The performance improvement required to

reach Six-Sigma or ultraquality levels

cannot be achieved without a proper under-
standing of the concept of a system. Deming
emphasized that fact over and over, and it is at
the heart of his idea of profound knowledge.
Yet the way most managers were trained to
think implicitly ignores the system concept.
In an economy that is global in scale, and
one in which technological and product life-
cycles turn several times inside many compa-
nies decision radius (time to make a deci-
sion), it is necessary to understand three
critical and interrelated concepts: a system,
emergent properties, and complexity. We
need to explore each of these concepts:
(1) System: a set of different elements so
connected or related as to perform a
unique function not performable by the
elements alone (Rechtin and Maier,
1997).
(2) Emergent properties: those functions, attrib-
utes or behaviors, good or bad, which
would not exist except for the operation of a
system.
(3) Complexity: something that is composed
of interconnected or interwoven elements
that function as a system to produce
emergent properties.
A syst em
A system is an aggregation of elements, but not
just any aggregation will do. Several require-
ments must be met before we can call some-
thing a system. First, there must be emergent
properties, i.e. it must provide something that is
not available with the parts alone. That requires
interconnection and interrelationships.
Deming was fond of pointing out that it is
not sufcient to gather together all of the best
automobile parts in one place. That collection
does not make a system. To become a system
they must be designed to work together, or the
connections that make the system called auto-
mobile, which provides the emergent property
called transportation, will be missing and the
parts will remain a useless pile of materials.
A good system both is purposeful and has
value to some customer or user. A farm tractor
is a system similar to an automobile: it has four
wheels, engine, seat, transmission and (today)
an air-conditioner. But if you do not have to
plow a eld, and do have to transport a family
around town, then a tractor might be purpose-
ful, but does not have value to you. Lacking
either purposefulness or value renders the
system little more than an object of curiosity.
Most good systems also are feedback con-
trolled systems. In order to maintain its cur-
rent state, and improve in the future, some
54
The TQM Magazi ne
Vol ume 11 Number 1 1999 pp. 5457
MCB Uni versi t y Press ISSN 0954-478X
Techniques
What s t his syst ems
st uf f, anyhow?
H. J ames Harrington
J oseph J . Carr and
Robert P. Reid
The aut hors
H. James Harringt on i s an Int ernat i onal Qual i t y Advi sor
Pri nci pal at Ernst & Young LLP, San Jose, Cal i f orni a, USA.
Joseph J. Carr i s Seni or Syst ems Engi neer, Naval Ai r
Syst ems Command, Pat uxent Ri ver, Maryl and, USA.
Robert P. Reid i s an i nt ernat i onal l y know n i ndependent
consul t ant on organi zat i onal ef f ect i veness. He i s a ski l l ed
t eacher of TQM and many ot her rel at ed t opi cs. He i s based
at Kel l er Graduat e School and Uni versi t y of Maryl and,
USA.
Keywords
Demi ng, Syst ems devel opment , Syst ems t heory
Abst ract
Di scusses a si mpl e overvi ew of syst ems and syst ems
t heory. Descri bes w hat a syst em i s and does. Suggest s
seven pri nci pl es t o use w hen desi gni ng or eval uat i ng a
syst em i ncl udi ng t i ps such as: organi ze t o reduce compl ex-
i t y, do not over-opt i mi ze t he syst em, and l eave det ai l s of
managi ng sub-el ement s t o t he speci al i st s w ho know how.
Il l ust rat es w i t h graphi c exampl es.
form of feedback is required, but the feedback
is also a source of complexity and has both
advantages and risks.
Emergent propert ies
It is the emergent properties that give a system
life, and it is both the nature of the elements
and their interrelationships that give rise to
the emergent properties. To give rise to the
family transportation emergent property an
automobile must have certain components,
and they must be congured in a way that
gives them the correct interrelationship. For
example, you might have the best tires and the
best axle, but if they are at right angles to each
other (Figure 1), then their interrelationship
does not allow the emergent property needed
to work in an automobile system.
Which emergent properties are useful
depends on the nature of the system. But here
is the dark side of the force: not every emer-
gent property is usefulsome are either
wasteful or dangerous. Some systems do
unexpected things, show surprising behavior,
or result in unintended consequences.
Complexit y
A system produces emergent properties, and
that infers the existence of the interconnections
and interrelationships that make complexity. It
is in the complexity of the system that both the
opportunities and the dangers lie. The com-
plexity gives rise to the emergent properties
that dene the system and make it valuable, but
it is also the source of the most serious, and
least expected, problems.
