When it comes to Systems Thinking, Russell Ackoff’s name pops up to my mind quite quickly. 6 years ago I heard about him first time. I watched his talks on YouTube and ended up reading one of his books (Systems Thinking for Curious Managers: With 40 New Management f-Laws’). As an attempt to summarize what I had learned, I wrote a blog post. Then years flew and I didn’t pay much attention to Ackoff.
That changed few days ago when I managed to find a new (to me) talk from Ackoff. I watched it on my TV earlier this week and it was ABSOLUTELY BRILLIANT. Even from Ackoff whose talks are usually very entertaining and full of insights. I couldn’t just leave it there after seeing the talk. Hence the blog post where I try to summarise what the talk was about. Because the talk was over one hour long, I’ve left some of the things out. There’s also interpretations involved. Just keep these in mind when reading my notes. Which is why I advice you to watch Ackoff’s talk yourself also.
Ackoff started his talk from Middle Ages. Describing how the life expectancy was only 27 years. Or that 95% of people didn’t travel more than 4 miles from their place of birth during their entire life. And life itself was quite miserable. Which raised the question of what’s the purpose of life if it’s such painful experience? According to Ackoff, Catholic Church provided the answer by reassuring people that life is preparatory for death. If you live correctly, you have infinite sojourn in paradise or heaven, so why the hell worry about 27 years. As a result Middle Ages focused on spiritual life and after life. Not this life.
Things started to change though for few reasons. First was Peter The Hermit’s crusade, which led thousands of men in contact with other cultures in Europe. Who became curious for example why other people have different sets of values? Or different habits? Or trades?
Similarly merchants who traveled for example from Italy to India and China, observed differences in cultures. They became curious of what cause those differences? As an outcome of many of these kind of events came Renessance.
Completely new view of the world was formed. This included
- Complete understanding of the universe was possible
- Understanding of the universe would only be possible when we had understanding of the elements of which it was composed and therefore we first had to identify them and understand them
- All relationships between things were reducible to one single simple relationship. And that relationship was cause and effect.
Our commitment to ‘cause and effect’ -thinking led to three very fundamental doctrines which permeated our thought almost 400 years.
- If I want to explain phenomena, all I have to do is find its cause. But how do I explain the cause? Well, I treat it as effect and find its cause. But then I have another unexplained cause. Is there any end for the causal regression? If you believe that universe can be completely understood, there had to be first cause. And this cause was God which was seen as first cause.
- It had enabled us to develop a theory of explanation that excluded the environment. We didn’t need the environment to explain anything. Actually all the fundamental laws of physics tell us what will happen when there is no environment (vacuum). Universality doesn’t derive from that they apply in any environment, but that they don’t apply in any.
- Does anything ever happen by chance? Spontaneously? No, if complete understanding is possible. Everything that occurs must be an effect of a cause. This doctrine is called determinism.
Ackoff continued by discussing about Isaac Newton and how it was asserted that universe is a machine created by God to do God’s work. We are here to serve his will. Now whatever the concept of God was or universe was, people believed that. If we combine that with something that goes back to Genesis. It was said that man (people) was created in the image of God, which means we are more like God than anything else on Earth (not surprising as we wrote Genesis).
When you both together both of those, you’ve got the premises of a very interesting syllogism.
- Universe is a machine created by God to do God’s work
- Man is created in the image of God
What should man be doing then?
Creating machines to do his/her work
And that was the origin of Industrial Revolution.
Industrial Revolution was about mechanisation of work. There are two fundamental concepts. Work and machine.
Work was defined as application of energy to matter in order to transform the matter. If I move a chair, I have changed the location of a chair. That’s work. If I burn coal and create heat, that’s work as I applied energy to the coal to transform it.
Machine is any object which can be used to apply energy to matter. And there are three elementary machines from which all other machines are derived.
