The Systems Paradox

By Maurie Cashman

The systems that we discussed last week must be reviewed and retooled periodically to avoid what I call “Systems Paradox.” What is systems paradox? I would define it as a counterproductive force that can become embedded into businesses that have done a strong job of systemizing processes. The stronger the systems are and the longer they have been in place, the more likely that the paradox will begin to show itself.

The absence of a disaster doesn’t mean that one won’t occur. Perhaps you’ve merely “beaten the odds” up till now, but statistics will catch up with you eventually, and the result could be tragic. If you find yourself or an employee explaining away known risks by saying, “We’ve done it this way before without problems,” the organization may be succumbing to the normalization of deviance.

This is a wonderful example of the paradox I am trying to discuss. NASA arguably has the best systemized processes ever known to man. And yet, they have had spectacular and fatal failures that damaged their organization irreparably.

How does this occur? In implementing systems, the better we get at it, the more reliant on the systems we become and the more comfortable we become with that reliance. This continues until one day we realize that the systems are running on us instead of us managing the systems. Am I advocating against process systemization? Absolutely not. Quite the opposite.

Avoiding the Systems Paradox

KISS

The acronym for Keep It Simple Stupid is likely over-used and the technique under-practiced. The best systems are simple and can be easily followed and understood by your team. What are the most important value drivers in your business? Hint: if you think there are 30 you don’t understand your business. Nail down the things that must be correct in order for your business to function well and measure these first. You can always add on later if you find that there are some components that you missed. A friend of mine calls this “breaking the big rocks first”.

Use the Systems

Probably the best way to avoid the Systems Paradox (paradoxically) is to use the systems. Too many times I see tremendous effort and time put into designing, developing and implementing systems and then not using them with consistency. This is the surest way to fall into the trap of thinking that everything is allright because we have systems and therefore our outcome will simply “fall out” of the system (of course in a positive way). But what happens if the system is not quite correct? What happens if not everyone on the team uses the system? What happens if you, as the leader, don’t feel the need to use or support the system? What happens if you over-ride the system whenever you don’t get a result you like?

The Useful Idiot

In many businesses that have been around for awhile, no-one questions how or why things are done. I am constantly asking owners or employees why they do the things they are doing or the way they are doing it. In some cases they will respond that we have a process in place that calls for this action to take place in this way. In others, it is the way we have always done it. In most, they have no idea.

This is really no one’s fault – it is a self fulfilling prophecy and becomes even more a part of the systems paradox as organizations succeed with systems. People stop asking questions. There are two reasons for this. First, they are afraid to question the system because someone smarter and with more experienced than them trained them on the systems. Second, particularly in family-owned corporations, people are afraid to challenge what is happening for fear of looking foolish or worse, for fear of retribution from the leadership for daring to challenge the status quo.

The useful idiot can be an insider but is often someone who comes in from the outside that understands business but may not have a deep understanding of yours. The reason the outsider can be useful is that they don’t have to worry about looking dumb as they are not expected to know everything and they don’t have to fear asking dumb questions as they don’t have to “fit into” the system. They can speak truth to power and challenge the status quo. The answer: this is the way we have always done it won’t fly because the next question from the useful idiot is “why’?

Periodically Review the Systems

The first step in avoiding the systems paradox is to periodically review them. This is not an accounting audit and does not need to be difficult or costly. It is simply another process in which you periodically examine your systems to see whether they are still functioning appropriately and giving you accurate feedback.

Are your value drivers the same as they once were? Has the industry changed around you? Is there new technology here or on the horizon? Have your suppliers, customers or financiers changed their demands? Are competitors springing up with disruptive strategies? Have you made an acquisition that either needs your systems or has systems that you could benefit from?

If your systems are telling you that everything is ok but you are not getting the desired performance it may be time to look at these factors. It is also a good practice to simply put them on the table periodically, even when things are going fine, to see if they are still relevant.

Don’t Overreact

Finally, in order for system management to be effective it must be measured over an appropriate time period(s). This is not an annual budget. Every business likely has differing time frames for which systems should be built around and measured against. It is not good management to see one month or quarter of data and start panicking that the business is in trouble because the system says so. Some businesses are highly sensitive to economic cycles, some have very long sales gauntlets, some business have more financial flexibility than others, some have outside influencers that can’t be controlled. It may be more important to look at systems data over varying periods to confirm trends before making big changes to either the way you manage the business or in your systems. In other cases, there may be key indicators that would lead to making quick and nimble moves to maximize an opportunity that others are not picking up on.

KISS, find a useful idiot (I have several that I use all the time), periodically review and don’t over-react and you can avoid the Systems Paradox.