which he talks about how both quick fixes and fundamental solutions are reactive approaches. He goes on to argue for developing a vision, which is more proactive and creates a context within which the fundamental solution can be deployed. The fundamental solution must also be underpinned by new, relevant core competences. Otherwise, Kim argues, what seems to be a fundamental solution will inevitably lead to a new set of problems.

This insight suggests that, for HR to create a new, more sustainable future, HR professionals need to reexamine and reposition the function’s purpose and develop and deploy new core competencies. Within any given company, the HR department must configure itself to be highly tailored and situationally specific to its organization’s strategic and business challenges. Rather than hunting for best practices and generic models, the team will therefore invest time in crafting a more idiosyncratic approach. This shift must be supported by a facility for insightfully translating the business value chain and strategy into a compelling, evidence-based, and values-driven people agenda.

Breaking the Doom Loop

This may simply sound like a debate around dominant HR ideologies, but survey results show that, if things don’t change, HR may die a rather agonizing death. A majority (70%) of the respondents to our recent survey predict that the HR function will increasingly be consolidated into a General Business Services organization. The result would likely be that HR’s transactional activities would be integrated into back-office operations, overseen by a Chief Administrative Officer. The remaining team of “people agenda architects” might report to a Chief Change Officer. In that scenario, HR as we know it would no longer exist. Some businesses could go further still and have top leaders take direct charge of the shape of the people architecture themselves, supplemented at the strategic level by nothing more than external consulting support.

I leave it to the reader to decide here what is desirable and what is undesirable. However, the fact remains that HR as a profession is reaching the point where it needs to consciously try to break clear of this doom loop, if not by better tailoring its offerings to meet the needs of each individual organization then through some other means.

Another 15 years of pursuing generic best practices in the vain hope that they will provide rewards won’t help anyone. The answer is deceptively simple: configure HR for unique value creation suited to the strategy, markets, customers, value chain, and sources of competitive advantage for your company. For some, this might mean that HR becomes a driver of innovation; for others, a builder of lean thinking and practices; and in still other organizations, a facilitator in increasing employee engagement so that the company creates market-leading customer experiences. It certainly does not mean a rush to the latest fad or fashion around talent management, workforce analytics, competences, global careers, or any other of the things that currently capture headlines and conference airtime.

Robert Bolton (Robert. Bolton@kpmg.co.uk) is a partner in KPMG’s People and Change Practice. He leads the Global HR Transformation Centre of Excellence.

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