- Lever arm
- Pulley wheel and axle
- Inclined plane
For example a screwdriver. You got the wedge at the end. That’s the inclined plane. You got the handle, which is the wheel and axle. And if you think the length, you got the lever.
Problem was to deal with work so we could mechanize it. To apply machines to it. How do we do it?
First thing you do is to analyze it. So we took it apart.
How far do you break it? If you read Frederick Taylor, he will tell you. You reduce work to its elements. In other words, task so simple that no two people can do it at the same time. It can only be done by one person at a time. Ackoff remembered his father to try to tighten the same screw as he was working on. Tightening the screw was a work element. As two only obstruct it.
So using work analysis we reduced the work to elementary tasks. Next job was to mechanize those tasks. Simpler the task, the easier it was to mechanize it. But we couldn’t mechanize all of them. Either we didn’t have the technology for some of the tasks. Or it was cheaper to use human labor than machines.
When you combine a network of tasks being performed by people or machines, what do you call that network today? That’s the modern (talk was recorded 1993) factory.
The production line and the assembly line is simply the result of analysis of work and its mechanisation. Direct consequence. And that has two very important implications.
- If there turns out to be another way of thinking, other than analysis, then there must be another way of organising and designing work. And there is. It doesn’t look anything at all like Ford’s assembly line or production line.
- In the process of mechanizing the work, we reduced work to elements that were simple enough to mechanize. Those that we couldn’t mechanize, we gave to people. And therefore we made people behave as though they were machines. We dehumanised work.
Industrial Revolution was the technological manifestation of Machine Age thinking. What happens with any age is the appearance of certain problems challenge the validity of world view. Those problems are called the limits. The limit is a problem which cannot be solved within the prevailing view of the world. Hundreds of them appear over time and you have to develop a critical mass before anything really occurs.
In 1947 appeared a book that shocked everybody, at least in academic circles Ackoff was in. Something fundamental was being challenged. That book was Norbert Wiener’s Cybernetics. But it wasn’t known what was changing. First insight occurred 1954. It came with book by Ludwig von Bertalanffy, according to Ackoff. Content wasn’t that important, but the concept around which it was built was. And that of course was systems. Because the book was called General Systems Theory.
Now why? That’s the critical question. Why did systems break the back of the Machine Age thinking?
We first need to though understand what a system is.
It’s a whole which consists of a set of two or more parts. It’s not an item, it’s not an irreducible thing, it’s not an element. It can be divided into parts. Three requirements are imposed on parts.
- Each part can affect the behavior of the whole
- The way each part affects the behavior of the system, depends on what at least one other part is doing. In other words, no part has an independent effect on the system, it depends on other parts. Or if you’re a logician, parts constitute a connected set.
- If you take the parts of a system and line them up in any order at all, doesn’t matter how you do it. And then divide it up into groups, subsets. The subsets, no matter how you create them, will have same properties as the parts. That is, every subsets of parts can affect the behavior of the whole. And no subsets of parts has an independent effect on the whole.
When you take these different requirements and add them up. It’s a whole which cannot be divided into independent parts. Which sounds almost trivial until you reflect. Because the system, following from its definition, has certain very critical characteristics.
- Essential properties of any system. The properties that define a system, are properties of a whole that none of its parts have. That’s not obvious. Ackoff was using as an example an automobile. If you break it into parts, none of the parts itself have property of moving you from one place to another. For example engine can’t do that alone. Or a steering wheel.
- From previous follows that you cannot understand the nature of a system by analysis. And that was a fundamental revolution. Another method was required and that was developed 1950’s.
This another method was, not so surprisingly, called synthesis. It’s exactly the opposite of analysis. When in analysis you break a system into parts, in synthesis you view the system as a part of a larger system. Ackoff used a university as an example. In analysis you break it into parts (colleges, departments, students faculty, etc.). Using synthesis you try to understand university as part of educational system, which it is part of, and what role university plays in educational system.
