How Can Systems Thinking

Enhance Quality Efforts?

Jay L. Chatzkel, Progressive Practices
Barbara Chatzkel, US Internal Revenue Service

Conference on "Systems Thinking in Action" explores organizational

learning structures
Systems thinking is a framework for seeing interrelationships rather than things, for seeing the
forest and the trees. As such, systems thinking is one of those related disciplines that enhances
quality efforts. Applied in partnership with quality activities, systems thinking serves as a lens to
see beyond self-limiting perspectives. It provides scope and enables us to better frame the
boundaries of the quality effort.

One way systems thinking can enhance quality efforts is by using it to probe why quality initiatives
sometimes fail and to understand how the activity can better succeed. For instance, many quality
efforts initially go after "low hanging fruit." Over time, returns on these activities diminish and the
initiative can stall out. Using systems thinking enables us to reframe and reactivate the quality
process by emphasizing the search for the relevant players in the system, the interactions of the
whole system, and the resolution of the underlying problems. In the broadest view, systems
thinking is a fundamental shift in how we look at the world.

Since 1990, the premises and applications of systems thinking have been the subject of the annual
Systems Thinking Conference, sponsored and hosted by Pegasus Communications in Boston, MA.
This past fall, the conference focused on developing the infrastructures that enable the practice of
systems thinking in organizations. Speakers, including Peter Block, Danah Zohar, Karl-Henrik
Robert and Peter Senge, challenged attendees to actively explore - both in theory and in practical
effects - a systems thinking view of organizations in contrast to the predominant mechanistic and
static view.

Personal Accountability: Peter Block

Peter Block, consultant and author of Stewardship, opened the conference, He enjoined attendees to
rethink a galaxy of issues that are also core concerns in the quality arena: the role of the leader, the
political organization of institutions, and the continuation of organizational patriarchy. Block
explored the interrelationships among personal roles, organization-wide accountability, and the
structures that allow for learning. He emphasized the need to redesign institutions that build from
the outside in, respecting customers, employees, and the community equally.

These issues may go beyond the traditional quality concerns, but they are at the heart of what
quality is ultimately about. The vitality, flexibility, and fluidity of organizations are tied to our
institutions becoming learning organizations that are driven by the adventure and spontaneity of
their people. Block thrust the responsibility for learning onto his audience. He asked: "Are we
willing to look at the politics of our organizations? Are we willing to see that politics has organized
them in certain ways, and that is how they operate?" The answers define whether organizations can
become learning organizations. Learning organizations can stand discovery and surprise; high
control organizations cannot.

Sovereignty for Safety

Block observed that institutions are set up for behavior modification rather than learning; in these
organizations, most people will choose safety, not adventure. He suggested that in these
institutions, we yield our personal sovereignty for "safety." This exchange supports the continuing
existence of patriarchy. The issue: "Can we step out of the box, be accountable for our actions, if
we still move toward someone to take care of us?" Since a requirement of learning organizations is
that all of the people are deeply accountable, the question illustrates a true dilemma. The issue
Block presented is how to design structures that increase people's sense of responsibility and
accountability.

"Our wish for leadership is an escape from responsibility," according to Block. "If we are serious
about a learning organization, we will betray the social contract (i.e., taking care of people) and
move toward partnering. "

Most, if not all, experts maintain that top management must actively buy-in for a quality effort to
succeed, but Block advocated letting go of that concept. He told his audience that "If you want a
learning community, you don't start at the top. The top is not used to spontaneously perceiving
experience. You don't need sponsorship from the top; you need indifference." Block does not call
on top management to "walk the talk," nor does he believe that we need top leaders to be role
models. Block's emphasis is on peer accountability.

"Peer accountability," he said, "is changing the world. We can defend against our boss, but not
against our peers. "

Structure, Design and Choice

Block noted that we need to have structure, but added: "How do you use structure in the service of
choice? How can we claim choice in an environment where there is so much structure? We need a
certain amount of structure, but too much structure is destructive."
Learning, Block continued, demands community, whereas high command/control demands
isolation. To build an antidote to isolation, he recommended using a model that generates contact.
The "boss" manages the process, i.e., gives order to the distribution of choice. With both the right
and the obligation to lay out the playing field, the boss must "engage the middle and the bottom to
redesign their processes, to be architects of their processes. " Block told his audience not to expect
to change a whole system in one single effort, but rather to see organizations as a collections of
villages, each going through its own transformation. "Develop a village, " he said, "and you build a
nation. " Block would begin the transformation with those who deliver services. To accomplish
this, he advocated letting people choose their own learning. Real change is the change in purpose,
replacing shareholder value with customer and community value. This is a core culture change
since most institutions base their survival on most customers not having a choice.

Quantum Worldview: Danah Zohar

Danah Zohar, physicist, philosopher and author of Quantum Individual and Quantum Society,
described for the audience how the discoveries of the new physics of the 20th century provide an
opportunity to see the world and our institutions in a different way - as a continuous, dynamic
reweaving of energy patterns and relationships.

