The reactions to the report by solid waste industry constituents varied widely. This mixed response convinced MN OEA leaders that, in order to decide how to move ahead, they needed to conduct a participative forum. They felt that systems thinking and related organizational learning practices could help a group of representatives from different sectors identify leverage points for change and address the social and dynamic complexity inherent in such an intricate system.

Systems thinking tools can provide a vital and sorely missed perspective on the complex matters with which our legislators grapple.

That spring, MN OEA gathered 27 participants, representing citizens, businesses, government, recycling centers, and solid waste processing industries statewide, to think together about Minnesota’s solid waste system. A Blue Ribbon Panel of legislators, industry officials, and community representatives would then recommend legislation based on this group’s suggestions. Participants were asked to be leaders and experimenters, to look beyond their familiar areas of expertise in order to understand the whole system, to adopt a view with a longer time horizon than their organization generally used, and perhaps to reach conclusions that would not necessarily be in their organizations’ best short term interests.

A Historic Opportunity

Systems thinking tools can provide a vital and sorely missed perspective on the complex matters with which our legislators grapple. Although there have been many systemic analyses of public sector issues, the challenge is to discover innovative methods for encouraging public policy making institutions to accept and implement the conclusions that arise from these analyses. At least initially, there may have to be trade offs between being right from a systemic perspective and being effective from a political standpoint.

MN OEA employed a highly participative process to help the working group come to adopt as their own the findings of the solid waste policy report. The facilitators and MNOEA did not direct the participants’work; they simply brought together a capable group of people and provided them with tools for dealing with the complexity of the issues they were asked to address. This “hands-off approach, new for public policy discussions, was a critical factor in the project’s success.

MN OEA also carefully selected participants, identifying the various sectors for representation and soliciting nominations for people “in the trenches” who really understand their industries. The agency excluded registered lobbyists to try to minimize the political element in the process. Final participants were chosen through a voting procedure, based on their potential to see beyond themselves, their knowledge, and their work ethic.

The Participative Process in Action

The process began with an introduction to systems thinking and organizational learning (see “Tools for Change” on p. 8). The facilitator also told participants how different this work would be from their previous experiences, defined the notion of respect, and made explicit expectations about respectful behaviors.

In the nine days the group met, participants engaged in the following activities:

• They used the hexagon technique (see “From Ideas to Variables” by David Kreutzer, THE SYSTEMS THINKER V8N9, November 1997) to identify issues and concerns regarding the solid waste disposal system. Writing their observations on sticky notes and posting them at the front of the room allowed participants to be fully present, incorporate emotional responses as relevant data, separate issues from the individuals who articulated them, and create a complete picture of the system.
• The participants then identified variables and learned the language of causal loops. They worked in small teams to explore the issues represented on the hexagons, using systems archetypes, free form causal looping, and stock and flow diagrams.
• They began and finished each day with a dialogue style check-in/check-out (see “Check-in, Check-out: A Tool for ‘Real’ Conversations” by Fred Kofman, THE SYSTEMS THINKER V5N4, May 1994).Through this process, each participant could voice his or her state of mind, thoughts, and concerns. Sometimes supportive, sometime divisive, check-ins/check-outs and shared luncheons were critical to building trust.
• The participants synthesized the smaller causal loop diagrams into one large causal map, making the relationships across the entire solid waste system visible at a high level.
• They developed options and strategies for moving forward. The group tested these strategies using causal loops and stocks and flows by identifying and considering the unintended side effects of proposed actions.
• Lastly, the group developed recommendations for the Blue Ribbon Panel. As they did so, they identified guiding principles for themselves as well as for the state, such as “We must protect the environment and public health,” “We must reduce waste generation,” and “We must collect better data over time.” They also employed a six-level agreement model to discern how much support each recommendation received from members.

In previous participative processes, this was the point where some participants sat back and waited to see what would happen; others, who disagreed with the majority, worked to undermine the final results; and still others voiced their distrust of the political system to carry out the suggestions. This time, all concerns were considered openly. Most participants came to realize that if they didn’t give the process their best effort, they would be contributing to the self fulfilling prophecy that real change cannot be created within the political system.

Outcomes

In the end, the group made 10 recommendations to the Blue Ribbon Panel, with some suggestions about funding sources. The final report included several causal loop diagrams for explanatory purposes. The group elected representatives to provide context for the report during the presentation to the panel. The panel unanimously accepted most of the recommendations are substantial achievement. A major reason for this consensus was that there commendations were intentionally worded at a fairly high level, with little specificity. Nonetheless, the groundwork for this level of agreement was laid during the time the working group had spent together, talking about their assumptions and concerns, from their vantage points within the system.

Interestingly, one of the group’s recommendations was that they continue to meet periodically to assess how the system has changed and whether the actions taken on the recommendations worked the way they had anticipated, and to tackle some of the more difficult issues. Participants felt it was important to build on the foundation they had created, both from the content of their work and the relationships they had established.

They also expressed cautious optimism about the ability of the political system to act on these recommendations while preserving their original intent. As the participants move forward, their exposure to and growing understanding of systemic processes and group learning tools should contribute to improving the political process.

Governmental bodies like MNOEA play a vital role in protecting vulnerable resources, and yet they face staggering levels of complexity. Ultimately, we hope to see an increasing use of these tools in the areas where they have the most value in the stewardship of our societal systems.

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The Rebuilding Process

In 1996, Schena was assigned to run Caterpillar’s Brazilian operation, located in the troubled city of Piracicaba. Up until that time, the division’s performance had been less than stellar, and Schena determined to breathe life into the organization by motivating employees to rebuild the business themselves (see R1 in “Limits on Skilled Workers”). This approach and the resulting employee engagement not only helped turn the company around, but in 1999 earned the facility a notable operational excellence certification and the country’s most prestigious quality award. Today, Caterpillar Brazil continues to be number one in the company in terms of financial returns and employee satisfaction.

However, at a certain point, Chris and his management team began to recognize that the state of the larger community could threaten the organization’s ongoing success. The urban area surrounding the factory suffered from high crime and a failing educational system. It soon became clear that the lack of skilled workers could halt the division’s upward trajectory (see B2).

LIMITS ON SKILLED WORKERS

As employees became engaged in rebuilding the division, they created high levels of success (R1). With the rise in success came the need to hire more workers. Because of problems in the surrounding community, management anticipated that, at a certain point, the availability of skilled workers would begin to decline (B2). To overcome this limit, Cat Brazil invested in programs to boost the skills of the local population and make the city appealing to workers from elsewhere.

Overcoming the Limit

To overcome this potential limit, Cat Brazil embarked on worker education and health programs, among other initiatives. In addition, the organization launched a project known as Piracicaba 2010. This effort brought together local officials, entrepreneurs, CEOs, and other community and media leaders to develop a vision and strategy to attract talented people to the city. The goal was to make Piracicaba a model of sustainable development and an excellent place to live.

Caterpillar Brazil offered its resources and strategic planning capability to jump-start the effort, and many employees enthusiastically volunteered their own time toward the effort. Within six months, the initiative was mature enough for the team to hold a town meeting to expand community participation., “By getting citizens to talk to each other regularly in the pursuit of a common goal rather than their own smaller agenda,” says Chris, “the community was able to work together to make the environment more attractive and safer. In fact, now the city not only attracts more professionals but more businesses as well.” A couple of years ago, the Brazilian government selected Piracicaba 2010 as a pilot program for the country to exemplify what needs to be done to regenerate its cities. Since 2002, Brazil’s government has granted funding to run the program, and similar projects have sprung up throughout the country.