Machine Age began to die when we gave up the principle of understandability and when we substituted synthetic thinking for analytic thinking when we try to understand. Not when we try to know. Systems thinking is the fusion of analysis and synthesis. Depending whether our objective is knowledge or understanding.
There’s one problem though with synthesis. If you want to understand educational system, you need to understand the system it is a part of, society. Now what if you want to understand society? You need to pick the system it is a part of. And we are facing reductionism in reverse. Everything we try to explain, depends on larger system. Is there one system that contains everything?
We’ve given up the notion that universe can be fully understood. Now given that universe cannot be fully understood, if there were one whole that contained everything, you could never know it. If you did, you would understand the universe and if there isn’t, how would you ever prove that there isn’t?
Ackoff discussed next few minutes about how Zen Buddhism became popular in 1960’s as it reflected better the systemic thinking of that generation. From there he got to doctrine of expansionism, instead of reductionism, which says to understand anything you have to get to larger systems. You will never reach a complete explanation or understanding of everything, but your understanding increases the larger the system you comprehend. The knowledge increases the smaller the element you comprehend.
The transformation from cause and effect was an interesting story. The man who was first responsible of that, was Edgar Arthur Singer Jr. He graduated 1896 from Harward and had been the assistant of professor William James. Edgar was unusual young man as he got his first degree in Civil Engineering, second in Psychology and doctorate in Philosophy.
Edgar Arthur Singer Jr. showed that science had been cheating for hundred years. How?
He said, consider an acorn and an oak. Is the acorn cause of an oak? Clearly it isn’t as it’s necessary but not sufficient. That’s easy to demonstrate. How? Throw an acorn in to ocean. You don’t get an oak tree. Throw it in desert. You don’t get an oak tree. It’s necessary but not sufficient.
Science knew this. This was not a discovery of Singer’s. In late 19th century science began to be concerned with that type of relationship and gave it a special name. They call this relationship either probabilistic causality (this was the foundation of statistical mechanics) or non-determenistic causality. What Singer did was that he showed these are contradictions.
If a cause is defined as something which is sufficient for the effect and if the cause occurs, what’s the probability of the effect? One and it can’t be anything else. Therefore non-probabilistic causality is a contradiction. It is to say that the causes are not sufficient so it’s not causality. Non-deterministic.
Causality implies determinism. First law of logic, according to Aristotle, is if in an implication you deny the consequence, you must deny the precedence. Therefore non-determinism implies non-causality. It’s a fundamental law of logic.
Singer said this is a different relationship and gave it a name. He called it producer-product. Producer is necessary but insufficient for its product. This was written in 1898 and was completely ignored. Nobody saw the significance of it until 1954 when the context of cybernetics, ‘Analytical Biology’ book was published where exactly the same thing was rediscovered. In a different name, directive correlation.
When you look the world through product-product instead of cause-effect, many things happen
- If you want to explain an oak, you look for the acorn that produced it. Do you have the complete explanation for the oak? Of course not. It’s not sufficient. What else is necessary to become sufficient?
- You need moisture, certain soil with nutrients, and so on. In other words a list of other necessary conditions. The sum of the list is called the environment. We have an environment-fault, not environment-free, explanation.
- Nothing can be understood independently of the environment.
- Every law is constrained by the environment within which it applies. There’s no such thing as a universal law. They’re all environmentally relative. This was the first consequence of producer-product thinking.
- Second consequence can be boiled down to cause-effect being a way of looking at reality. There are an infinite number of ways. Because reality isn’t 2-dimensional, it’s multi-dimensional. Producer-product isn’t an alternative to cause-effect. It’s complimentary.
We’ve come to recognize that even the machine is a system. But it’s a particular kind of a system. Machine is a system which has no purpose of its own. It has a function. Which is to serve the purposes of something external to it. Its God.
