I have multiple blog posts on this subject, but decided it was time to devote a post just to this topic.  This thinking has dominated our collective US psyche for a century.  We don’t even recognize it, because it is the way we do business and organize our government agencies.  It is like breathing, we don’t have to think about it . . . we just do it.  If you ever want to screw someone up in golf, just ask them if they “breath in or out” on their backswing.  They start thinking about it and the result is they lose concentration.  Try it.

Systems thinking is an improvement over Frederick Taylor’s scientific management theory.  The functional separation of work of scientific management leads to what W. Edwards Deming called “sub-optimization” or when we optimize each function we don’t get a good end-to-end (system) result. 

One of the problems I have with outsourcing is that we take a function (call center typically) and try to optimize it by getting the “experts in that area” to do it.  Sounds plausible, but systems don’t react that way.  Some of my readers take exception (outsource vendors) and this isn’t to say that outsourcing is all bad, but the assumptions it will reduce costs are bad.  Unless the outsource vendor understands how to optimize a system and not a function all is lost.

The same can be said for those pursuing a shared services strategy.  If we combine call centers or back office functions we will reduce costs (or at least the visible ones).  Again, sounds plausible, but most of the time the organization winds up increasing the total/end-to-end costs to the system.  No savings and in a management paradox these moves increase costs.

Our best bet is to decrease costs by understanding our organizations as systems.  This will require that I ask you (my readers), Do you breath in or out on your backswing?  Maybe a break in our concentration is just the remedy for better thinking.

Leave me a comment. . . I can take it!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.