System-oriented management – what is that? Another buzzword from the consulting guild?
No, system-oriented management is the natural approach to the topic of leadership. The current economic development vividly demonstrates that the previous management approaches are not (or no longer) effective. Why is that? What has changed so much that previously proven approaches no longer have any effect?
If we look at global developments, we see advancing globalization, the networking associated with this, and the digitalization of many processes. Behind these developments, we see increasing complexity.
Complexity is the main driver for the changes we perceive around us. Tangible assets are diminishing in importance, while new properties and capabilities that create value are emerging from the interconnection of elements. There are fewer and fewer clear cause-and-effect relationships; rather, a complex feedback structure results from the multiple interconnections of all entities. Every action triggers a reaction that can unfold its effect indirectly and with a time lag. The seeds of success in a networked world are thus found in plurality, in the “not only but also”, in communication and in understanding the effects of connections in open networks. It also becomes obvious how little the individual can actually move. It also becomes clear that each of us is part of a networked system.
Thinking and acting systemically means judging benefits by the whole, not by a subset.
Because leaders and also the organizations they lead are (only) parts of higher-level systems, they should think in terms of complements and ensure that the seeds of new value can flourish. This task gives rise to the requirements for leaders in complex environments:
- Cultivate diversity as a seed for the new and consciously allow certain redundancies as a prerequisite for development instead of considering them as avoidable cost items. Monocultures, after all, cut off sources for the new. Organisations that are too lean even run the risk of becoming rigid because they can no longer adapt. The more complex your organisation’s environment is, the more complex your organisation itself needs to be in order to cope with the environment complexity.
- Ensure that new opportunities are identified instead of relying on continuity. Allow “freedom to innovate”.
- Keep yourself and your organisations flexible to take advantage of opportunities. Make decisions in a way that allows you to gain opportunities in the future and achieve maximum adaptability. In complex environments, strategic agility is more important than a well-developed business plan.
- Not individual achievements, but achievements that are designed together with network partners and coordinated with the environment lead to sustainable success. Work in cycles. Modelled on nature, trace the effects of your actions back to their causes, for example, by allocating costs and revenues from network services transparently and fairly and by closing processual and material cycles.
- Organisations define themselves through their processes and through their interaction with their environment, not from structures. What is essential is what happens at the interfaces between units or functions (1.3.1.).
- New things often emerge at the edge of one’s own field of activity, because this is where a particularly fruitful exchange with other disciplines (3.2.) can take place. Therefore, create permeable interfaces even at your company’s borders.
- Promote regular processes in your company. They can only work in connection with their environment. Every decision triggers direct or indirect repercussions. Processes of self-organisation are not only a form of achieving stability, but a necessary prerequisite for mastering the challenges in complex systems. Complex systems cannot be controlled top-down and should therefore not be organised and managed top-down.
Complexity is a measure for degrees of freedom, i.e. development opportunities. Higher complexity therefore also means increasing uncertainty. However, high complexity also offers opportunities for which you should be receptive. Thinking in terms of systems means striving for equilibrium, not viewing opposites as sources of conflict but accepting them as something natural and necessary and understanding that there are always connections. In this way, even the coexistence of different views that are prima vista mutually exclusive can be understood and welcomed as a source of capacity for change and vitality.
Especially in rapidly changing environments, which are characterized by unexpected discontinuities, the understanding of complexity as a source of change is necessary to gain a new orientation. This orientation does not cling to the status quo, but is based on permanent change as a natural process. It keeps awareness of risk present and makes it easier for us to seize opportunities and translate them into future presences. By future counterparts, I mean future capabilities and connections that are likely to be needed in those anticipated counterparts. One more thing: Future realities are not scenarios that we can wish for or imagine. Future realities emerge from the collective expectations of all stakeholders regarding development. Therefore, it is particularly important to listen, to observe, to take different perspectives and only then to draw conclusions.
System-oriented managers are not concerned with standing out from the future environment; they strive to fit back into the future environment a little better. The often misunderstood phrase borrowed from evolution, “Survival of the fittest.” refers to fit as in suitability, not peak performance. So try to achieve harmony between the workings of the environment and the workings of your company. In this ideal constellation, tensions disappear, everything seems to flow easily and naturally. The pressure to which we expose ourselves – and which we ourselves build up – if we do not think and act in a system-oriented way is eliminated.
Stabilize your organization through systems-oriented management. Gain orientation as an organization that builds on change and is not disrupted by change. Gain natural influence by acting from inner strength in harmony with your environment.
Coordinate your operational measures in a system-compatible way.