Roger Martin looks at the roots of our current understanding of business structure in When More Is Not Better: Overcoming America’s Obsession with Economic Efficiency. He posits that the drive towards efficiency to maximize productivity and profit has caused us to think of business as a machine in which each department is the equivalent of the drivetrain or the steering system of a car. Thus, we believe that each piece when operating at greater efficiency will make the overall efficiency of the organization greater, though this is not always borne out by the data. Also highlighted in the book are the rising income inequalities and the perverse incentives that can be created by measuring along only a single data point (such as stock price) as further proof that structural change is needed.
What is interesting in this book is that the vast majority of the text is given over to solutions, with the open acknowledgment that this is a complex set of issues and that no single response will be enough to shift systemic problems that are 50+ years in the making. These shifts need to come from business, from consumers, from educational institutions, and from the government.
Just that recognition is a huge relief! Many business books claim that all (or at least most) business issues can be solved with the application of a single process, which is simplistic and not really applicable to most real world situations. In this book, on the other hand, Martin provides case studies and examples of how to get better results through better process design and implementation. There is solid research behind the recommendations, and a recognition that there is no one-size-fits-all solution.
In working with clients, Back Pocket Resources similarly stresses the importance of holistic and systemic thinking. Clients seek out consultation services when something is not working, and they are occasionally frustrated when we don’t offer a silver bullet to fix the one thing they’ve identified as the problem. Instead, we step back, and dig deeply into the organization. The single identified issue is very rarely the only issue, and it is often not even the lynchpin issue.
Complex thinking about complex problems leads to solutions that address the underlying issues. Creative, practical solutions will be needed for businesses to survive and thrive, especially given all the changes this year has offered.