Removing Barriers

Sustaining success means more than pushing on an organization’s growth engine; it also involves removing barriers that might impede that growth. As the Caterpillar Brazil story illustrates, the process of removing those hurdles can open up new possibilities both within and beyond the organization’s boundaries, creating an ongoing cycle of growth.

Janice Molloy is managing editor of The Systems Thinker. Kali Saposnick is publications editor at Pegasus Communications.

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At Boeing, a major aerospace company, a team leader and his R&D group recently found themselves in uncharted territory as they faced a new project. They needed to create a leadership infrastructure to bridge the learning that happens in the workplace with more structured classroom learning. The framework would span multiple organizations, missions, locations, and personnel. The temptation to leap into action was hard to resist. But the project team realized that taking the time to develop an implementation strategy would help them to be more effective in the long run. In order to do so in a systematic way, they chose to develop an Operational Strategy Map to guide their efforts.

The Operational Mapping Methodology

Developing a map of strategy isn’t a new idea. Most organizational improvement methodologies (such as total quality management, reengineering, and the balanced scorecard) recommend some form of mapping in order to facilitate understanding of an organization and its processes. All mapping methodologies have benefits as well as limitations. Because maps are necessarily a representation of reality — and not the reality itself — it’s important to choose a framework that captures the essence of the system in a way that helps the organization most effectively navigate through the unfolding strategy.

The Operational Strategy Mapping (OSM) framework synthesizes elements from three disciplines — system dynamics, skilled facilitation, and balanced scorecard—to create a process and product that can enhance the creation and implementation of organizational change efforts (see “Operational Strategy Mapping”). Using OSM, a strategic planning and implementation team clearly articulates what the strategy should accomplish, how it works, and what unintended consequences might result. In the process of developing the map, team members generate understanding of, and commitment to, the overall plan.

System Dynamics. OSM uses system dynamics mapping and its underlying paradigm of the world. System dynamics incorporates two different visual languages: causal loop diagrams and stock and flow maps. In order to quickly get up to speed on the terminology and launch into the mapping process, groups may begin with causal loop diagrams. Causal loops can be extremely useful for eliciting important interdependencies that will impact and be impacted by the strategy.

Because OSM requires exploring questions such as “How does/will it work?” the strategy team will eventually need to build stock and flow maps to generate this “operational” focus. Although doing so may initially require a little more effort than creating causal loops, the value derived from this additional effort of differentiating between conditions and activities that change those conditions will dramatically increase the rigor and quality of any strategy discussions. Using stock and flow maps, groups can look at the factors inherent in the strategy that may contribute to unintended consequences during implementation.

OPERATIONAL STRATEGY MAPPING

The Operational Strategy Mapping (OSM) framework synthesizes elements from three disciplines — system dynamics, skilled facilitation, and balanced scorecard—to create a process and product that can enhance the creation and implementation of organizational change efforts.

The paradigm of system dynamics asks us to move from thinking about our organizations in terms of one-time events and isolated functions to considering them in terms of continuous, dynamic, integrated processes. To implement OSM, a team needs to look at the strategy as something that will unfold over time, with natural ebbs and flows, and will likely require adjusting in terms of the magnitude and timing of different elements. The system dynamics approach also suggests the need to identify forces that might slow or impede implementation. It offers guidance in predicting natural delays in the system; knowing about these delays is vital to generating an effective implementation plan.

Skilled Facilitation. Skilled facilitation, based on the work of Roger Schwarz, provides the framework for the process of building OSMs. It offers tools for assessing if the appropriate stakeholders are involved, how effective the group dynamics are, and how to facilitate conversations around building and testing the usefulness of the map. Because skilled facilitation applies an explicit approach to developing shared mental models (both about the content of the project and the group’s process), it is a natural fit with the system dynamics approach to mapping.

The Balanced Scorecard. The third discipline built into the OSM methodology, Kaplan and Norton’s Balanced Scorecard (BSC), has become popular for helping businesses and public-policy organizations build and revise visual strategic “bubble maps” as part of an ongoing, iterative learning process. The BSC’s four quadrant perspective — Financial, Customer, Internal Processes, and Learning — provides a useful guide for ensuring that the strategy map covers the organization’s different facets. (Although not all OSMs cover the four quadrants, groups should be conscious about choosing to eliminate one or more quadrants from the map.) However, the stock and flow language is better able to depict how processes work than “bubble maps” and can serve as the basis for computer simulation at a point in the future if the team finds this additional step helpful.

The steps for building an OSM are the same as those described for the BSC. In their book, The Strategy Focused Organization (Harvard Business School Press, 2000), Kaplan and Norton describe strategy management as following four principles:

1. Translate the Strategy to Operational Terms
2. Align the Organization to the Strategy
3. Make Strategy Everyone’s Everyday Job
4. Make Strategy a Continual Process

As you’ll see, the distributed learning team at The Boeing Company followed these steps as they developed and used an OSM.

Building an OSM at Boeing

The Boeing Company is an organization widely distributed across geographies, business segments, and product lines; it also includes several engineering disciplines. The decision to sponsor a leadership initiative in the company reflected an understanding that, although the culture focused primarily on formal learning events, more than 80 percent of learning and leadership development occurred on the job. The “Workplace Leadership Initiative” would integrate formal and informal learning and would support participants in pursuing their individual learning agendas on their own time. In turn, employees would contribute their own content/expertise through a personalized web site and a community space that would be integrated into the leadership program’s learning experience. Putting together the various pieces of the program was a challenging opportunity. The development team decided to create an Operational Strategy Map to help them “mentally simulate” how they might execute the initiative.

Translating the Strategy to Operational Terms. The first phase of developing the OSM was to get background information on the project and develop a “strawman” map of the strategy. Getting background information usually requires phone interviews with a few stakeholders/experts. This interviewing process serves two purposes: (1) Gathering information from throughout the system of interest, and

(2) Generating understanding and commitment from the stakeholders for the process and subsequent map.

For this project, the team leader possessed the knowledge to provide enough input for the initial map.

The team leader was concerned about the following areas of execution: creating the initial workplace leadership system, generating enthusiasm among potential users, and building support among senior managers (who might not be users, but who would likely encourage or discourage the use of the system among their staff). He had several hypotheses about how the system might work, but felt that the OSM process would force him to better articulate those assumptions, integrate the team’s assumptions more effectively, test the accuracy of the combined assumptions, and ultimately communicate them to management.

Based on initial conversations, the group chose to focus the core structure of the map on the system’s end users. In this case, the core structure (often referred to as the spinal cord or main chain of the model) assumes that users can move from being Unaware of the WL (abbreviation for “Workplace Leadership System”) to being Aware of and May Use WL. (See the section labeled “Core Structure” in the diagram “A Virtuous Cycle” on p. 4.) After experiencing the Workplace Leadership System, they might become an Advocate for WL — or they might become Resistant to WL.

The stocks and flows visually represent the movement of people from one state to another. The stocks (boxes) are the accumulation of people (how many in each state at any point in time), and the flows (circles) are the processes that advance people through the various stocks. The initiative would need to carefully manage the movement from Unaware to Aware and then ensure Advocates were generated while simultaneously limiting the flow into Resistant to WL. The team spent hours further defining attributes associated with the stocks: What type of person was in each stock? Is there a better name for the stock? Is there anything missing in the main chain?

After focusing on the stocks, the team was ready to begin thinking through strategic implications by analyzing what might drive each of the flows. They quickly realized that they couldn’t directly affect the stocks — they needed to design policies directed toward the processes that move people from one state to another. The group determined that they could have a direct impact on awareness by having focus groups and other public relations-type events. People would move into the Advocates stock through word-of-mouth; their experience with the WL system would influence the level of Advocates and Resistant folks, because the more positive the experience, the faster the rate of acquiring new Advocates.

