Systems thinking
Author – Grant Davis, TLC Business Improvement Manager.
Most of us have heard the phrase “people in similar systems exhibit similar behaviours”. A simple definition of a system is a grouping or integration of different functions or parts working together to achieve a common purpose. This sounds great if we are discussing this in a business context around a board room table but, how do we go from a concept to relevant application? In principle it seems simple, right? All we need to do is analyse and realign each function to your business needs. Let’s take a look at a motor vehicle as an example of an everyday system and then ask some important questions around what this means in business.
A motor vehicle as a system:
The purpose of a motor vehicle is to transport passengers from point A to point B. Initially, we may deduce that some functions are more crucial to operations than others. Yes, the more critical functions can make or break your business but more and more of today’s customers want bells, whistles and brand association more than just quality. Which means those previously considered “nice-to-haves” can also make or break your business. A motor vehicle’s purpose today is changing as the market wants more value for money where even cheaper cars also provide a great experience with all the bells and whistles, while getting from A to B. For simplicity let’s look at three categories of functions that allow a motor vehicle to achieve its purpose. Namely, Critical, Support and Luxury Functions with a few examples.
Critical and support functions are subconsciously expected by the customer. But what about the luxuries? Peter Drucker said “The purpose of a business is to create and keep a customer.” Customers own and drive the value that your business delivers. Every part of your business needs to be aligned towards creating this value for your customer. Today’s customers want a positive, meaningful experience when interacting with a business. Customers are willing to pay more for a better experience. This means that what we previously thought were luxuries are now a necessity.
Competition is increasing and adapting faster than ever before. If you are not constantly focusing on your customer and improving your products and service you will fall behind and your customers will take their business elsewhere.
So here are some applications and business challenges adapted from the well-known “6 system factors” model:
- Purpose Misalignment – Business functions working against each other pull in different directions creating friction, breakdowns, accidents and customer frustration.
- Customers – Do we know what our customers really want? Do they even know what they really want? Don’t be too proud, collaborate constantly with them, it is too “costly” to get it wrong. Now what about our internal customers? Do we know what they really want? If our internal customer needs aren’t being met, you will never be able to meet your external customers’ needs. Should internal customers not be treated with the same passion as an external customer?
- Slow Complicated Processes – Be bright, be brilliant, be gone. Customers get angry when processes are slow and arduous. Simple, easy, yet more effective processes are everything.
- Ineffective measures– Good measures drive action related to the purpose not just nice-to-know information. Do your measures enable you to see a poor experience before it happens or after you notice your sales figures have dropped?
- Ineffective rewards – Are your rewards meaningful to the business and your star performer? Good rewards foster pride and enhance the business to foster pride in your work. Monetary rewards can often drive dishonest, destructive and selfish behaviours.
- Wrong Skills – Unqualified, inexperienced staff may be unfit to drive a critical, support or luxury function leading to a poor customer experience in quality.
- Right people – like minded, ambitious, and critically thinking staff will make any business thrive. Remember you hire smart people not tell them what to do but for them to tell you what to do. Don’t fire and hire new staff to achieve this. For a start, you probably won’t find them. Implement a mechanism to grow your own staff in these areas.
Remember that the key ingredient to support these system factors is effective communication between the different business functions.
My personal challenge to you the reader: If this makes you feel uncomfortable and the task seems too big, then that’s okay. Just get started because it is serious. Business is changing and rapidly becoming human again. If you don’t take action, your future is at stake.
About the author:
Grant is based at TLC’s Head Office in South Africa and has managed high-pressure, fast-paced, highly sensitive projects in business improvement, Lean turnarounds and company mergers. He has worked at TLC for over 8 years in multiple industries assisting companies and leaders in their business improvement journey. Grant is a highly experienced trainer and facilitator. He has trained and coached Lean Six Sigma Black Belt, Green Belt, Lean and Design for Six Sigma. His industry experience includes Finance, Insurance, Banking, Manufacturing, Mining, Logistics, Oil, Aviation, Agriculture, Education, Textile, Energy and Telecommunications.
