"Research shows that an excessively high degree of efficiency in a system simultaneously increases its instability and reduces its vitality (viability)." - B. Lietaer
Organizations (as human-created systems) can be compared to complex ecosystems and, like them, are embedded in complex dynamic (so-called dynaxic) environments. In recent years, dynamic complexities faced by organizations and leaders have increased dramatically. In almost all areas of life, there is a high degree of interconnectedness of influencing factors and an acceleration of processes.
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In this dynaxic environment, a so-called "wicked zone" emerges, in which the necessary 'adaptation time' increases due to growing complexity, while the 'available time' is reduced due to growing dynamics.
This involves strategic corporate decisions, early warning for the entire organization, environmental issues, activities in the markets, and changing values in society.
Simple cause-and-effect relationships exist only in theory, not in reality. There, as in natural systems, indirect effects, relationship networks, and time delays govern.
Dealing with these issues requires new leadership methods that ensure the sustainable safeguarding of an organization's competitiveness (and thus vitality).
It is a matter of not only taking note of the existing complexity and dynamics but also learning to use them to act sustainably – that is, evolutionarily meaningfully.
Systemic leadership offers important foundations and tools for coping with these current and future challenges.
More of the "Old" and a Focus on Efficiency
Technocratically trained, leaders try to find new ways to master complex systems with a linear and causal logic. "More of the same" is the reaction pattern – more specialization, more rules, more control, more bureaucracy.
The business world, in particular, likes to imagine a perfect trivial machine with adjusting wheels and levers with which to achieve the desired results.
But in reality, the steps taken by organizations do not have directly predictable effects but depend on a variety of different influencing factors. Common methods and partial concepts (such as Business Process Reengineering or cost management) show in practice that they are not suitable for adequately dealing with complexity, dynamics, and diversity.
In addition, there is another finding from the study of biological systems: all complex systems become structurally unstable as soon as efficiency is overemphasized at the expense of diversity and networking, as well as the crucial resilience, robustness, flexibility, and vitality that these offer. Nature does not strive for the maximum level of efficiency but for an optimal balance between the two poles of efficiency and resilience. It turns out that resilience at optimum is even twice as high as efficiency (according to Bernhard Litaer).
Many business experts are pushing for endless growth in size and increases in efficiency because they assume that these parameters are a sufficient measure of vitality. Areas such as technology and trade have also focused almost exclusively on efficiency.
In fact, this is a suboptimal measure of sustainable viability because it ignores the network structure and systemic properties. For example, it is not possible to distinguish between a resilient economy, healthy development, and a bubble that will eventually burst.
It is interesting to note that all ecosystems have their key parameters within a specific framework that can be empirically calculated and referred to as a "window of operability" or "window of vitality."
This is because highly efficient systems are always very vulnerable. As an example from nature, a monoculture of spruce trees can be mentioned here. It is very easy to create and harvest rationally. But a single type of pest can spread very quickly and destroy the entire forest.
These findings can also be transferred to other systems, such as organizations or economic communities, since they also result from the "structure of complex systems."
Learning from Nature with Networked Thinking
"From nature, we can learn what is important for sustainable development." - B. Lietaer
The system-relevant main goal is always to increase and secure the viability (vitality) of a system, which is achieved through a balance between efficiency and resilience. Two structurally related main variables play an essential role: diversity and degree of networking.
It is important to understand the connections and dependencies of the overall system and take them into account in its decisions in order to develop a long-term and consequential action strategy. In this way, changes with the strongest leverage can be initiated.
It must be accepted that a company or organization, which is regarded as a natural system, does not function with the regularity of a machine. The familiar thinking in linear and causal cause-and-effect chains is to be replaced by a holistic and networked view and a thinking in cycles.
The basis for this is concepts that expand the current paradigms and prevailing models of thinking, accentuate the complex properties of organizations, such as nonlinearity, self-learning, and self-organization, and help the people involved to deal with complexity and dynamics.
