Systemic Potential

Potential sets the limits to what is possible within system substantial environment – the number and kinds of future options available based on its stated purpose and mission.

There are two types of potential;

  • System Potential based on defined System Capabilities, its Governance framework and available Resource (CGR) as defined with the System Architecture baseline.
  • Systemic potential is not constrained by system capabilities or resource and defines future options of systemic potential.

System Potential CGR is also known as system baseline potential (potentiality) where system performance is measured constrained by current resource capacity and capability.

From a governance perspective, the governors of the system should determine total possible systemic potential via scenario planning and team synergy which may consist of different options based on stated purposes and mission or totally transformed purpose and mission within know and future system (short terms 5 years by extrapolating the past to guessing the future ) of what is possible. Understanding what is possible within system entails understanding current entities and their mid to log term progression of these entities considering technological trends.

Eventually governors should identify preferred options and define for the each systemic potential associated variable; quantifiable and qualitative variables.

Systemic Potential is addressed via systemic scenario planning which has key objective to anticipate change, prepare a response and create more robust strategies of possible future potential. Key value of systemic scenario planning is that it allows governors to learn from mistakes and provides confidence for future scenario planning effort. Effective systemic scenario planning involves aspects of system thinking, cybernetics governance, team synergy and adaptive cycles:

  • System Thinking

Within systemic scenario analysis there is recognition that many factors may combine in complex ways to create sometime surprising futures (due to non-linear feedback loops). The method also allows the inclusion of factors that are difficult to formalize, such as novel insights about the future (intelligence) , deep shifts in values, unprecedented regulations or inventions (technological innovation trends) . Systems thinking used in conjunction with scenario planning leads to plausible scenario storylines because the causal relationship between factors can be demonstrated and validated.

  • Cybernetics Governance

Cybernetics is a way of thinking that recognizes the ‘whole’ system exhibits emergent properties that are not to be found in its parts.  These emergent properties determine system potential, viability and resilience.  Cybernetics management concerns itself how organizations maintain their identity, viability and fulfill their purpose within their environment. Viable means capable of independent existence and implies both maintaining internal stability and adaptation to a changing environment. Governance implies that organizational system shall have normative, strategic, auditing, coordinating,  operative management and alarming functions that operate and interact in order to maintain organizational viability whereby its key functions consists of implementation (delivery of products / services), co-ordination , control, intelligence and policy.

 

  • Adaptive Cycles

All systems experience dynamic adaptive cycles which are based on the properties/dimensions of the key sustainability elements and  will determine a certain system state: exploitation (rapid growth), conservation stage (system reaches carrying capacity and stabilizes), decline/ extinction and  reorganization. Each of the adaptive cycles requires adaptive governance that is able to effectively recognize the specific adaptive cycle sate (three dimensions consisting of potential, connectedness and resilience) and must tailor its governance model so that its adaptation triggers initiative that maximizes the three sustainability elements optimally.

  • Team synergy

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. Team Syntegrity (TS) is a protocol to leverage the efficacy of teamwork in solving complex problems by means of stimulating collaboration and developing cross-fertilization and creativity by exploiting collective intelligence and cognitive diversity.

Systemic potential management is not carried-out regularly but at least reviewed once every 24 months and implies:

  • Decide on the key question to be answered by the analysis.
  • Set the time and scope of the analysis.
  • Identify major stakeholder: decide who will be affected and have an interest in the possible outcomes. Identify team of participants that will participate in systemic potential scenario definition and review. Using Team Synergy approach to review systemic potential scenarios (previously defined)
  • Lesson learned from previously defined system potential scenario:
    • Realization and trends of the system potential scenario.
    • Evaluation of efficacy previously stated scenario
  • Reviewing defined current system blueprint (current system baseline) specifically key variables and performance indicators, efficiency, effectiveness achievement of goals. Determining if current system is in a crumbling paradigm.
  • Undertaking systemic scenario analysis:
    • Map basic trends and driving forces. This includes industry, economic, political, technological, legal, and societal trends. Assess to what degree these trends will affect your research question. Describe each trend, how and why it will affect the organization. In this step of the process, brainstorming is commonly used, where all trends that can be thought of are presented before they are assessed, to capture possible group thinking and tunnel vision.
    • Map basic trends and driving forces. This includes industry, economic, political, technological, legal, and societal trends. Assess to what degree these trends will affect your research question. Describe each trend, how and why it will affect the organization. In this step of the process, brainstorming is commonly used, where all trends that can be thought of are presented before they are assessed, to capture possible group thinking and tunnel vision.
    • Identify the extremes of the possible outcomes of the two driving forces and check the dimensions for consistency and plausibility. Three key points should be assessed:
      • Time frame: are the trends compatible within the time frame in question?
      • Internal consistency: do the forces describe uncertainties that can construct probable scenarios.
      • Versus the stakeholders: are any stakeholders currently in disequilibrium compared to their preferred situation, and will this evolve the scenario? Is it possible to create probable scenarios when considering the stakeholders? This is most important when creating macro-scenarios where governments, large organizations will try to influence the outcome.
    • Define the scenarios, plotting them on a grid if possible. Usually, two to four scenarios are constructed. The current situation does not need to be in the middle of the diagram (inflation may already be low), and possible scenarios may keep one (or more) of the forces relatively constant, especially if using three or more driving forces. One approach can be to create all positive elements into one scenario and all negative elements (relative to the current situation) in another scenario, then refining these. In the end, try to avoid pure best-case and worst-case scenarios. Write out the scenarios. Narrate what has happened and what the reasons can be for the proposed situation. Try to include good reasons why the changes have occurred as this helps the further analysis. Finally, give each scenario a descriptive (and catchy) name to ease later reference.
    • Assess the scenarios. Are they relevant for the goal? Are they internally consistent? Are they archetypical? Do they represent relatively stable outcome situations? Identify research needs. Based on the scenarios, assess where more information is needed. Where needed, obtain more information on the motivations of stakeholders, possible innovations that may occur in the industry and so on.
    • Defining systemic potential options, for each:
      • Purpose, mission and vision
      • Capability needs
      • Resources resource needs
      • Quantifiable variables: to help quantify consequences of the various scenarios, such as growth rate, cash flow etc
      • Risk and certainty
      • Gap between current system baseline and systemic potential options
    • Converge towards Systemic scenarios. Retrace the steps above in an iterative process until scenarios is reached which address the fundamental issues facing the organization by accessing upsides and downsides of the possible scenarios.
    • Based systemic scenarios and their respective potential identify key differences to current system baseline (system architecture baseline) , current initiatives towards potential scenarios
    • From the preferred systemic scenario document realization needs to stakeholders/shareholders :
      • Capability to be realized / Adapted
      • Resource investment
      • Training
      • Management restructuring
      • Cost estimate
      • Time frame
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