Systems Leadership

Creating Positive Organisations

Ian Macdonald, Catherine Burke, Karl Stewart

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351713504
• Edition: 2
• Topic: Business
• Subtopic: Organisational Development
• Index: Business

The new edition of this influential and bestselling book is concerned with how people come together to achieve a productive purpose. Survival and success in business and social terms have always depended upon our ability to form and sustain social organisations. People have a deep need to be creative and to belong. By creating positive organisations we can fulfil these needs and build a worthwhile society. One of the failures of organisations is precisely the lack of efficient and effective social organisation, which is what this whole book is about. Poor social organisation, including poor leadership, are major drivers of poor productivity and lead people to give up or retreat into a minimalist approach of just doing what is needed to get by and survive.

The authors provide a language for developing, discussing, thinking and working with propositions about organisations and management. They do not tell you what decision to make but rather present tools to help you consider, analyse and predict the consequences of your decisions.

This new edition is much broader in its application areas – public, private and not-for-profit sectors. It contains new models and propositions with regard to types of social organisation, domains of work and the nature and use of authority. It contains a range of new case studies, and throughout looks at how these ideas can be used to achieve an organisation's purpose while encouraging creative working. It is not a book about fads or fashion but an integrated approach that offers the user the benefit of foresight.

PART 1Systems Leadership: Why the Title?

Introduction to Part 1

Over the years we have observed that there are almost as many ideas about what makes a good organisation as there are people. We have said that organisational design is an area that is subject to fad and fashion almost as much as dieting or child rearing. There seems to be a strong attraction towards simple solutions often expressed in terms of one aspect. Whatever is assumed to be the ‘answer’ changes from year to year. One year it is ‘leadership’, next it is ‘teamwork’ or ‘empowerment’ or ‘collaboration’ or ‘innovation’. There is a fashion to move away from ‘hierarchy’ or so-called ‘command and control’ towards an ‘organic emergent network’ or ‘holacracy’. One problem with this is that such terms are never clearly defined. Like beauty they remain in the eye of the beholder and can eventually lead to a wide range of organisational arrangements where it is unclear what is contributing to or detracting from success or failure.

We argue that if we are to understand what contributes to the difference between success and failure we must have clarity about what we mean. We need shared definitions so as to be clear about what we mean by empowerment or innovation or even hierarchy.

Systems Leadership is a body of knowledge that helps not only to understand but also to predict the way that people behave and are likely to behave in organisations. Using Systems Leadership gives you the ‘Benefit of Foresight’. It is about how to create, sustain and improve productive social cohesion that is it helps to create the conditions where people willingly work together and give of their best.

Systems Leadership (SL) is a coherent and integrated theory of organisational behaviour. It is based on over fifty years of research worldwide and across many organisations and cultures. Its uniqueness lies in the fact that it covers all aspects of organisation. It has a clear leadership model but that is also directly related to a theory of capability that in turn is related to structure and systems. The underlying theory of Productive Social Cohesion also includes a theory of what is specifically meant by culture and values based behaviour. Therefore the critical advantage is that fragmentation can be avoided by not having to use different approaches to these aspects of organisation. Using a range of approaches may mean that they are unrelated and can indeed be in conflict and contradictory. Other approaches often only cover one or two of these topics. There are other models of leadership and or teamwork but how they connect to the design of an organisation may not be specified. Models of culture maybe disconnected from ideas about systems design or the operation of an organisation.

Although analogies and metaphor can be simplistic, we can liken SL to the functioning of the body. Although there are specialists in fields such as the heart, brain or muscles and so on, none of these makes sense until we understand how they all function together as an overall system. The structure of an organisation (skeleton) only functions when operating through systems (muscles, blood flow) which in turn are integrated with the human elements of capability and values (vital organs). We should not isolate, study or change elements without knowing how this will impact on others.

We argue that it is not effective to introduce leadership training independent of examining the structure and systems of an organisation or the capability of people to do the work required.