As always happens, the team identified weaknesses in the draft map’s assumptions. Foremost among these was the map’s aggregation of the learning initiative’s attributes into a single stock. The team suggested three categories of attributes: Useful Content, Features, and Ease of Use. The discussion around the development of these features was heated. Through it, the team found an appreciation for the level of precision that OSMs bring to what’s often a fuzzy process.

As a result of the conversations to improve the assumptions in the map, the team identified a virtuous cycle they wanted to set in motion. An important element of the Workplace Leadership System is users’ ability to add their own content, wisdom, and expertise—and Advocates would likely contribute the most. The greater the content that the program has to offer, the greater participants’ overall satisfaction will be (the team called this the “Wow!” effect). High levels of satisfaction in turn create more Advocates. A nice loop to get going! The team realized, however, that a limit to growth for this loop would be the ease of use. If it’s not easy to add content, then Advocates probably will not do so, making it difficult to set the cycle into motion.

The team found that the mapping process surfaced a dark side of implementation that they hadn’t consciously discussed before: the buildup of folks resistant to the initiative. At first, the group was dismayed to think about the potential for Resisters to develop in

A VIRTUOUS CYCLE

An important element of the Workplace Leadership System is users’ ability to add their own content, wisdom, and expertise. The greater the content that the program has to offer, the greater participants’ overall satisfaction will be. High levels of satisfaction in turn will create more Advocates.

the organization. But after some discussion, they realized that because they now knew the possibility existed, they could look out for it.

Further, they decided that if budding Resisters were identified early enough and were listened to, two things would happen. First, they would likely have feedback that would improve the overall system. More importantly, they might move over into the stock of Advocates. The team believed that people who cared enough to be Resisters could become strong Advocates — the energy would just be directed differently. The team referred to this as an aikido approach to resistance: Rather than push directly back against critical feedback (the natural tendency of a design team), they would redirect the energy behind the criticism — and apply it to improving the product. The team also strongly believed that the process of listening would generate Advocates.

The group developed a large wall hanging with crisp high-resolution graphics. Over the course of a couple of weeks, they used the map in their meetings and presented it to managers and other stakeholder groups within Boeing. In discussions and presentations, team members were able to walk up to the map, point directly at the area of strategy they were describing, and quickly get everyone’s reactions.

As a result of these meetings, the map was modified slightly — yet the core structure remained the same. The team found they could present the map without the aid of the project consultant. In that sense, they owned the map, its assumptions, and the implications it had for their strategy — it provided a common framework that guided their discussions.

Aligning the Organization to the Strategy. The second step in the process is to align the organization to the strategy. The team did so by using the map to develop a team project plan. They focused on the flows in the map and assigned tasks to different individuals. Although the group could have used sophisticated project planning software, for this effort they imported snapshots of map segments into Excel worksheets and added roles and responsibilities (see “The Project Plan”).

Results from the Initiative

The project is still underway, but the team has already reaped several benefits from developing the OSM. The most significant impact is that the team focused their early effort on a seven-day process to set in motion a virtuous cycle around the project. The goal of this experiment was to learn as quickly as possible about potential Advocates and Resisters. The team tested the initiative’s ease of use, features, and useful content in order to assess the “Wow!” factor, identify the number of individuals in various categories, and analyze the quality of their experience in moving to being an Advocate or a Resister.

As a result of this exploration, the team reconceptualized the project’s web interface. If they hadn’t learned from this experiment with setting a virtuous cycle in motion, they might have wasted a large portion of their 2005 budget in trying to implement a system without thoughtful consideration of Advocates and Resisters.

The team was pleased to find that the map was still valid even after the shift in emphasis. This process confirmed that the level of aggregation was sufficiently useful, that is, it allowed them to examine the implications of their implementation strategy at a high level, without becoming so specific that they needed to modify the map every time they made minor modifications to the actual program.

Making Strategy Everyone’s Everyday Job. Another result of the OSM process was that the team developed a shared language. This terminology improved the quality of conversations, because it made implicit assumptions about the strategy explicit. It created an environment for making

THE PROJECT PLAN

The team developed a project plan by focusing on the flows in the map and assigning tasks to different individuals. They imported snapshots of map segments into Excel worksheets and added roles and responsibilities.

strategy everyone’s everyday job. When people pointed to a piece of the map to describe the impact of a certain proposal, everyone understood what they were referring to. Having a shared language also had the unintended benefit of increasing camaraderie.

In most cases of strategy development, management knows the underlying assumptions, but the implementation team is left in the dark. The OSM process integrates assumptions from the entire team. The group as a whole owns the strategy, the implementation, and of course, the results. Talk about empowerment!

Another benefit of the process was that the team found it easier to be brutally honest during implementation. For example, as word of the Workplace Leadership Initiative spread during the development of the map, the team not only heard from folks with a favorable impression of the project but also from those with an unfavorable view. In other circumstances, the group might have filtered out the negative input. But because the map suggested that they pay attention to potential resisters, and that by doing so they could generate a positive trend, the team accepted the early criticism and incorporated some of the constructive comments in their implementation plan.

Making Strategy a Continual Process. As part of continual learning, the Boeing team may choose to go into more detail in some areas of the map. They are exploring the potential benefits of developing simulation models of certain aspects. Further, the group may build additional maps or revise the current one. Even so, they will continue to use the OSM they’ve developed in building and implementing strategy for months to come.

Using the Methodology in Your Organization

If you’d like to use an Operational Strategy Map to help guide your strategic planning and implementation, here are a few things we’ve learned:

• You won’t get the map perfect the first time. The process of building the map is where the learning is. Create a prototype (what we’ve called the “strawman map”) as quickly as you can. Then let the strategy development team critique, modify, and ultimately own it. The process of their owning it will make it better. Trust us!
• Identify as quickly as possible the “main chain” of the map. Use the main chain to ask questions about how the system in question works and what might be some unintended consequences of any activities.
• Focus on analyzing the major dynamics in the map. In the case described here, the team focused on the major virtuous cycle for a week. They asked questions about it, tested its usefulness and likelihood of occurrence — and in the end, they developed a whole new approach to the overall project.
• Fit the map on one page if you can. The Boeing team struggled on occasion as it tried to add nuances to the map that added complexity. The understanding generated from these incremental add-ons was usually minimal. You can always create separate maps of more detailed processes at a later date.
• Once the strawman map has been developed, modify it only in the presence of the whole team. Otherwise, you will not have the buy in needed to implement any new insights. Plus, you’ll likely miss something important when making the change.
• Develop simulation models only to the point where doing so provides an adequate return for the time and money invested. The process of simulation modeling is often a laborious one; it may take months to develop a reasonably sophisticated computer model of the strategy. The siren call of “We’ll find the answer” often tempts teams to try to develop the Mother of All Models. But this quest can become a journey of diminishing returns, in that simulation modeling may not generate enough additional insight to be worth the investment. The team in this article will develop a few small models to deepen and refine their understanding of implementation dynamics.

The OSM methodology holds potential for all organizations. The process of developing a simple, one page stock and flow map of the organization’s strategy generates strategic insight and commitment to implementation. If your organization has been struggling to execute its strategy — or even to develop a good one — you will find building an OSM useful. It’s a perfect tool to get everyone on the same page so that when you come to a fork in the road, you’ll be more likely to take the better path.

