In order to get to the source of the problem, the management team convened an emergency meeting. They quickly recognized a potential “Limits to Success” situation: the marketing campaign had created a “virtuous” growth cycle, spurring sales and bringing in additional revenue, but the flood of new orders swamped the fulfillment department, leading to longer processing times and order delays (R1 in “Marketing Success and Capacity Limits”). Because they understood the dynamics of “Limits to Success,” they knew that if they didn’t solve the problem soon, it would resolve itself — customer orders would drop as news of the delivery delays spread (B2).

When the group mapped out some possible consequences of the surge in orders, they discovered some interesting dynamics that they had not anticipated. When the orders started to take longer to process, customer calls and complaints increased dramatically. The people who processed orders were also the same ones who answered customer calls. Therefore, the more calls that came in, the further behind they would get in processing orders, which would lead to more calls (R3). This vicious cycle was chewing up more and more order processing capacity.

To make matters worse, the lengthening delivery delay had sparked another vicious cycle in the form of “rush” order requests. When customers found out how long the regular orders were taking, they took advantage of the company’s special “same day rush” service. Since the company’s system was not designed to handle so many rush orders, these requests created major disruptions in both order processing and shipping, which further increased the delivery delay (R4).

By the end of the meeting, it was clear to all involved that they needed to find a way to stop the spiraling dynamics that were leading to increasingly poor performance. But where was the best place to intervene in the system? What steps should they take?

From Insight to Intervention

Although the collective insight that comes out of a diagramming process can add much value to a team process, insight alone is not enough. In order for systems thinking efforts to impact organizational performance, those insights need to be translated into action. To be effective, an intervention must be self-sustaining and self-correcting, and it must address the underlying source of problems. Below is a four-step process for using systems thinking to design effective organizational interventions.

1. Map out the Intervention

Starting with a causal loop diagram or systems archetype representation of the problem, a first step is to look at where effective interventions can break vicious cycles, connect parts of the system, or reduce delays. By explicitly mapping those interventions, you can get a better sense of their impact on the system. Some possibilities:

Break a link.

Look for ways to break the causal connection between two variables. For example, the fulfillment department could break the link between “Customer Calls and Complaint?’ and “Delay in Processing Regular Orders” by temporarily adding customer service representatives whose sole responsibility is to handle the calls (see “Possible Interventions”). This would decouple the vicious cycle of order processing and call answering and free the order fulfillment personnel to handle more orders (loops B5 and B6).

Add a link. You may find that there are parts of the system that should be communicating with each other but are actually not connected. Finding such information gaps and connecting them can help the system be more responsive to changing circumstances. For example, the management team recognized that they needed a way to balance demand for their product with their capacity to fill the orders before they fell behind. They realized that the signal from the delivery delay was arriving too late for them to successfully intervene, and that they needed to initiate capacity additions well before the marketing launch. Thus, for future efforts they should connect “Marketing Campaigns” with “Investments in Order Processing Capacity,” which would help sustain the marketing success rather than negate it (R7).

Shorten a delay. Identify the delays in the system, and map out a process for shortening them. Delays can be in the form of material or information flows, capacity expansions, or even changes in perceptions. They all add to the sluggishness of the system and can escalate minor problems into huge headaches. Addressing the delays in fulfillment capacity additions earlier in the process (as suggested above) would be a critical point of improvement.

2. Draw out the Expected Behavior

Once you have mapped out some possible interventions, the next step is to try to evaluate the impact those actions might have on the system. You first want to identify the key variables that would be affected and then ask, “If we changed the system successfully, what new patterns of behavior would we expect to see?” By drawing out the expected behavior of key factors over time, you create a reference point against which you can check the actual outcome.

Expected Behavior

By drawing out the expected behavior of key factors over time. You create a reference point against which you can check the actual outcome.

In the case of the order fulfillment department, some key statistics that would be affected by a change were the time required to process orders, the number of orders, and the delivery delay. The managers expected the delivery delay to increase steadily in the short term while they invested in additional capacity and worked on making it fully productive. Once the new capacity came on line, however, they expected the delivery delay to decrease (see “Expected Behavior”). Orders were likely to continue to drop off even as delivery times shortened, but would eventually rebound over time as word got out about the improved delivery times.