The mental model that has dominated our thinking since the 17th century is based on Isaac
Newton's discoveries in physics. The Newtonian worldview is made up of individual, separate
atoms and predictable pathways. It is determinate, rational, logical, and divisible. In this
mechanistic world, we can analyze anything by taking it apart and putting it back together.
Taylorism and scientific management emerged from this mental model.

The 20th century's discoveries in quantum physics provide a different set of assumptions that allow
us to operate from a different mental model. The quantum revolution revealed a different universe.
In the quantum perspective, we are in a continuous process of discovering and creating reality. In
certain ways, the quantum view resonates the convictions of Dr. Deming concerning systems and
how "the things that count cannot be measured." The things that are not predictable are the things
we cannot get our hands on: mindsets, patterns and relationships. Yet, these are the phenomena that
determine our field of operation.

One way to contrast the Newtonian and quantum views is to examine how we might move from
Point A to Point B. The Newtonian sees one certain and predictable path. However, travelers in the
quantum world of uncertainty recognize a limitless number of possible paths. In fact, they see Point
B as a potentiality; in the quantum view, when we go from Point A to Point B, we create Point B.

There are various lessons for quality practitioners here. One is that if we narrow our options and
eliminate possibilities, we may eliminate some better ways of accomplishing our desired ends. A
second is we cannot know outcomes until we explore and interact with that field. A third lesson is
that the things that we habitually consider may not be the things that will, in the end, effect the
conditions we are trying to influence.
Experimenting on the Edge
Zohar did not say that the ways we have been working are wrong, or even obsolete; rather, she
emphasized that they are only part of the answer. The universe, she noted, is both the old model
and
the new, both "particles and waves. " She said that creativity takes place on the edge of our existing
paradigm, where we try to answer questions that cannot be effectively answered by our existing
model. The new questions will lead to new mental models and patterns.

A key way to discover reality in the quantum model is through dialogue. In the quantum view,
everything exists in relationship to everything else. For our "selves" to exist, the "other" must exist.
In other words, we must draw from our environment to become more of ourselves. Zohar suggested
that a motto for the quantum society could be: "The more diversity, the more there is of me." In
other words, the more we are open to each other, the more we have the potential to go beyond our
individual selves and develop a whole that is greater than the sum of its parts.

Zohar's ultimate lesson is: "We must become quantum selves to create quantum organizations. "
However, we cannot change any , of our mindset until we change the thinking behind the thinking.
The way we create new mental models is by suspending the categories we use, devising new
categories and articulating them. This is done through asking questions, something that breaks
through our isolation and again involves dialogue. Zohar's view provides a concrete model for the
integrative, cooperative, and constantly inventive infrastructures necessary for the learning
organization.

Large Scale Change: Karl-Henrik Robert

Karl-Henrik Robert is the founder and working chairman of The Natural Step, an organizational
framework for large scale social and environmental change in Sweden. Founded in 1989, The
Natural Step is a federation of professional associations and networks that cooperate on projects to
benefit the environment. The Natural Step is based on the premise of shared vision: If you want a
large number of people to work together in a coordinated way, they must share an image of the
system of which they are a part.

Systems thinking has played a central role in the development of The Natural Step. Robert's use of
vision, the framing a set of core conditions, and planning backwards from the future provide a
valuable perspective to the quality community.

The Natural Step has been broadly successful in Sweden and is spreading into other parts of the
world. As of this past fall, 19 networks of professionals, comprising approximately 10,000 people,
had linked with The Natural Step in Sweden. All networks are independent and pay no
subscriptions for to support The Natural Step office.
Mastering the Principles Robert likened the organization of The Natural Step to a tree. The trunk
provides the overarching unity to the work, while the various associations, operating as leaves,
provide inputs from their background. According to Robert, "Because we are operating out of a
shared mental model of the system as a whole, we are able to operate effectively as a team rather
than simply a collection of individuals. By working cooperatively toward the same overall
principles of sustainability, we believe we can create large-scale change."

The rules of the game are to create systemic conditions that support four principles of ecological
sustainability:
1. Nature cannot absorb all that is disbursed (our garbage).
2. If we produce more than can be absorbed, it will accumulate (toxicity).
3. Depleting diversity and resources takes away from our capabilities to produce.
4. We need fair, just and efficient use of resources.

'Backcasting' as a Tool One tool The Natural Step uses in planning for a sustainable society is
"backcasting, " which Robert maintained is a better leveraging tool than forecasting. In
backcasting, we define what a position of success looks like and work backwards. In forecasting,
we are stuck working with trends; whereas in backcasting we are not captive of the currently
dominant thinking. Robert "backcasts" with people and organizations, guided by the four overall
principles. "If you forget the overall principles," he noted, "you are doomed to failure. If the overall
vision is missing, the short term takes over."