Chris Soderquist (chris.soderquist@pontifexconsulting.com) is the founder of Pontifex Consulting. He consults to organizations and communities in order to build their capacity to create and implement sustainable, high-leverage solutions to their most strategic challenges. Mark Shimada (mark.s.shimada@boeing.com) is a program manager in The Boeing Company’s Leadership Development and Functional Excellence Group. He supports his peers to accelerate business results through extraordinary leadership development programs.

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With a total of 300,000 employees, Ford operates in 50 countries around the world. It sells a huge array of products, and offers an equally widespread range of services — from financing to distributing and dealer support.

VENTURING INTO THE BADLANDS

When system and social complexity are high, the organization enters the realm of “the Badlands.”

Like any large organization, it’s also peopled by individuals who come from all walks of life — and who have the different outlooks to prove it. Engineers, accountants, human-resource folks — they all have unique backgrounds and view their work through unique perspectives. Add Ford’s various stakeholders to the mix, and you’ve got even more complexity. There are media stakeholders, shareholders, customers, the families of employees — all of them with different expectations and hopes for the company.

System and Social Complexity: “The Badlands”

Now let’s look even more deeply inside Ford to see what complexity really consists of. If you think about it, the complexity that Ford and other large organizations grapple with comes in two “flavors”: system complexity and social complexity. System complexity derives from the infrastructure of the company — the business model it uses, the way the company organizes its various functions and processes, the selection of products and services it offers. Social complexity comes from the different outlooks of the many people associated with Ford — workers, customers, families, and other stakeholders from every single country and culture that Ford operates in.

Why is it important to distinguish between these two kinds of complexity? The reason is that, if we put them on a basic graph, we get a disturbing picture of the kinds of problems that complexity can cause for an organization (see “Venturing into the Badlands”). We can think of these problems as falling into four categories:

“Tame” Problems. If an organization has low system and social complexity — for example, a mom-and-pop fruit market in a small Midwestern town — it experiences what we can think of as “tame” problems, such as figuring out when to order more inventory.

“Messy” Problems. If a company has low social complexity but high system complexity, it encounters “messy” problems. A good illustration might be the highly competitive network of tool-and-die shops in Michigan. These shops deal with intricate, precisely gauged devices that have to be delivered quickly. However, the workforce consists almost entirely of guys, all of whom root for the Detroit Lions football team — so there’s little social tension.

“Wicked” Problems. If a company has high social complexity but low system complexity, it suffers “wicked” problems. For instance, a newspaper publisher works in a relatively simple system, with clear goals and one product. However, the place is probably staffed with highly creative, culturally diverse employees — with all the accompanying differences in viewpoint and values.

The Winner: “Wicked messes,” or “The Badlands.” When an organization has high system and social complexity — like Ford and other large, globalized companies have — it enters “the Badlands.” Singer-songwriter Bruce Springsteen graphically captured that unique region in South Dakota characterized by dangerous temperature swings, ravenous carnivores, and uncertain survival in his song “Badlands.” But the area and the song also represent optimism and possibilities. More vegetation and wildlife inhabit the Badlands than anyplace else in the United States, and Springsteen’s voice and lyrics offer a sense of hope despite the song’s painful and angry chords.

What’s So Bad About the Badlands?

A company that’s operating in the Badlands faces a highly challenging brand of problems. The complexity is so extreme, and the number of interconnections among the various parts of the system so numerous, that the organization can barely control anything. Solutions take time, patience, and profound empathy on the part of everyone involved.

In Ford’s case, a number of especially daunting challenges have arisen recently. For one thing, the Firestone tires tragedy has left the entire Ford community reeling. Ford faces an immense struggle to make sure this kind of fiasco never happens again. The bonds of trust between company and supplier, and between company and customer, will take a long time to rebuild. In addition, Ford and other automotive manufacturers have come under fire not only for safety issues but also for environmental and human-rights concerns.

Clearly, Ford’s business environment keeps getting tougher. The company is held accountable for parts it buys from suppliers and for labor practices in the various parts of the world where it does business. It’s also accountable for resolving baffling patterns — for example, the demand for

All of these challenges come from a single error in thinking: the assumption that human beings can control a complex, living system like a large organization.

SUVs is rising, along with cries for environmentally friendly vehicles. The majority of Ford’s profits come from sales of SUVs; how will the company reconcile these conflicting demands? Ford’s newly launched initiative — to not only offer excellent products and services but to also make the world a better place through environmentally and socially responsible manufacturing — will probably be its toughest effort ever.

But here’s where the big lesson comes in. All of these challenges come from a single error in thinking: the assumption that human beings can control a complex, living system like a large organization. Systems thinker Meg Wheatley compares the complexity of large companies to that of the world. The world, she points out, existed for billions of years before we humans came along, but we have the nerve to think that it needs us to control it! Likewise, what makes us think that we can control a big, complex organization?

Yet attempt to control we do — often with disastrous results.

Our All-Too-Common Controls . . .

We human beings try to control the complexity of our work lives through lots of different means:

System Fixes. When we attempt to manage system complexity, we haul out a jumble of established tools and processes that seem to have worked for companies in the past. For example, we use something we blithely call “strategic planning.” Our assumption is simple: If we just write down the strategy we want to follow, and plan accordingly, everything will turn out the way we want. We even call in consultants to help us clarify our strategy — and pay them big bucks for it. The problem is that this approach to planning has long outlived its usefulness. The world has become a much more complicated place than it was back when organizations like General Motors and the MIT Sloan School of Management first devised this approach to strategy.

We also use financial analysis and reporting models that were probably invented as far back as the 1950s. These models don’t take into account all the real costs associated with doing business — such as social and environmental impacts. Nor do they recognize the value of “soft” assets, such as employee morale and commitment.

In addition, we all keep throwing the phrase “business case” around — “What’s the business case for that new HR program you want to launch?” “What’s the business case for that product modification?” In other words, what returns can we expect from a proposed change of any kind? Again, this focus on returns ignores the bigger picture: the long-term costs and benefits of the change.

Finally, we try to manage system complexity by making things as simple as possible through standardization — no matter how complicated the business is. Standardization is appropriate at times. For example, the Toyota Camry, Ford’s number-one competitor in that class of car, has just seven kinds of fuel pump applications. The Ford Taurus has more than 40! You can imagine how much simpler and cheaper it is to manufacture, sell, and service the Camry pump. But when we carry our fondness for standardization into areas of strategy — unthinkingly accepting methods and models that worked best during a simpler age — we run into trouble.

Social Fixes. Our attempts to manage social complexity get even more prickly. In many large companies, the human-resources department engineers all such efforts. HR of course deals with personnel planning, education and training, labor relations, and so forth. But in numerous companies, it spearheads change programs as well — whether to address work-life balance, professional development, conflict and communications management, or other social workplace issues. Yet as we’ll see, this realm of complexity is probably even more difficult to control than systemic complexity is.

. . . and Their Confounding Consequences

Each of the above “fixes” might gain us some positive results: We have a strategic plan to work with; we have some way of measuring certain aspects of our business; we manage to get a few employees thinking differently about important social issues. However, these improvements often prove only incremental. More important, these fixes also have unintended consequences — many of them profound enough to eclipse any gains they may have earned us.

The Price of System Fixes. As one cost of trying to control system complexity, we end up “micromanaging the metrics,” mainly because it’s the only thing we can do. This micromanaging in turn creates conflicts of interests. For example, when Ford decided to redesign one of its 40 fuel pumps to make it cheaper to build, it unwittingly pitted employees from different functions against each other. Engineering people felt pressured to reduce the design cost of the part, manufacturing staff felt compelled to shave off labor and overhead costs, and the purchasing department felt driven to find cheaper suppliers. Caught up in the crosscurrents of these conflicting objectives, none of these competing parties wanted to approve the change plan unless they got credit for its success. As you can imagine, the plan languished in people’s in-boxes as the various parties jockeyed for position as “the winner.”