The knowledge that delivery delays would continue to increase and that orders would continue to drop for a short while provided helpful indicators that the company needed to give the intervention enough time to make an impact on the system. Mapping out the expected behavior ahead of time gave everyone involved a common picture of what the interventions were going to produce, both in the immediate moment as well as in the long term. This foresight prevented unnecessary over-corrective actions from being taken when delivery performance did not improve right away.

3. Do Controlled Experiments

Before committing to any large-scale actions, it is important to run small, relatively self-contained experiments whenever possible and to use them as learning opportunities. Such experiments can provide a low-risk way to test interventions and see if they reveal any trade-offs between short-term and long-term results or if they produce any unintended side-effects. If the situation does not allow for direct, controlled experiments — either because the system is too complex and/or the time delays are too long — it may make sense to test the interventions by developing a computer simulation model that represents the key features of the situation (see “From Causal Loop Diagrams to Computer Models,” Part I and Part II, June/July 1994 and August 1994).

For example, the model building process helped the manufacturing company managers become clearer about the interactions between their marketing and order fulfillment departments. By running various scenarios of marketing campaigns mapped with different schedules of capacity additions, the group developed greater confidence in managing the balancing act between demand and capacity.

4. Get All Stakeholders Involved

A critical requirement for the successful implementation of most intervention efforts is getting the full support and commitment of critical stakeholders. This poses a dilemma for many managers: although it may be desirable to engage all stakeholders in the process of designing an appropriate solution, it is not always feasible to do so. And yet, it can be difficult for those people who are not directly involved in the design process to be fully supportive of the proposed solution. This is where a management flight simulator can be useful. An interactive simulator can engage those stakeholders in a thinking process similar to that experienced by the original design team. By testing their assumptions in the simulator, they can come to their own appreciation of the issues involved. (see “Management Flight Simulators—Flight Training for Managers,” Part I and Part II, November 1992 and December 1992/January 1993)

Long-Term Commitment

Keep in mind that there is no one right answer to any complex situation. The best interventions are likely to be a combination of carefully planned actions that are refined over time based on feedback from the system. Using causal loop diagrams to map out your current situation and your intended interventions can help you develop more robust strategies and address your problems more systemically. But it is rarely a one-shot deal — you need to continually review the performance of the over-all system, so you can learn to intervene before problems occur.

Colleen Lannon is co-founder of Pegasus Communications and the managing editor of The Systems Thinker.

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When your systems approach has not been effective, you will feel good for a while about the change you brought about. Then, over time, you will realize nothing has changed at all. When your approach has been effective and you’ve identified a true leverage point, the hue and cry from the whole organization will confuse and scare even the most stalwart “systems thinkers” in your institution.

That’s the time to hang tough. You probably have hit upon an effective strategy for change.

At Griffin Health Services Corporation in Derby, Connecticut, our management team has been working for three years to bring about change using the principles of visionary planning and systems thinking. Griffin Health Services is a holding company with four subsidiaries: Griffin Hospital, a 262-bed community general hospital; Griffin Hospital Development Fund, responsible for all philanthropy; GH Ventures, a for-profit organization which provides a range of programs supporting Griffin Health Services; and Suburban Health Plan, a small health maintenance organization.

For us, visionary planning and its attendant development of a true organizational vision has been a rewarding experience. The systems thinking process, on the other hand, has been harder to take. When it is successful, the whole world will seem to be saying you have lost your mind.

As an internal instructor of a systems thinking and visionary planning program developed by Innovation Associates, I have described these principles to nearly 500 individuals in workshops conducted over 18 months. Yet when “worse before better” behavior resulted from a systems change, even I had difficulty soothing my wounds with the knowledge that the system was just doing what a system does when an effective leverage point has been found.

The various stakeholders in your organization may expect management to keep the place running without a lot of controversy. If so, their expectations may not be met if change is produced by finding a leverage point that really changes a system. Long before the change has had an opportunity to move from “worse” to “better,” large numbers of individuals will be saying to stop whatever it is you are doing.

Here are two examples of system interventions that have occurred at Griffin Hospital during the past two years. They demonstrate, respectively, ineffective and effective systems interventions at work.