It is in the nature of complexity that most
people lose the systems bubble. Complexity
was not even studied seriously or widely until
the 1970s, and when it was studied some
surprising ideas emerged. It was discovered
that complexity is on the cusp between stabili-
ty and chaos, and that only a small amount of
perturbation is needed to push the system one
way or the other.
In recent years, some people have attempt-
ed to apply chaos and complexity theory to
management systems. It is noted that com-
plexity gives rise to new systems that did not
exist before. Some people seem to believe that
this leads to a kind of mystical creativity that
can lead to ultimate success. Although there
was some good material published, there is
also a lot of evidence that many of the authors
did not understand the nature of complexity.
To be sure, a complex system can erupt
into chaos, and from that chaos can emerge
new stable structures. Order out of chaos is
the buzz word used to describe this very real
process, but what is rarely addressed is the
fact that you might not like the new stable
state. In other words, there is no guarantee
that the new stable order is better than the
old. It is in the best interests of all aboard if an
airliner is in a stable ight regime. Or is it?
Not all stable states are equal. Ask any pilot
whether a at spin is a desirable state.
Stable, yes, but desirable, no! Bankruptcy and
death are also examples of stable states.
Research demonstrates that systems with
an order of complexity as small as three ele-
ments, with two interconnections per ele-
ment, can produce chaotic behavior. In terms
of a product or organization, this means
unexpected behavior (good or bad), unin-
tended consequences, and unpredictability.
Not all such systems will produce chaos, but
the possibility certainly exists.
How we t hink about syst ems
Most managers today are singularly ill equipped
to deal with complex systems, whether that
system is their organization or the products it
produces. The root of the problem is the way we
were trained to think about problems. Our basis
for solving problems, and thinking about sys-
tems, is reductionism and analysis. In other
words, break the system down into smaller
elements that can easily be analyzed, rather than
the larger entity that cannot.
There is a small problem with that
approach: the very interrelationships and
connections that make the system behave as a
system are lost in the breaking down. You can
analyze tires, engines and transmissions forever
and not come up with the system automobile
or its emergent property of transportation.
How good would your physician be if he or
she had an innite knowledge of the cells of
the human body, but had not a clue how they
worked together or how they malfunctioned?
Without using an overarching way of look-
ing at the system, there is little possibility of
understanding it. And without understanding
a system there is very little possibility of
reengineering it to do anything useful. One of
the serious errors made by the reengineering
movement was the notion that they could
55
What s t hi s syst ems st uf f, anyhow ?
H. James Harri ngt on, Joseph J. Carr and Robert P. Rei d
The TQM Magazi ne
Vol ume 11 Number 1 1999 5457
Figure 1 Int errel at i onshi p of component s
build a new system tabula rasa, without regard
for the old system. Lacking understanding of
the old system (its function, purpose, design,
operation and value to the stakeholders)
makes it very difcult, if not impossible, to
architect a new system.
What t o do?
The modern business organization is simply
too complex to succumb to simple analysis,
and the more complex it is, the more likely it
is to discover a complexity that can degenerate
into an undesirable at spin state. Fortu-
nately, there are some principles that will help
when evaluating an organizational system, or
designing a new one:
Deneand managetheinterfaces. An inter-
face is a point where two elements come
together and exchange something. In other
words, it concerns the interconnections
and interrelationships that make up a
system. The most important key is to
realize that it is in designing and managing
those interfaces that one gains the greatest
leverage, and faces the greatest risks.
Organizeto reducecomplexity. If the real
way things get done is considerably differ-
ent from the right way found in a policy
manual, then it is a sure bet that the inter-
faces are mismanaged and/or are too com-
plex. People will nd a simplied way to
work around a bad system, but they
should not have to do so. Furthermore, if
they use work arounds then there is an
increased probability of a at spin behav-
ior emerging: stable, but destructive.
It is well recognized that a poor design, i.e.
one that is too complex, may well lead to
greater, undesirable complexity when infor-
mal attempts to simplify things are made.
Design it simple, stupid (DISS). A high
degree of complexity is necessary in many of
our organizations, but that does not mean
that the relationship of elements of the
overall system must be complex. The goal is
to create an organization in which the ele-
ments have a high order of internal com-
plexity, and a low order of external complex-
ity. Each element, in other words, must be as
independent as possible. A robust and
responsive organization will result.
Makeinterfaces clear and well dened. Inter-
faces that are ambiguous, gray, subject to
interpretation will result in variation in
behavior. High complexity and ill-dened
interfaces can be described in a single
word: disaster.
