"Why Organizations are Slow to Adopt Systems Thinking", Russell Ackoff, 49th Annual Meeting of the ISSS, Westin Cancun, July 1, 2005, 9:20 a.m.

Russell Ackoff

49th Annual Meeting of the International Society for the Systems Sciences, Westin Cancun, July 1, 2005

These participant's notes were created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. These should not be viewed as official transcripts of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. These notes have been contributed by David Ing (daviding@systemicbusiness.org) of the Systemic Business Community ( http://systemicbusiness.org ).

Introduction by Enrique Herrscher

• Remember meetings for an individual
• First meeting at ISSS, was in Philadelphia, remember
• Edinburgh, Prigogine.
• Hope that this meeting will be remembered for Russ Ackoff

[Russ Ackoff]

Gave a lecture to undergraduates

• Students says book contained more than you know.
• How old are you? 86
• When did you teach your first class? September 1941. Teaching more than 60 years?
• When was the last time you taught a course in a subject you never took? September 1951, when moved from one university to another.
• Good learner.
• Too bad you're not a good teacher.

In a year, probably talk to 40 to 50 groups of executives

• Usually talk about systems thinking, and its implications for management.
• If this stuff is so good, why aren't more companies or governments using it
• Resistance to change -- no explanation
• CPG: why do people consume your product?
• Because they like it.
• Why do they like it? They consume it!

Why organizations don't adopt

• Specific: why not specifically

Generally: since youth, taught that mistakes are bad

• Exams are not about learning, grading.
• If they were interested in learning, they would give you same exam a week later.
• When you get to organizations, the same thing
• In companies, if you make a mistake, you can shift the blame to someone else: a competence of shifting blame.

Was working with an automotive manufacturing

• Give a course: 2-day course, small groups
• Junior vps (20), intermediate vps, senior vps, then executives
• Junior vps said great, but would need the approval of the bossesProgram began
• Intermediate vps said talking to the wrong people, need to talk to senior vps
• Top two sections asked: they needed the approval of the CEO.
• Last session: R. J. Miller, who became dean of Stanford U.
• He said that this stuff is great, but he couldn't use it without the support of the subordinates
• Accountability gets passed: cover your ass

You can't learn by doing something right

• What you get is confirmation of what you already know.
• Can only learn by mistakes, and then correcting.

Two kinds of mistakes:

• Error of commission: doing something you shouldn't have done
• e.g. Anheuser Busch didn't know to run a bakery
• Robert Bruner: Deals from Hell -- serious mistakes of commission
• Sony-Columbia merger, $2.7B write-off; NCR by ATT, cost $4.1B; AOL-Time Warner, $200B loss in stock market value
• In every case, the executives benefit: they got an increase in the bonus

In an organization, only one of two types of error are acknowledge: errors of commission

• Errors of omission not recognized
• Kodak could have bought Xerox, could have bought Fuji
• IBM almost went out of business, by not paying attention to small computers

Accounting system only takes account of one type of error: commission

• Try to find out, who at Xerox, decided not to develop the computer
• Try to find out which general was responsible for a catastrophe
• Organizations are constructed to hide people in errors of commission

Can only get caught at doing something you shouldn't have done

• Best strategy: don't do anything
• This is responsible for the conservatism in our organizations.
• Principle way to get into trouble is to do something

In U.S. today: has Bush ever admitted a mistake?

• This shows that they haven't learned
• What can we do?

What can we do?

• We need to create a system that can capture all decisions
• Need a record of decisions: both decisions to do, and not do
• Two types of effects: makes something happen that would not otherwise happen; or to prevent something from happening, that will otherwise happen
• Every decision has an effect, and a time in which that will happen
• Every decision has assumptions, which should also be made explicit
• Information, knowledge and understanding, should be recorded
• Have created decision records for all kinds of companies: handwritten, or computer form
• Normally kept by the secretary

Can then check:

• When are expectations being met, or not met?
• Monitoring: the identification of deviations from expectations and assumptions
• You don't learn by identifying mistakes, but by correcting mistakes

Correcting mistakes is also a decision

As systems sciences, have a duty to show them they're conservative, then teach them how to learn.

The general reason

Look at journals:

• Introverted
• Titles scare the death out of users
• We cloak our thinking in jargon: a device for concealing ignorance
• University: students can use jargon that they don't understand

Have to develop a vocabulary in ordinary English

Three things the society should do:

• (1) Journal that is addressed to users
• Little to do with application, and how we practice
• (2) International conferences with local issues(2) Develop international conferences, addressed to users
• Bad amateur philosophy
• (3) Author must answer the "so what" answer: what change in behaviour is required