About Systemic Governance

A viable system is any system organized in such a way as to meet the demands of surviving in a changing environment

“A system is a set of elements or parts that is coherently organized and inter-connected in a pattern or structure that produces a characteristic set of behaviors, often classified as its function or purpose.”  (Donella Meadows)

The performance of the system depends on how well the parts fit together, not how well they perform individually.wholesyst1t Thus, the best parts do not necessarily make the best whole; they have to fit together. The ‘whole’ system exhibits emergent properties that are not to be found in its parts (sub-systems). System effectiveness and efficiency which in turn influence system performance are attained  through the interaction of the sub-systems in pursuit of the purpose of the system in its environment.

A system consists of a interconnected set of elements (sub-systems) that are coherently organized and work in coordination with each other to achieve a desired goal or overall objectives of the whole (purpose) as defined by its governors (managers, leaders) via defined ‘set course’. These elements derive their strength by means of association and influence with other elements whereby collective contribution of the system is greater aggregate individual elements: this is known as systemic synergy.  Systems contain the following elements which form a complex and unified whole:

  • Elements
  • Interconnection between elements (physical flow and information)
  • Attributes (properties) to both system elements and relationships
  • System purpose and sub-systems functions

Systems are everywhere—for example: the R&D department, the human body, F1 racing team, automotive manufacturer, economic and political systems. Ecological systems and human social systems are living systems oriented towards system purpose; human-made systems such as manufacturing plant or Information technology architecture are nonliving systems which are oriented towards system function. Systems can also be made up of sub-systems that that can either have function or purpose.

A sustainable system is any system organized in such a way as to meet the demands of a changing environment and achieve is stated goal in time.

Resilience is the capacity of a system to absorb disturbance and reorganize while undergoing change so as to still retain essentially the same function, structure, identity, and feedbacks. Adaptability is the capacity of actors in a system to influence resilience.

Resilience is not just about doing the right things; but rather the right things to do (of what to what) considering internal and external conditions; system trajectory and stability landscape. Doing the right things does not imply success; they might even trigger side effects that create further damage of reduce system performance.

Adaptability is the capacity of system to influence resilience, restore potential and mange disturbances considering diversity, system leadership, regimes, dynamics balance and scales.

While transformability is the capacity to create a fundamentally new system when ecological, economic, or social (including political) conditions make the existing system untenable (Paradigm Shift).

A system needs to be continuously governed; steered, adapted and transformed in order to be sustainable, survive (viable), grow and achieve its goals.

It is fundamental when undertaking systemic transformation to avoid costly mistakes that can be detrimental to viability and sustainability.

System failure does not stem from cause and effect relationship but from pathology of the system as a whole. If the individual or their organization is incapable of associating effects with their causes, then learning and adaptation is not possible and both will go on repeating the same error. System governance is a continuous cycle due to systemic external and internal conditions requiring effective adaptation.

system gov cycle

According to Doerner (cf Doerner 1992) six classes mistake people are prone to make  in coping with and intervening in complex systems:

  • Class I: The perception and description of system objective is too narrow. It is imperative to clearly define the system  in order to understand the system and its emerging behaviour
  • Class II: The situation analysis of a system focuses on quantitative data and static aspects  without considering dynamics and causal relationship. Systemic transformation requires thorough system architecture  and dynamic analysis
  • Class III: Intervention in a complex system irreversibly focuses on single favorite aspect. This can be overcome by means of relevant transparent teams to address problems and adaptation adopting Team Synergy to filter-out bias
  • Class IV: Blindness of side effects. This can be overcome by adopting Causal Loop diagrams to identify cause and effect relationship and more important identify emerging patterns of behavior.
  • Class V: The intervention is a complex system are first to weak and then too strong. System dynamics modelling can be used to evaluate efficacy of intervention. Systemic cockpit is also fundamental to evaluate systemic systemic state, achievements of its goals and via feedback its efficacy.
  • Class VI : The intervention in complex system is dominated by authoritative behavior that overestimates level of understanding of the system. This can be overcome by means of adopting Viable System Model as a governance approach for design and diagnosis furthermore Team Syntegrity tend to diminish authoritative behavior.

About System Steering and Governance

Purpose of this blog is to provide overview of systems, problems with system, how to govern system and provide indication for effective adaptation. There is ample evidence that the rights things sometime generally do not work or provide intended outcome, they create more damage or side effects impacting performance. Generally system governors (managers, politicians, economist) fail to do the right things or fail to understand ‘from what to what’: therefore what are the right things to do considering system state and environmental conditions . Most governors fail to achieve basic system objective; to maximize potential with current resources.

The difficulty of System adaptation and governance

Generally systems are difficult to manage due their complexity and rapidity changing environment.

Adaptation, innovation and transformation are extremely difficult to manage and realize; ‘doing the rights things’. This difficulty is mainly associated with failing to understand complexity and the variety propagated by systems and too much reliance on single managers or super CEO.

Typical example of expecting too much from single person to execute major transformation relates to HP: http://www.forbes.com/sites/frederickallen/2012/03/05/why-great-innovations-fail-its-their-ecosystem/#a2e4aa6b5336. HP Carly Fiorina may be an excellent CEO but it does not imply the CEO has the ability to carry-out major transformation and successfully introduce industry paradigm. Same can be said about Steve Jobs: very successful with iPhone, tablets ect..; but it does not imply that Steve Jobs at Nokia would have made a difference.

Nokia ( https://hbr.org/2011/02/the-real-cause-of-nokias-crisi.html ) further example adaptation failure: in this case adaptation issue was not related to innovation but more related to fact that their whole governance model was based on a crumbling paradigm impacting their resilience. They failed to understand that innovation in a crumbling paradigm can only lead to failures.

Why innovation fails?

http://fortune.com/2014/10/07/innovation-failure/

“If you had to guess, what percentage of ideas for ground-breaking new products or services would you say are marketplace flops, or just never see the light of day? 50%? 80%? According to Mark Payne, it’s closer to 90%”

Why transformation fails?

The reported failure rate of large-scale change programs has hovered around 70 percent over many years.

http://www.mckinsey.com/business-functions/mckinsey-recovery-and-transformation-services/our-insights/transformation-with-a-capital-t?cid=soc-web

Accenture:  According to Gartner, “almost 90% of transformation projects miss their mark.”

According to research by McKinsey & Company, about 70% of all changes in all organizations fail.

After almost two decades of intense change from corporate reorganizations, new software systems such as ERP , and quality-improvement projects (six sigma) , the failure rate remains at 70%. Project failure not only has impact on cost but can actually result in major decline.

When changes fail, people often grow cynical impacting motivation and become afraid of their current and future security.

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