Micromanaging the metrics can also create a “Tragedy of the Commons” situation — that archetypal dilemma in which all the parties in a system try to maximize their own gains, only to ruin things for everyone. For instance, at Ford (and probably at many other large companies), there’s only so much money available to support a new product or service idea. People know this, so when they build their annual budgets, they ask for the money they need for the new ideas — plus another 10 percent as a cushion (because they know the budget office would never give them what they originally asked for!). At the end of the year, everyone’s out of funds because they beefed up their budgets too much. And great, innovative ideas end up going unfunded.

The Price of Social Fixes. The biggest consequence of social fixes is probably a “Shifting the Burden” archetypal situation. Upper management, along with HR, tries to address a problem by applying a short-term, “bandage” solution rather than a longer-term, fundamental solution. The side effect of that bandage solution only makes the workforce dependent on management, thus preventing the organization from learning how to identify and implement a fundamental solution.

What does this look like in action? Usually, it takes the form of upper management’s decision to “roll out” a change initiative to address a problem. For instance, employees might be complaining about something — work-life tensions, conflicts over cultural differences, and so forth. Rather than letting people take responsibility for addressing their problems — that is, get involved in coming up with a shared solution — management force-feeds the company a new program (B1 in “Shifting the Burden to Management”). This might reduce complaints for a time, and managers might even capture a few hearts and minds. But these gains won’t stick. Worse, this approach makes employees passive, as they come to depend more and more on management to solve their problems and “take care of them.” The more dependent they become, the less able they are to feel a sense of responsibility and get involved in grappling with their problems (R3 in the diagram).

This “sheep-dip” approach to change — standardized for the masses — completely ignores employees’ true potential for making their own decisions and managing their own issues. For example, consider the difference between a company that legislates rigid work hours and one that trusts its employees to pull an all-nighter when the work demands it—and to head out to spend time with their kids

on a Friday afternoon because the work is in good shape. People can’t learn how to make these kinds of judgments wisely for themselves if their employer treats them like children.

“Sheep dipping” has another consequence as well: Because it makes employees passive, it discourages the fluid transfer of knowledge that occurs when people feel involved in and responsible for their work. Instead of looking to one another, anticipating needs, and collaborating as a team, employees have their eyes on management, waiting to be taken care of. Knowledge remains trapped in individuals’ minds and in separate functions in the organization, and the firm never leverages its true potential.

From Control to Soul

So, if we can’t control complexity, how do we go to work every day with some semblance of our sanity? Should we just give up hoping that our organizations can navigate skillfully enough through the Badlands to survive the competition and maybe even achieve their vision? What are we to do if we can’t control our work, our employees, and our organization? How can we take our organizations to places they’ve never been — scary, dangerous places, but places that also hold out opportunities for unimagined achievement?

The answer lies in one word: soul. “Soul” is a funny word. It means different things to different people, and for some it has a strong spiritual element. But in the context we’re discussing now — organizational health, values, and change — its meaning has to do with entirely new, radical perspectives on work and life.

To cross the Badlands successfully, all of us — from senior executives to middle managers to individual contributors — need to adopt these “soulful” perspectives:

Understand the system; don’t control it. As we saw above, we can’t manage, manipulate, or avoid problems in our organizations without spawning some unintended — and often undesirable — consequences. Understanding the organizational and social systems we live and work in makes us far more able to work within those systems in a healthy, successful way.

Know the relationships in the system. Understanding a system means grasping the nature of the relationships among its parts — whether those parts are business functions, individuals, external forces acting on the organization, etc. By knowing how the parts all influence each other, we can avoid taking actions that ripple through the system in ways that we never intended.

Strengthen human relationships. Success doesn’t come from dead-on metrics or a seemingly bulletproof business model; it comes from one thing only: strong, positive relationships among human beings. When you really think about it, nothing good in the world happens until people get together, talk, understand one another’s perspectives and assumptions, and work together toward a compelling goal or a vision. Even the most brilliant individual working alone can achieve only so much without connecting and collaborating with other people.

Understand others’ perspectives. This can take guts. People’s mental models — their assumptions about how the world works — derive from a complicated process of having experiences, drawing conclusions from those experiences, and then approaching their lives from those premises. Understanding where another person is “coming from” means being able to set aside our own mental models and earn enough of that other person’s trust so that he or she feels comfortable sharing those unique perspectives.

Determine what we stand for. Why do you work, really? Forget the easy answers — “I want to make money” or “I want to buy a nice house.” What lies beneath those easy answers? Around the world, people work for the same handful of profound reasons: They want their lives to have meaning, they want to create something worthwhile and wonderful, they want to see their families thrive in safe surroundings, they want to contribute to their communities, they want to leave this Earth knowing that they made it better. All these reasons define what we stand for. By clarifying what we stand for — that is, knowing in our souls why we go to work every day — we learn that we all are striving for similar and important things. That realization alone can build community and commitment a lot faster than any “rolled-out” management initiative can.

Determine our trust and our trustworthiness. Strong relationships stem from bonds of trust between people. To trust others, we have to assume the best in them — until and unless they prove themselves otherwise. But equally important, we also need to ask ourselves how trustworthy we are. We must realize that others are looking to us to prove our trustworthiness as well. By carefully and slowly building mutual trust, we create a network of robust relationships that will support us as we move forward together.

Be humble, courageous, and vulnerable. Understanding ourselves and others in ways that strengthen our relationships takes enormous courage — and a major dose of humility. It also takes a willingness to say “I don’t know” at times — something that many companies certainly don’t encourage. And finally, it takes a willingness to make ourselves vulnerable — to explain to others why we think and act the way we do, and why we value the things we value.

Find “soul heroes.” We need to keep an eye out for people whom we sense we can learn from — people who live and embody these soulful perspectives. These individuals can be colleagues, family members, friends, customers, or neighbors. If we find someone like this at work — no matter what their position — we must not be afraid to approach them, to talk with them about these questions of values, trust, and soul.

Tools for Your Badlands Backpack

So, to venture into the Badlands, we need soul — whole new ways of looking at our lives and work. But soul alone won’t get us safely through to the other side. We wouldn’t approach the real Badlands without also bringing along a backpack filled with water, food, first-aid materials, and other tools for survival and comfort. Likewise, we shouldn’t tackle the Badlands of organizational complexity without the proper tools.

These five tools are especially crucial:

Systems Thinking Tools.The field of systems thinking provides some powerful devices for understanding the systems in which we live and work, and for communicating our understanding about those systems to the other people who inhabit them. Causal loop diagrams, like the one in “Shifting the Burden to Management,” let us graphically depict our assumptions about how the system works. When we build such a diagram with others, we especially enrich that understanding, because we pull all our isolated perspectives into one shared picture. From there, we can explore possible ways to work with the system to get the results we want. These diagrams also powerfully demonstrate the folly in trying to manhandle a system: When we draw them, we can better see the long-term, undesirable consequences of our attempts to control the system.

Dialogue. The field of dialogue has grown in recent years to include specific approaches to talking with one other. For example, dialogue emphasizes patience in exploring mutual understanding and in arriving at potential solutions to problems. It also encourages us to suspend our judgments about others during verbal exchanges — that is, to temporarily hold our judgments aside in order to grasp others’ reasons for acting or thinking as they do. Dialogue lets a group tap into its collective intelligence — a powerful way of transferring and leveraging knowledge.