With Expansion of Paradigms to Systemic Leadership
"Before the question of what can we do? The question must be asked: how must we think?" - J. Beuys
In order to initiate a movement towards a "window of vitality," it is important to look at leadership as a whole and not just as the sum of its parts. This primarily requires different ways of thinking: away from attitudes that separate and towards attitudes that connect and recognize the whole as related parts:
Objects - Relationships
Things - Processes
Hard Factors - Soft Factors
Laws - Patterns
Either/Or - Both/And
Linear - Circular
Systematic - Systemic
Short-Term - Sustainable
Parts - Networks
Leadership here has less to do with optimizing than with balancing, also with analysis, but above all with integrating and synthesizing very different factors. Leadership is easier to understand than trying to manage a complex system successfully. Shaping, directing, and developing complex systems is therefore the perspective of a system-oriented leadership.
As a basis, there are two different types of management approaches:
The constructivist-mechanical approach views the organization as a machine in the classical mechanical sense with the basic paradigm of complete controllability in detail. The focus is on profit maximization, economic aspects, a one-sided view, and shareholder interests.
The systemic-evolutionary approach views the organization as a natural system. The focus here is on the following topics: profit generation with side conditions, consideration of all aspects, a holistic and networked view, and the interests of all those involved and affected.
Recently, there has been a growing realization that effective solutions in leadership concepts are based on a synthesis of both types of methodologies.
"Systemic Thinking is System-Theoretical Explanation." - F. Simon
Participation and Inclusion of All People with a System...
Since an organization represents a socio-technical system in which individual people and teams behave like a living organism, the participation of all those affected is useful and relevant.
The design and development of the system should be carried out by all the actors involved themselves. This is because a high systemic (cybernetic) degree of maturity (vitality) of an organization can only be achieved with a high systemic (cybernetic) degree of maturity of the acting people (diverse possibilities for dealing with complex systems).
In view of the complexity of the phenomena in organizations, the methodological basis within the framework of systemic management no longer focuses on the mathematical analysis and solution of equations but on systemic design, leadership, and development.
The specific manifestation within the framework of these procedures is exemplified by the following exemplary methods:
To understand the system, it is important that all interactions between the networked elements/variables of a system are considered holistically. A supporting method here is the so-called influence matrix (also called cross-impact matrix), which describes the strength of the effects of the individual variables on all other variables:
(Position of the influence matrix image)
This influence matrix reveals which elements in the system play an active, a reactive, a critical, or a sluggish role. For example, levers can be identified in this way.
To understand the interrelationships and time courses, the overall network is displayed and examined:
(Position of the overall network diagram image)
A "simulation" examines how the system or subsystems react to the removal or insertion of variables and how changes in state of variables affect them. Likewise, the consequences of relationships between variables changing over time can be registered.
By comparing different simulation runs, it can be checked which consequential effects the change of a "control lever" or a "critical component" has on the entire network of a substructure. It also shows whether the desired effect is perhaps compensated, reinforces itself, or ultimately turns into the opposite and where corresponding limit and threshold values lie.
Within the framework of a systemic consideration, in addition to quantitative aspects, qualitative aspects are also taken into account. For this reason, no simulation program can be brought into a mathematical relationship system with exact data. For the practical application of the presented methods, there are various software programs as support.
Systemic Leadership – Opportunity for the Future
In many areas, systemic leadership is already being applied in operational practice. The use of methodological synergies, especially when following an approach based on integrative system methodology, offers many advantages:
Those affected are involved and can contribute their experiences and perspectives.
Together, a solid, fact-based "common ground" is created.
An effective early warning system is created.
A helpful model for decision support is created.
Quantitative and qualitative aspects are taken into account.
Structured and discursive approaches can be combined.
Opportunities for experiments and innovations arise.
In many practical projects, the use of systemic leadership methods has led to a deeper understanding of complexity and dynamics for those involved. It has changed people's mental models and thus initiated and promoted organizational learning.
Systemic leadership thus provides a mental and methodological framework that helps people deal more effectively with complex situations.
And thereby, processes for increasing the vitality / viability of the organization are supported.
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