The system pushes back

To provide sufficient patient care in the face of a growing nursing shortage, we created a new level of healthcare worker. In addition to previous nursing aide responsibilities, these new healthcare workers would be responsible for all personal patient care such as bathing; feeding, and keeping the room clean. Compensation was increased for the new responsibilities. Originally, currently employed nurses aides were trained to fill this new role. Later, we also hired individuals from outside the organization. The idea was to reapply our current manpower to provide more support to nursing and better coordinate inpatient activities.

Since the new workers would be taking over tray delivery and cleaning patient rooms, we expected that fewer employees would be needed in the dietary and housekeeping services. We also expected patients’ satisfaction to improve because of the greater personal attention being paid to them.

After a appropriate training, we initiated the program. There were some complaints by those who previously had been aides. But for the most part, the program was received well by nurses, physicians, and patients.

A year later patient satisfaction is not higher, the program has not significantly reduced the dietary and housekeeping staff, and most nurses are no longer supportive of the program. What we have accomplished, it seems, is to increase the pay of nurses aides and change their title; but they continue to do basically what they did before.

We missed the leverage point, and the system pushed back. Probably, we chose a point that was too close to the problem, rather than taking the time (which we felt we didn’t have) to look for the right leverage point: a clear case of the “better before worse” phenomenon.

No pain, no gain

To stem a chronic decline in medical-surgical admissions, the hospital board of trustees adopted several strategies to encourage an increase in the medical staff size and range of services. They included: establishing recruitment targets; eliminating the policy of setting maximum numbers for each specialty — a practice that had restricted individuals from joining the staff in the past; and appointing an acting chairperson from outside the staff to encourage and assist in the recruitment effort.

Each of these steps elicited expressions of dissatisfaction from various members of the medical staff. However, each decision had near unanimous support of trustees, including the physician representatives.

Things got interesting when, midyear into the effort, we were able to pinpoint which physicians had admissions significantly below those of the previous year, and the amount of revenue we had lost because of this volume decline.

We reported this information to the hospital and holding company governing boards and the medical staff in a newsletter. Coincidentally, the release of the information came shortly before we reduced our full-time equivalent employees by about 30 because of the reduction in medical-surgical inpatient admissions.

“When systems thinking is successful, the whole world will seem to be saying you have lost your mind.”

For almost the next six months, a few members of the medical staff made a concerted effort to question the competence, honesty, and motivation of senior management. Every conceivable arena was utilized to question previous operating decisions, capital allocations, and even the very process of utilizing visionary planning.

Board members began to be apprehensive about the previous strategic direction the organization had taken and established special ad hoc methods to review the overall organization’s direction and strategy. To some degree the evaluation continues.

Yet the commitment by a majority of stakeholders in the organization to expand the size, scope, and choice of healthcare to the community has become the highest priority. And it has made all parties willing, even eager, to support our strategies. For example, by year end we had increased the size and scope of our medical staff by adding 25 young physicians.

Things did get worse before they got better. And, for a while, all stakeholders in the organization felt worse. I believe that the leverage point that worked was a combination of two new means of communication:

1. The capability to report physician activity on an almost real-time basis. In the past, physician activity profiles were not available until about three months following the close of a fiscal year. Having current data meant that our analysis of physical activity did not depend on our ability to recall what happened months earlier.

2. The dissemination of this information, through a newly initiated newsletter, to the full medical staff and to the boards of Griffin Health Services and its subsidiaries. Having new real-time information and the willingness to act on it changed the system in a dramatic fashion.

Information intervention

Management expected the policies adopted by the board would bring about controversy. In reality, it was management’s ability to describe factually, rather than anecdotally, to the full medical staff and the boards what was happening in real time that created the controversy. But it also committed the whole organization to address the issue immediately.

It is my view that without the “information intervention,” the policies we adopted would not have led to significant additions to the medical staff.

Prior to all of these recent activities, we had tried to make our board members aware of systems thinking and the behavior of systems. However, during a “crisis” these lessons can be forgotten.

What we discovered is that all those who will be affected by a successful systems intervention must understand the principles of systems behavior and must have an opportunity to work with examples from other fields or from past organizational changes. This preparation can reverse the natural inclination to stop the intervention once problems arise and turn off the heat.

Jerold A. Sinnamon is executive vice president of Griffin Health Services Corporation. This article was condensed from the Healthcare Forum Journal March/ April 1990.

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