Ladder of Inference. This tool offers a potent way to understand why we think and respond to our world as we do. It helps us see how we construct our mental models from our life experiences — and how those mental models can ossify if we don’t keep testing them to see whether they’re still relevant. In the workplace, we all make decisions, say things, and take actions based on our mental models. By using the Ladder of Inference to examine where those models came from, we can revise them as necessary — and reap much more shared understanding with colleagues. (For information about the Ladder of Inference, see The Fifth Discipline Fieldbook published by Currency/ Doubleday).

Scenario Planning. This field has also grown in recent years. Numerous organizations, notably Royal Dutch/Shell, have used scenario planning to remarkable effect. This tool reflects the fact that we can’t control systems. Scenario planning encourages us to instead imagine a broad array of possible futures for our organization or even our entire industry — and to make the best possible arrangements we can to prepare for and benefit from those potential outcomes. This approach thus acknowledges the complexities inherent in any system; after all, there’s no way to easily determine the many different directions a system’s impact may take.

Managing by Means. New methodologies are emerging that can help us assess the true costs of running our businesses — costs to human society, to the environment, and to the business itself. And costs in the short run as well as the long run. We must grapple with these methodologies if we hope to achieve the only long-term business goal that really makes sense: business that doesn’t destroy the very means on which it depends.

Traditional change management methods build things to stick. They do not build things to last and are thus ineffective because well-intentioned people create the strategy, solution, and problem sets based on a narrow set of assumptions. To create a sustainable organization, we must work to understand the complex system dynamics of the environment and experiment with multidimensional strategies. We must also work to understand diverse social dynamics and allow multiple perspectives and behaviors to emerge. Finally, we must trust ourselves, hold true to our core convictions, and have courage, humility, and soul. In these ways, we can navigate through — and even prosper in — the most desolate and challenging of Badlands.

David Berdish is the corporate governance manager at Ford Motor Company. He is leading the development of sustainable business principles that will integrate the “triple bottom line” of economics, environmental, and societal performance and global human-rights processes. He is also supporting the organizational learning efforts at the renovation of the historic Rouge Assembly site.

The post Learning and Leading Through the Badlands appeared first on The Systems Thinker.

BCC has dominated several sectors in the consumer waste containment business. Its cans and pails are found in many, if not most, American households, offices, and factories: under the sink, in the garage, in the laundry room, in home offices, near the toilet, in the garden, by the water cooler, in the copy room, at the vending machines, in the cafeteria, next to production lines, and so on. BCC has built and maintained its competitive advantage in its solid waste business through a strategy that focuses on distribution channel management, marketing and advertising, manufacturing processes, and materials science. BCC is a major center of knowledge about the various substances that make up its products, such as plastics.

In the domain of their consumer products, BCC’s materials science managers works closely with engineers and others, throughout the company, on integrating materials science with the manufacturing process, how product ingredients support marketing, and so on. For example, BCC’s waste pails are internationally renowned for their ability to withstand “punishment.” That is, the user can mistreat them in all sorts of ways, and they don’t break (for example, throwing them on the ground and banging them against hard surfaces, putting all sorts of substances in them, and/or placing them in locations where they are exposed to extremes of heat and cold for extended periods of time). The physical strength of its products is one of BCC’s key competitive advantages.

Recently, one group of BCC’s experienced technology managers noted some disturbing trends, including:

• The materials used in the business have become more complicated and, therefore, more expensive;
• Waste management containers are beginning to be linked with information technologies in new and disruptive ways; and
• Recycling regulations are becoming ever more stringent and they are affecting the design of BCC’s

While coming from scientific and engidisciplines, these technical managers were jointly responsible for the administration of the new product development pipeline. They had become more aware the onslaught of the future when they faced a period of accentuated conflicts and tensions during a recent product launch. Addressing a long-standing customer concern, the new product incorporated a deodorizing ingredient into the production of plastics for BCC cans. Required to mesh the work of their Intellectual Licensing, Basic Research, Prototype Scale Up, Manufacturing Design, Materials Procurement, and New Product Development Program Management units in a very tight frame, the managers of these Consumer Product Technology groups (about 100 people) found that:

• They disagreed over who was supposed to do what when (role confusion), and
• They would soon need to display excellence in various scientific, manufacturing, and managerial competencies that they hadn’t even considered (staffing issues).

Although test market data indicate that the new product will be successful, this complicated innovation left feelings bruised among many members of this technical community and their managers.

Rather than accept this uncom-fortable situation as a permanent reality, on their own accord, the managers of these units took the initiative to start meeting to discuss and plan for the future. They did not want a repetition of this experience. The importance of this self directed act will be more fully discussed subsequently. At present, let us simply assert that it is unique for a group of middle managers in different technical organizations to take steps to analyze and manage a problematic situation confronting their units with neither their superiors nor their subordinates demanding that they do so.

With one member of the group, in particular, championing the effort, managers representing the Intellectual Licensing, Basic Research, Prototype Scale Up, Manufacturing Design, Materials Procurement, and Program Management units met periodically over the course of several months to address role responsibilities and technology planning. They found that conversations regarding the management of their independent processes led to a significant reduction in tension between both the managers and members of their teams. Furthermore, these discussions fostered experiments, such as the sharing of information and certain key personnel between units for the purpose of ironing out bumps that had traditionally plagued the sharing of informa-tion and materiel between functions.

The managers began to reflect seriously on the impact of prospective innovations on technology strategy and the implications of possible new directions for the staffing and structuring of their units. Specifically, they began to construct “capability matrices” projecting out 25 years. They came to feel that their own thinking about their future was being constrained by their living and working within particular frames of reference. That is, their technical disciplines, their existence within Big Can, their age, their ethnicity, the ethnocentrism of their multinationals, etc. biased them in ways that they knew they did not know how to assess. One might say that they knew that they did not know how their existing mindsets limited them. They sought assistance from a consultant to open their eyes to new possibilities and to help them articulate a long-term technology vision.

They came to feel that their own thinking about their future was being constrained by their living and working within particular frames of reference.

The Futures Workshop

With an ostensibly enthusiastic blessing from the vice presidents for the various functions represented by these managers, the technical managers approved the design of a two-day planning workshop. The objective of the workshop was to generate a broad range of ideas about the forces that might be shaping the consumer product businesses in the future and to assess the possible organizational and structural impacts of these forces on the consumer products technical community.

The workshop moved through the following steps:

• A Metaphor Exercise in which groups of participants created a visual metaphor for the future of BCC’s business. The graphic indicated the key forces on the minds of its creators as well as three key opportunities embedded in the situation and three threats or concerns. For example, one graphic showed a picture of a box that represented the traditional relationship between BCC’s Materials Basic Sciences and its Engineering organizations, with an “outside the box” concept represented by bomb bursts coming from other scientific institutions, such as universities. The notion of a paperless society was introduced into the drawing as a threat. This concern was counter-balanced with the possibility that waste containers would have a built-in bar scanner that would assess the monetary value of used electronic equipment and other household equipment via a wireless Web connection.

• The managers then built a 25-year timeline that surveyed their opinions and hunches about prospective development in six different domains (, “STEEPA” categories):

  • Societal changes
  • Technological advances
  • Economic developments
  • Environmental considerations and regulations
  • Political issues
  • Aesthetic norms

Although this was not a rigorous investigation, every member of this intellectually curious group introduced a broad range of provocative ideas into this rich and vigorous multihour discussion. Here are a few of them:

• The prospect that pick-up charges for waste haulers will rise precipitously, putting garbage services out of reach for many current customers.
• The emergence of highly sophisticated recycling services that work best with increasingly complicated waste management equipment configurations, including containers that act on their contents in some way, e.g., weighing and prepackaging metal products.
• The introduction of containers that store hazardous wastes, such as certain types of batteries and lubricants, and track their value in the recycling market through wireless internet connections that can be read out through an electronic display on the storage device.
• An explosive growth of international opportunities linked to recycling.