Go Upstream
"If you are defining the overall principles of the system," Robert emphasized, "you have to go
upstream. The environmental problem is a societal problem. " Systems planning would be applied
upstream.

The goal of The Natural Step, he said, is to change problems into opportunities and generate the
systemic conditions that support the four principles of sustainability. To do this, The Natural Step
networks of professionals work with cities and businesses to find out "what we can do to help them
do better. " Robert and The Natural Step networks explain the conditions that must be addressed
and ask how they can best respond. The emphasis is on what can be done within the constraints
(market conditions, etc.) to be the good guys to meet the future.

"Any smart team understands that you will be hit by the future market or by future legislation if
you systematically depend on something that has no future," Robert told his audience. "We train
businesses to make investments that help them improve their image in the short term and set the
stage for greater profitability in the long run. "

IKEA, the household furnishing company, has taken up The Natural Step's challenge and taught its
26,000 employees worldwide what the four conditions are and how to integrate them into IKEA's
operations, planning and development. IKEA's perspective is that this is a smart investment.
The Natural Step gives participants the opportunity to create their own solutions to a larger issue of
which they are all part. Respect, as well as opportunity and responsibility, have been fused with a
common core of conditions. The result is a large scale change process that has gone beyond any
individual participant's expectations.

Developing Infrastructures: Peter Senge Peter Senge, director of the MIT Center for Organizational
Learning and author of the Fifth Discipline, closed the conference by addressing the role of
infrastructure and the need for new guiding principles. Senge called infrastructure "what wires
things together." He said that "fundamental innovations in infrastructure are important in order to
create an environment where the work we are doing can continue. " He categorized these
innovations as (1) rethinking and redesigning existing infrastructures, and (2) creating new
infrastructures to support learning.

Rethinking Existing Infrastructures

Senge noted that things like training will be vulnerable during difficult economic times, but that
institutions are unlikely to eliminate planning or performance measurement since those processes
hold the organization together. We leverage these kinds of processes, he said, by redesigning them.
For instance, Shell International Petroleum Company began to realize that its "single plan"
planning process was becoming irrelevant in a world of unpredictability and change. To make the
planning process more than a paper exercise, it revamped its scenario planning process to be a
vehicle for organizational learning. Transforming the strategic planning process into a "planning as
learning" process has been a major catalyst for building learning capacities throughout the 100,000-
person organization, and enabled Shell to become one of the most profitable and resilient
organizations in the world.

Creating New Learning Infrastructures

Other organizations, Senge continued, have found they need to create new vehicles to carry on their
work. For instance, EDS now has a network of 100 "transformational coaches" working as internal
consultants throughout the corporation. Ford Motor Company and others are using new product and
service learning laboratories in another approach in which working and learning are bought
together as one process. A third infrastructure innovation is the use of "learning histories" which
are introduced to enable serious analysis and reflection on what has actually taken place.

Infrastructure - As Part of Organizational Architecture

As important as infrastructure is, it in turn is significant only as part of the overall organizational
architecture. According to Senge, "An organizational architecture really functions in the service of
a larger purpose, which is to create an environment in which the 'deep learning cycle' can be
initiated, energized and sustained. " The deep learning cycle involves developing the new skills and
capabilities, a new worldview and fundamentally new attitudes and beliefs.
Cultural Stories
What glues a culture together is a story. We are in between stories "and we have not learned a new
one." Senge quoted Dee Rock, founder of VISA International, who said, "we are living in an era of
massive institutional failure on every front." There is a mismatch between our institutions and the
deeply interdependent, dynamically changing world. Senge continued, "It's time for a new set of
guiding ideas - new stories. Stories are kind of a hologram for our societies. We need a new story
of how human beings and human institutions can discover our place in a larger natural order. " Out
of deep inquiry into ourselves, our work and our world - we will begin to listen to our own voices
and hear our own stories.

As quality practitioners, we acknowledge that the world is changing. Quality principles remain
sound building blocks for understanding and improving processes. The tools, techniques and
concepts of systems thinking provide provocative complements to the quality toolkit. A systems
thinking approach is a platform to take a different, but aligned, look at the quality issues being
grappled with in our organizations today.

For further information about the annual Systems Thinking Conference, contact: Pegasus
Communications, Inc., PO Box 120, Kendall Square, Cambridge, AM 02142, USA (tel: 1-
6175761231, fax: 1-617-576-3114).

Jay Chatzkel is an editorial advisor to The TQM Magazine and principal member of Progressive
Practices, a management consulting firm. He may be contacted at 8004 Trevor Place, Vienna, VA,
22182, USA (tel: 1-703-556-4255; fax: 1-703-790-0071,
email: jchatzkel@progressivepractices.com).

Barbara Chatzkel is program manager for quality and reengineering efforts at the US Internal
Revenue Service in Washington, DC. She can be contacted at 1-202-622-5710.