Universe was earlier seen that way but so was early businesses. Who was the God of the early business? The owner who created it. He was present and all-powerful. He could do any damn thing he wanted. There were no labor laws, no restrictions, no registration. He was God. And the business existed to serve his purposes. It had no purpose of its own.
And his purpose was what? To make a profit. So Milton Friedman, who was always behind times, comes out and says the only legitimate business is business. That’s complete mechanistic view of the business. It’s a machine. As a machine the business is an instrument of its owner’s and the only responsibility of business is to maximise the value of the machine to its shareholders. So Rappaport and Friedman go off on maximising shareholder value.
Machine as a system has no purpose of its own and therefore neither do its parts.
Ludwig von Bertalanffy came along and began his papers in 30’s but they were written in German so they didn’t get known on US side of Atlantic until the 50’s. He said the organism is very different kind of a system. It’s a system but it’s different because organism has purposes of its own.
What’s a principal purpose of any organism? Survival. In order to survive, it must grow. So we now have a system which survival seeking and growth is seen as necessary for it. What about its parts? Its organs. They don’t have any purpose, they have a function.
Up until World War I most enterprises were in United States owner-managed. And they were only by an individual or a family and he was God. Unions were just beginning to appear to challenge the power of the owner. But several important things were occurring. Like the education of the workforce. In 1900 the average educational achievement of an American worker was three years. They were barely literate. By World War I they had gotten up to eight years because of public education.
But the critical thing that occurred that produced this transformation (from machine to organism) the way we looked at an enterprise was the fact that our economy was so healthy but the opportunities of growth exceeded the amount of growth an enterprise could achieve even by reinvesting all of its profits. If an enterprise took all its profits and reinvested it in its own growth, it still could not grow as fast as possible. And therefore the fundamental problem confronting the owner of enterprises in United States in 20’s was
- Do I retain exclude control? Do I remain God and constrain growth?
- Or do I share control with other contributors or capital and unconstrained growth?
Corporations that survived went public. In the process God dissappeared.
In the World War II United States went through another transformation for a series of reasons. The principal reason was this. The bulk of the American workforce was drawn into the military, they were drafted. Voluntarily or not.
This happened at a time that demanded greater productivity from industrial machine than ever had in the past. Which means substitutes were required. So who do you get as substitutes for the men who were drawn into the service? Elderly people and the young.
This was the first time in the history of enterprise that the workforce was not primarily motivated economically. Why? When men were inducted in the Army, they were paid twenty one dollars a month. Now you couldn’t support a family on twenty one dollars a month even in 1942. You didn’t have to because you got an allowance for each dependent. So your dependents could live above the poverty level but not luxuriously while men were in service. You didn’t have to worry about them and they didn’t have to worry so the people who went to work in the workforce did not have to work in order to survive and it was the first workforce that didn’t. Therefore it had different attitude towards work.
They said, “If you want me to work you’re gonna have to pay attention to me. I am NOT a machine that you can use as you see fit and discard when I don’t serve your purposes. Because I’m here because of patriotism and loyalty to national cause and you better pay attention.”
And for the first time management had to begin to think of the workforce as human beings. Also two movements happened.
Parts (people) of systems began to organise to protest the way that the system was affecting them. The system which they’re apart. They said that they had purposes of them own and demanded to be paid attention to. This was the race movement, where minorities protested the way society was serving their interests. It was women’s liberation. It was the generation gap problem. It was the alienation from work problem. Series of problems that go under the name humanization which had to do with the fact that society was becoming aware of the fact that the employed people are human beings with purposes of their own.
Simultaneously groups were forming outside. They were protesting the way that the organization is affecting them and saying “You start to serve my purposes better or I’ll mess you up.”. That was the ecology movement. The Consumer movement.
Suddenly systems were being confronted with three different levels of purpose.
- The purpose of the organism itself. The enterprise.
- The purposes of its parts.
- The purposes of a larger system of which its apart and the other systems in that environment.
Nature of management went through a fundamental change. And we haven’t caught up with that yet.