Using an abbreviated version of a scenario construction technique, the team ranked the trends in each of the STEEPA categories and then chose two that represented the highest impact/highest uncertainty (, “cost of capital” and “interaction with information technologies”). They then mapped out four story lines, reflecting ways in which these trends could interact. Next, they chose their “preferred organizational narrative,” i.e., the scenario they most wanted to see happen in the future and, therefore, the one that they wanted to design their organization toward.

This discussion of the kind of world they would like to live in set up a multi-hour conversation about BCC’s structure: What was the most robust technical organization these managers could envision? That is, what structure might achieve the state of innovation and productivity desired by the managers, but would also be flexible enough to respond to whatever vicissitudes BCC would face?

Each member of the team laid out his or her response to these questions, and they discovered quite a bit of commonality. One member synthesized all the ideas into an elegant graphic. This was a farreaching proposal that would change a variety of BCC’s long-standing organizational structures for the management of technology, but offered much to hope for in terms of new efficiencies and interunit collaboration.

At this point, the managers became quite excited. They realized they had developed a proposal that would change each of their units, but would also, in their opinion, secure the future of BCC’s consumer product lines to which they were very committed. Further, they felt that they were in an ideal position to pro-mote these changes, since they knew the most about the actual workings of their particular technology groups. The scene had some similarities to one where the captains who will be most affected by a phase of a military campaign generate their own action plans rather than having them dic-tated to them by generals viewing the scene from some distant, and un-informed, locale.

Managers Get a Headache

The meeting ended with the managers doing some initial planning about meeting with the vice presidents to whom they reported and discussing how to inform members of their group who had been unable to attend the meeting. Also, because of prescheduled commitments, two of the members of the group—including the champion of the entire process had to leave the workshop early, even though they very much wanted to stay. Furthermore, the group itself was undergoing personnel changes. One of its members, the director for Basic Research, was leaving the company after 20 years of service and another going on to a position in Europe.

Almost from the moment the meeting ended, the managers’ hopes began to dissipate.

The Director of Basic Research was being succeeded by a younger scientist who expressed concern during the workshop with the idea that he was going to have to advocate these changes to his superior. This was his first time meeting with the group as a whole, and he was unsure of the agenda coming in. Members of the group assured him that they would assist him in making the group’s case to his president, and he seemed comfortable with the product of the group’s work.

Things did not go as planned. In fact, almost from the moment the meeting ended, the managers’ hopes began to dissipate.

First, the timetable for their meeting with the vice presidents changed dramatically. As soon as their superiors heard that the managers had had a useful planning session, the vice presidents moved up the initial timetable for discussing the results. This conversation occurred more than two weeks earlier than anticipated. The managers had intended to spend a full day thinking through an approach to the important conversation because they realized that their ideas were highly innovative and, therefore, politically charged. They were all supporting significant change in their own work situation. They were all willing to give up something in their units in order to achieve a higher degree of integration of BCC’s technology strategy. They knew that they were going to have to convey the importance of their strategy to their superiors. The eradication of their opportunity to prepare for the meeting made this impossible. However, no one thought that the group could say “no” to the vice presidents’ request for an early briefing.

Second, both anticipated and unanticipated personnel changes took effect. The seasoned manager of Basic Research retired, and the Program Manager representative attached to the Consumer Container Business took a new job as planned. Surprisingly, the member of the group who had captured the will of the team in a particular graphic was asked to stop participating in its deliberations because he was seeking a promotion that other members of the group would influence. The replacement for the manager of Basic Research was afraid to tell his vice president about the changes the team was advocating. And a new representative of Program Management struggled to become fully acclimated to the group, both because he had little background in the Consumer Products Business and he had no real connection to the other members of the group.

The meeting with the vice presi-dents was disastrous. The managers assumed the vice presidents would recall the background of the situation. Instead, they seemed to have forgotten a great deal about what was at issue in the managers’ meeting. Thus, the presentation was experienced as abstract and erratic. Even though the managers felt they had gotten a clear signoff from their superiors regarding the purpose of the workshop, one vice president criticized them for “having gone beyond your charge”: You were supposed to be looking at staffing issues for the immediate future and the next year. What is all this stuff about 10 and 20 years from now?

Another was nearly livid in his complaint: You’ve pushed yourselves into decision-making domains that you have nothing to do with! [He went on, essentially, to assert that the managers were trying to do his job.]

After the meeting, the managers beat a hasty retreat. They reworked their material to focus on the near term. The new member from Program Management took the lead in managing the “political interface” between the managers and their superiors by asserting that the group had misunderstood and mismanaged the political nature of their relationship with their superiors and that he should be the person to repair the situation; the other members of the group accepted this definition of the situation. The new manager of Basic Research distanced himself from the group. The “synthesizer” who had crafted the graphic that was so helpful to the group stopped attending meetings and spoke with excitement about other activities. The champion of the Futures Thinking project was humiliated by the entire experience. Feeling unsupported, he began looking for options outside BCC.

Summary: This team, which made such headway in understanding the future, decided to put the project on hold

A Specific Example of a Generic Organizational Disease

Particularism provides one lens on this story. That is, one could conclude that these particular individuals made mistakes. One can almost hear the chorus of critiques:

• , “They should have waited for the personnel changes to take effect before holding the workshop.”
• , “They should have said ‘no’ to the demand for an earlier meeting with their VPs.”
• , “They should have gotten clearer up-front approval for the Workshop.”
• , “They weren’t going to get anywhere without a greater commitment from the Basic Research guy, so why did they push ahead?”

On the other hand, this story can also be seen as an illustration of an all-too commonplace system dynamic called “The Failure of Middle Integration.” The human systems theorist, Barry Oshry, offers us this perspective. Oshry’s theory is based on hundreds of simulations of organizational life focused on the way in which the systemic dynamics created by social structure affect the power and efficacy of individuals and groups. Approximately 40,000 people have participated in these programs, and they overwhelmingly report a high level of coincidence between the generalizations of Oshry’s theory and their own experience in specific organizations. Interventionists, such as organization development practitioners and line managers who use these concepts to manage change efforts, also support the validity and utility of Oshry’s ideas.

Oshry contends that the systemic forces exert predictable impacts on groups at various levels of an organi-zational hierarchy. Unseen, these forces will almost certainly limit the effectiveness of any group and, therefore, the level of satisfaction people have in being part of it.

Using the terms “Tops,”, “Bot-toms,”, “Middles,” and “Customers” to represent people who either spend most of their working lives in the strata of organizational life suggested by these terms or can be described as having that position on a particular project, Oshry oversimplifying his argument—holds that:

• At the Top of a system (or any subsystem within it), specialization will emerge as a strategy for managing information overload (e.g.,Vice Presidents for Research, Operations, Infor-mation, etc.). The consequence of over-specialization is, ultimately, competition over the strategic direction of an organization (or a subsystem) and rivalry over which particular function should have the highest organizational status and receive the lion’s share of the available resources. He refers to these Top dynamics as “turf issues.
• At the Bottom of a system, solidarity and de-differentiation become preferred strategies for dealing with the inherent vulnerability of being in a system where others make decisions that affect Bottoms without the participation of the Bottoms themselves (e.g., plant closures and changes in procurement policy). Bottoms organically unite in the face of these conditions, and they frequently resent individual members of their group who attempt to differentiate themselves from others.
• In the Middle of the system—our primary interest here individual managers are pulled away from each other, physically, mentally, and emotionally. Oshry contends that this “alienation in the middle” results from both living and working within silos (functional, geographic, business line, etc.) and having to deal with issues that Tops and Bottoms in a particular silo have with each other. In other words, members of Middle groups disperse because they are kept at a distance from each other through the dynamics of the system. The more complex, the more bureaucratic, and/or the more hierarchical the system (as with BCC), the greater the level of dispersion in the middle management ranks. Dispersed Middles have difficulty integrating. They are “disintegrated.”