Another metaphor would be a motor vehicle. We do not design a car without understanding as to how all the parts fit together and, in particular, function together according to engineering principles, theory and purpose. Yet we will work on ‘bits’ of organisations without reference to an overall predictive theory.

In SL we see an organisation as a social process. It requires a purpose and a design to turn that purpose into reality. SL describes the principles whereby people come together, interact, design, operate and review their organisation to create productive social cohesion.

Not all bodies are the same and not all cars are the same but they do function according to underlying principles which can predict how well or poorly they will function.

This book is about establishing leadership that can liberate people and organisations from stultifying systems and structure. It is about eliminating the waste caused by unclear objectives, arbitrary use of power, and the excessive levels of activity and effort (much of it wasted) found in the ‘unorganised’ organisation. The human and material costs of bad organisation are a disgrace to an enlightened society.

While the business outcomes are essential if the organisation is to survive, we agree with Elliott Jaques who wrote, ‘… the efficiency of one or other form of organisation cannot be assessed merely in terms of economic or material outcomes; it must be considered in the fullness of its impact on human feelings, on community, and on social relationships and the quality of life in society’ (Jaques, 1976: 15). The concepts we set forth in this book, we believe, take into account the needs of the organisation, the needs of the people associated with it and the society it is embedded in.

Many managers we have spoken and worked with over the years have wanted to create such organisations. Some have succeeded. Yet despite the outpouring of books telling managers and leaders what to do very few offer a coherent reason or set of principles as why some approaches work or in what context they might or might not work. Many recognise an urgent need to improve. Global competition will destroy organisations that fail to provide the goods and services desired by their customers and clients. Governments will fall, and voluntary associations will fail to attract both money and volunteers if they do not serve their constituents effectively.

Systems Leadership is essentially about how to create, improve and sustain successful organisations.

This book is not a set of prescriptions; it contains a set of principles which, if we use them recognising the context and moderated by that context, will lead to improvements, sometimes very dramatic improvements. It is not a set of rigid rules, it is not simply ‘best practice’. As such, if applied in a formulaic manner it will fail. It requires work and at heart a real desire to create not just control.

If we further use the analogy of medicine as a discipline we are now (after many years!) fairly confident that we know how the body functions and what helps or hinders its functioning. The fact that there are still many people who are unwell, unfit and may lead an unhealthy lifestyle does not prompt the question; ‘So why doesn’t medicine work?’ Like SL, medicine is a predictive and holistic theory that evolves. So I can’t reasonably say, ‘Well I don’t think this medical theory is any good because I am walking 10k a day and not losing weight! Obviously medicine doesn’t work!’ Of course I haven’t added in that at the same time I am eating pizzas, burgers and drinking copious amounts of beer! The test of the theory is whether the outcomes are predictable using that approach and whether by changing the process the results will change predictably. There is a dearth of this sort of coherent approach about organisation and a reluctance at times to admit and to engage with the complexity and effort needed to improve the situation.

SL contributes to improvement across a variety of types of organisations. There is now considerable evidence to suggest that SL, if used appropriately, does indeed contribute to significant improvement. There is a bank of case studies and work to demonstrate this. Some are in the book, others on the related website.

Today’s organisations provide for most of our needs as individuals and as a society. It is largely through our organisations that we take actions today that will influence and shape our future. In the industrialised democracies, the majority of citizens work in such organisations. The quality of our lives is dependent on the quality of work that we carry out in organisations, which in turn depends upon the quality of the workforce and its leadership.

The degree and rate of change in technology, global competition, process innovations that tightly link relationships among suppliers, producers and customers, and changing social and political relationships make leadership ever more important.

However, many leaders and commentators see those changes as being driven by technology, or ‘markets’. While a great deal of money is poured into new technical processes and their development, the understanding of their impact and dependence upon social processes (that is, the way that people behave and work together) is underrated.

This book recognises that leadership and creating positive organisations is difficult and hard work, that people are complex and have opinions. It recognises that, if an organisation is to be successful, then understanding the social processes is just as important as understanding the technical or commercial processes (see Chapter 3).

