Systems thinking refers to a discipline in management that focuses on understanding a system through the interplay between its components.
The whole system refers to a systems-thinking view that examines the entire organization in relation with its environment. It allows you to understand, analyze, and discuss the design and construction process of an organization as a complex, integrated system of interconnected systems (human or non-human) that must work together to make it function well.
Systems are made up of several entities, including people, processes, practices, policies, and people. The system may include policies, processes and people, as well as other entities (e.g. Open systems are more realistic and common.
A whole system’s boundaries can be defined at a level that is appropriate for the purpose being considered, e.g. The education system or the entire school system.
System can be designed and implemented at different levels. They can both work together or independently. The finance system, decision-making and accountability systems.
Systemic failure can affect an organization as a whole. This is an event that occurs within a system or high level system. It involves a failure between system elements and causes overall failure.
Systemic failure could be due to unclear goals or a weak understanding of the system, flawed design, or individual incentives that encourage loyalty toward sub-ordinate (rather, super-ordinate) goals.
Success in a whole system will require a performance management platform that goes above and beyond individual systems and their leaders. Some features include team or group-level goal-setting, incentive, communication and reviews, rewards and accountability. Instead of focusing on silo performance, the goal is to look at what binds people together and what binds them together.
Functional success and whole system failure can co-exist. Although silos’ leadership may be successful in its own right, it is unlikely that they are integrated enough into the system as a result of a deficiency in systems management, design, or understanding.
Managers must collaborate across functional systems in order to make a whole system work. A system cannot fail if its leadership fails at the highest level and if there are multiple senior managers involved. This is known as systemic leadership failure.
Individual executives at lower levels of the system may not be held responsible for systemic failures. They might argue that the larger system was responsible for the failure. They might argue that the failure of particular systems integrated with their own work was what caused it to fail. But, the responsibility for designing and managing the integrated ‘whole’ system should be shared with others.
Executives can be unable to anticipate and understand how the system will work and what it might do under pressure. They resort to the hollow phrase “lessons will/have been learned” in order to avoid being criticized for their difficult task. Investors are also reassured and diverted by their use of the phrase “lessons will be/have been learned”. A ‘rogue trader’, which is usually a sign of a systemic failure.
The leadership challenge is made more difficult by the realization of the shadow system. Shadow systems are where non-rational issues like e.g. Politics. Trust, hopes, ambitions. Greed, favors. Power struggles.
The system can overwhelm, confuse, block, or fail to recognize leadership. But, the system can be broken by leadership. Systemic failure is defined as any leadership failure that occurs within, outside, or below an organization.