Do not over-optimizethesystem. It is a natur-
al tendency for managers to require all
elements to optimize their performance.
There is a simple rule that applies to all
complex systems: not all elements of a
computer system can be optimized; at least
one element must be sub-optimized to
optimize the entire system.
This advice ies in the face of what many
people believe to be true. However, consid-
er this true situation. A company required
all departments to optimize by attaining
the lowest costs possible. The travel ofce
was required to obtain the lowest air fares
possible. The optimization of the travel
ofce meant that expensive engineers,
marketing people, and executives either
had to endure many hours of layover at
airports, or took ights that spent all day to
arrive at a destination because of all the
intermediate stops. The travel ofce opti-
mization, done according to the general
rule for the entire organization, cost a huge
amount of money before it was corrected.
Or consider the urge to optimize the
big three of program management: cost,
schedule and performance. At least one of
these must be sub-optimized if the entire
program is to be optimized. Whoever came
up with the notion of cost as an indepen-
dent variable did not understand that the
big three are interdependent, and none is
truly independent. Among the big three,
there are no independent variables because
of their mutual dependence.
Leavedetails of managing sub-elements to the
specialists who know how. A good higher
level manager understands that it is the
interfaces that concern them, and not the
day-to-day operation of the elements of the
system. There are signicant differences
between the thinking required at higher
and lower levels of complexity within the
organization (Rechtin and Maier, 1997).
Manageperturbations and changeas a system.
The mark of a good system is that it is
robust to challenges, perturbations and
change. Systems, including organizations,
will respond to these threats in one of three
manners (Figure 2). The trajectory to the
changed state in Figure 2a is that which is
implicitly, if erroneously, modeled by all too
many people. Something happens, then by
some process of a miraculous immaculate
metamorphosis the new state is achieved.
Real systems behave differently.
The approach in Figure 2b shows what happens
in many organizations. The perturbation occurs
and, for one reason or many, the organization
jumps into chaos. Massive disruption occurs,
and there is even danger of the organization
settling into a new state that is a at spin
rather than something desirable. This situation
is called subcritically damped change.
56
What s t hi s syst ems st uf f, anyhow ?
H. James Harri ngt on, Joseph J. Carr and Robert P. Rei d
The TQM Magazi ne
Vol ume 11 Number 1 1999 5457
Figure 2c depicts a situation that occurs in
many organizations. There is so much resis-
tance and foot dragging that the change to the
system does not occur on time or as planned.
This situation is called overcritically damped
change.
The ideal practical situation is depicted in
Figure 2d. This is critically damped change.
So how do we achieve this approach? In prac-
tice, we do not. Systems tend to act like Fig-
ures 2b or 2c, rather than 2d. According to
Rechtin and Maier (1997), it is preferable to
implement several intermediate stable states
on the way to the nal stable state. Each time
change is applied, there will be some familiar
anchor in the old system that people can live
with.
Physicists and engineers who study feed-
back controlled systems call this approach
quasi-static change (Figure 3). They know
that such systems may go into either chaos or
some at spin regime if perturbed too much
at one time. However, if the system is per-
turbed a little bit at a time, and the minor
perturbations that result from each change are
allowed to die out before the next change is
made, the end state can be reached with no
massive and destructive upheavals. Done
otherwise, you will get to a new stable state, to
be sure, but there is no telling what that state
will be like.
Ref erence
Recht i n, E. and Mai er, M.W. (1997), The Art of Syst ems
Archi t ect i ng, CRC Press, Boca Rat on, FL.
57
What s t hi s syst ems st uf f, anyhow ?
H. James Harri ngt on, Joseph J. Carr and Robert P. Rei d
The TQM Magazi ne
Vol ume 11 Number 1 1999 5457
OLD STATE
SOMETHING
HAPPENS
NEW STATE
Figure 2a Unreal i st i c t raj ect ory t o changed st at e
OLD STATE
SOMETHING
HAPPENS
NEW STATE
MASSIVE
DISRUPTION
OCCURS!
Figure 2b Subcri t i cal l y damped change
SOMETHING
HAPPENS
OLD STATE
NEW STATE
PROGRESS
TAKES TOO
LONG
Figure 2c Overcri t i cal l y damped change
OLD STATE
SOMETHING
HAPPENS
NEW STATE
ABOUT RIGHT
Figure 2d Cri t i cal l y damped change
OLD STATE
SOMETHING
HAPPENS
NEW STATE
USE MULTIPLE
INTERMEDIATE
STABLE STATES
Figure 3 Quasi -st at i c change
Comment ary
To understand quality weneed to understand systems. This is a great start.