If leaders do not understand people and how they view the world, they will fail. If they do understand people, they have a chance to engage the creativity embodied in everyone. Technology can be bought or sold. Two organisations can have the same technology. No two organisations have the same workforce or the same leaders. Having the right people in the right place at the right time doing the right work is difficult but immensely rewarding for both the organisation and the people in it.

Many leaders will say ‘people are our most important asset’. Yet (as the Gallup results show) their behaviour contradicts this every day. Even describing people as an ‘asset’ or as ‘human capital’ shows a lack of understanding that people are living beings with a will of their own. This will be directed to the benefit or detriment of the organisation.

Creating a positive organisation is not easy; even for the more serious leader or student of organisations there are difficulties.

There are three areas in life where people seem particularly vulnerable to fads and short cuts: dieting, parenting and leadership. We seem to want to hear about a magic, quick and easy solution. If that is your view about leadership, this book is not for you.

Leaders have found that too many management ‘theories’ are not really theories at all. They are presented as magic. They tell you what goes in and what comes out, but you don’t know what happens in the ‘black box’ in the middle.

They make assertions, followed by stories of a few exemplars who have had success. There is no context, no linking of cause and effect. There is no statement as to how and why it works, nor is there a statement regarding conditions where it will succeed or where it is likely to fail. Too often managers find themselves in the position of the old Indian Chief in the movie Little Big Man: when his prediction did not come true, he said, ‘Sometimes the magic works and sometimes it doesn’t.’

As a consequence members of the organisation just wait for each wave to pass. The workforce becomes more cynical and Dilbert becomes an international hero.

Micklethwait and Wooldridge (1996: 60) perhaps say it best:

from the management industry’s viewpoint, the beauty of the system [where one management theory rapidly follows on from another] is that none of the formulas work – or at least they do not work completely as the anguished and greedy buyers hope. The result is enormous profits for the gurus but confusion for their clients.

In one organisation that had pursued fad after managerial fad, the managing director said, ‘We put a lot of planes in the air; we are very good at take offs, but not very good at landings.’

Such fads also leave behind real fear and anxiety, as well as considerable human wreckage. At the most basic level, managers and workers fear losing their jobs. Managers also find contradictory advice not only frightening but disorienting. As one recently promoted senior executive, with a highly successful 30-year career, put it, ‘I don’t know what my job is, and I’m afraid someone will find out.’

The ways we perceive the world, absorb information and turn it into useful knowledge still has much in common with our ancestors. We need safety and security, recognition and esteem. We hope to succeed, but we must live with the fear and insecurity of our imperfections. Working in today’s social, political and economic environment takes great courage. It would be helpful to have some sound advice.

Purpose

The purpose of this book is to present a coherent approach that explains why people behave as they do in organisations. This in turn can guide leaders of such organisations along the path of creating the conditions that encourage genuinely constructive and productive behaviour.

CHAPTER 1 What Use is Theory?

Relating Theory to Practice

Each of the authors has heard managers argue that theory is for academics; experience is what counts. Some managers seem to pride themselves on their disdain of theory. These same managers then go on to quote their own views of management, and that good leadership is just common sense, but what is common sense other than an implicit theory?

All capable managers use such implicit theories every day, often with success. When this is done exceptionally well, we may refer to the person as a charismatic leader, which always carries a hint of mystery.

On the other hand, some scholars articulate theories, but never put them to the test of practice. These are the academic theories often scorned by many managers. Even where such articulated theories are put to the test, the methods too often reflect a distorted view of science that eliminates human intentions and values, or are so conceptual they are unrealistic. See the many journal articles on social organisation that have no impact on real managers. It may sound good in theory, but it won’t work in practice.

To get things right requires an understanding of the elements and relationships illustrated in Figure 1.1.

We argue that all human beings have beliefs, values, dreams and aspirations. Any valid theory of human behaviour must take these into account. All managers operate on the ...