There are multiple negative consequences for Middle disintegration:

• Tops in a system have more issues and problems coming at them from all sides because Middles haven’t been able to pay attention to them.
• Bottoms are made more vulnerable because a seemingly functioning Middle team is not mediating arbitrary changes in their work and their level of security.
• Customers and suppliers get mixed signals because organizational functions aren’t working well together.
• Interpersonal distance between Middles separated by organizational boundaries tends to increase when managers and supervisors have both little contact with each other and regular experiences of being disappointed by one another.
• Middles as illustrated in the BCC case always have “something better to do” than interact with each other. They can’t find time to meet. They are continually pulled away from these meetings when they do occur by “important phone calls that will just take a second” or other interruptions. Since something else other than being with each other is typically more important to individual Middles, it is easy to see why Middles may not feel very close to each other as a group.
• They are regularly being promoted, demoted, fired, or transferred without much regard to the impact of these changes on Middle groups or without much Middle input into the processes by which these decisions are made. These personnel shifts provide Middles with frequent reminders of their low power status in organizations, with all of the attendant results of such self-perceptions.

Not surprisingly, given these outcomes, Middles are frequently seen as weak, incompetent, unreliable, indecisive, and/or prickly by both their superiors and their reports. Thus, they are also seen as the most expendable if and when the time comes to cut back on personnel.

Middle Integration

Oshry proposes “Middle Integration” as an antidote to these problems. Middle Integration occurs when the managers of various subsystems consciously make an effort to mitigate the effects of organic separation by meeting regularly to identify and address issues without their subordinates or their superiors being present. Middle Integration works best when it has the enthusiastic support of the superiors to whom middle managers report. Superiors demonstrate their encouragement for Middle Integration by refraining from “messing down,” e.g., demanding to have specific information about the conversations occurring among Middles, which was not so of the Tops in the BCC case. It should be noted, however, that they did not act in a significantly different manner than most others in their position would have if presented with the same set of events. They were not “the bad guys.” In fact, given Oshry’s theory, one would predict that Tops would be (1) either unaware of the systemic and structural conditions that make turf struggles, or aware of the conditions but unable to counteract them effectively; and (2) concerned about any integrative activity by Middles that would affect the “game of power” at their level in an unpredictable and unplanned for fashion.

For Middle Integration to occur, Tops should support the independence of Middles to meet, plan, and act without having to seek constant approval from their superiors. In turn,

Operational issues have been identified earlier and handled better, and relationships among middle managers and their units became more positive.

Middles should address the legitimate need that Tops have for information about Middle Integration activities by communicating regularly with Tops and aligning their integrating activities with the agendas, needs, and per-spectives of their superiors. This sort of linking process fosters the empowerment of Middles, who are constantly threatened with being isolated in their silos, while also bolstering the long-range strategic activities of Tops.

In the BCC case, for example, the Tops might have pointed to the far-sightedness of this Middle group as a reason to lower the cost of long-term credit, which is becoming an impor-tant issue to the whole company as international competition heats up.

Oshry outlines eight levels of Middle Integration:

1. No integration: The common condition, i.e., no awareness of systemic forces that pull Middles apart and no self-generated information exchange.

2. Sharing information: The simple transfer of data about different parts of the system .

3. Working the information: Diagnosing what the system (or its sub-components) needs

4. Coordinating responses to issues identified

5. Problem solving: Addressing identified needs through self-initiated experiments.

6. Mutual coaching: Helping each other with issues faced by individual members of the group

7. Sharing best practices: Enhancing organizational learning

8. Power bloc: Uniting as a Middle team to affect organizational direction and policy.

Compared with the preceding level, each degree of integration requires a higher level of commitment between Middle group members to their team effort. And, each higher level may entail greater political risk and, therefore, each demands a higher and higher level of encouragement and understanding from the Tops of the organization. For example, the Tops in the BCC situation could have expressed appreciation for their Middles’ work on the articulation of a technology management structure even if they, the Tops, were also considering the matter. Instead of punishing them for their initiative, the Tops could have treated the work of their subordinates as a valid option for their consideration.

Many organizations, including Microsoft, Ashland Chemical, Hewlett Packard, and Union Carbide, have been experimenting extensively with Oshry’s ideas. In instances where Middle Integration has been fully implemented, the results have been quite encouraging. Senior executives have been relieved of operational responsibilities and are more able to concentrate on larger strategic questions without sacrificing organizational efficiencies. In fact, operational issues have been identified earlier and handled better, and relationships among middle managers and their units became more positive with a variety of quantitative and qualitative results.

At BCC, however, there had been little explicit support for anything like Middle Integration. These managers were working against the grain of their system. In spite of their apparent endorsements early in the process, their superiors did not welcome the inventive initiative of these Middles. Instead, they saw the Middles’ behavior as poorly organized or ill considered, at best, or, worse, as insubordinate. The middle management team thought it had a level of support for its initiative that it clearly did not have. Rather, their superiors criticized them for being late to do the job that they were supposed to do, adding to the docket of their vice presidents’ responsibilities and implicitly criticizing them by stepping in to the vice presidents’, “turf.” As soon as they met this sort of resistance, the managers returned to their typical disintegrated state.

Middle Integration and the Survival of the Fittest

The collapse of the planning effort by the technology managers of BCC’s Consumer Products Division constituted the loss of a unique opportunity for this corporation. A group of senior managers moved from hope to disappointment. In spite of the fact that the members of this group demonstrated real talent as in investigating the future, the likelihood that any of these managers would initiate (or even participate in) such an undertaking was diminished. As a result, BCC has become considerably more vulnerable to competitors who are in a position to capitalize upon vulnerabilities to which this company chose not to attend.

Clayton Christensen points out that most “disruptive technologies” (i.e., technologies that take an industry into an entirely different direction) were initially evaluated and passed over by the firms that dominated particular industries. If, 10 years from now, BCC has lost much of its dominance of the consumer products containers business to more nimble competitors, it may well be because it didn’t have the capacity to learn from this group of forward-thinking, enterprising, and integrated middle managers.

This case may also be a cautionary tale for participatory theory at a general level. Interventions that bring multiple stakeholders and all levels of an organization together for visioning and problem-solving activities rely on the belief that highly stimulating and interactive processes can transcend the boundaries and rigidities created by organizational structure. The BCC case indicates that such interventions may be short-lived, however, if they are not supported by a commitment to organizational learning activities that makes the players conscious of the forces impinging upon the systemic “space” they occupy. Without such “system sight,” highly participative, short-term interventions may, in fact, become a foundation for enduring cynicism once people are again confronted by the Real politik of organizational life.

* Under the terms of the author’s confidentiality agreement, the case data presented here were deliberately designed to camouflage the identity of the company under discussion. However, the Big Can story remains true both to the issues faced by the client company and to the actions of the men and women discussed in this article.

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