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Systems Thinking: The “Core” Core Competency For BPM
08/23/2004
By Howard Smith and Peter Fingar, Executive Partner, Greystone Group

As W. Edwards Deming, the father of the quality movement, pointed out, it is “the system” that is the problem. End-to-end business processes are dynamic systems, but today’s business professionals are generally not trained in general systems thinking. Too often constrained to a perspective limited by ingrained business practices, rigid scripts, and structured input-output work, few professionals have a wide-angle view of, or experience dealing with, end-to-end business processes.

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The worlds of business and technology are growing more complex, and managing that complexity is the goal of systems thinking. It focuses on the whole, and the interactions of the parts (vs. the internals of the individual parts) of a complex system. Systems thinking concentrates on the interfaces and boundaries of components, on their connections and arrangement, and on the potential for holistic systems to achieve results that are greater than the sum of their parts. Mastering systems thinking means overcoming the major obstacles to building the process-managed enterprise—for every end-to-end business process is a whole system.

Systems thinking provides a new perspective on business process analysis and redesign. Imagine holding your hand at arms length in front of your face and blocking your view of the earth, the entire earth? Astronauts can do that. The world below them looks drastically different from their perspective. They see the whole earth. Workers, however, only see bits and pieces of their company and their industry in the course of their earthbound daily work. Within individual specialties, workers lose sight of the overall business. They are deprived of knowing the results of their individual actions. They do not get to see outcomes in cause-and-effect relationships, and therefore stop learning. Feedback, specifically knowledge of effects, is absolutely required if workers are to learn from daily experience.

Today’s workers need an astronaut’s perspective of end-to-end business processes. Because today’s business rests on automation, practitioners of building lasting, growing, profitable businesses are going to need tools to help them take the systems thinking perspective.

The hard part of process design is understanding the interconnections and the interactions of business processes and sub-processes, the variables affecting processes, and the overall effects of decisions made by process designers.

Systems thinking provides a basis for understanding the environment under study, and long-term effects are revealed by running simulations of the models. Such business simulations have been termed management flight simulators and management practice fields. Mistakes and erroneous design assumptions can be discovered in the laboratory rather than in live operations. If reengineered business processes are tested in the real world, the very real results can be disastrous. What avionics engineer would introduce a new airplane without testing it in a real or digital wind tunnel? Hands-on process simulation also provides a learning tool for reinforcing systems thinking. Process designers can make assumptions about improved business processes and test those assumptions. Feedback closes the loop and facilitates learning. Only with the visibility provided by process management systems can end-to-end processes be understood, anomalies spotted, redundancies eradicated, and inefficiencies eliminated. Only with the simulation facilities of a process management system can well-intentioned process design changes be tested to see if they will fly in the unforgiving real world. Systems thinking and simulation tools to support that thinking are vital to building the process-managed enterprise, but an appropriate and rigorous BPM methodology is also needed.

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