Inspired by a post by Joan Lurie on systemic organizational paradigm shifts, I’d like to share a few reflections on my experience of applying a systemic approach in a large organization’s transformation efforts.
In today’s organizations, it’s been assumed that there are two ways to achieve goals and bring about change. 1) ‘fix’ the technical – the organizational structures, processes, technology, perf/reward systems, products etc. 2) ‘fix’ the people – their values, styles, skills, behaviors etc.
Yet these approaches in a singular setting won’t yield the desired impact.
In this article, I share my personal experience of using systemic approaches that focus on identifying leverage points within the system to enable its evolution, rather than simply implementing singular change initiatives.
The organization is the commercial arm of a large pharma company, operating in complex healthcare ecosystems across over 89 countries.
To achieve the ambitious goal of doubling patient benefit with less societal cost, the organization needs to adopt new radical approaches to work across multiple therapeutic areas and decentralized markets. This requires the focus on accelerating innovation and transforming healthcare systems through increased collaboration. To support collaboration, we need to foster a more networked approach that enables the fluid transfer of talents and expertise across markets and therapeutic areas.
The assumption is that fostering people fluidity will enable more seamless cross-border collaboration, which will ultimately help the organization achieve its goal. This perspective can be viewed through the lens of systems theory, and to elevate our thinking from just seeing parts and linear interactions to seeing and understanding whole complex systems.
Transparency and understanding the organization’s collaboration landscape
To truly create meaningful change in complex systems, it’s important to approach interventions with a holistic perspective. Rather than jumping straight into action, we need to take the time to understand the underlying logic behind our approach. Instead of relying on traditional reductionist thinking to design specific programs or initiatives to improve collaboration, we strive for a broader understanding of the organization’s collaboration landscape. By being transparent and embracing a more holistic approach, we can identify powerful interventions that have a greater impact than singular initiatives.
We conducted a diagnostic Organizational Network Analysis (ONA), which indicated a level of collaboration of 5% between different markets with a predominantly fragile hub-spoke network. Assisted by the ONA, we were able to draw an organizational map, in which it can be clearly identified that the central connecting hub (global HQ) remains a critical role for connecting local affiliates.
Many markets were operating in isolation, lacking access to broader expertise and resources. Information sharing and learning rates were often quite low, with many falling well below external benchmarks. This makes it difficult for innovation to spread across the network. This created a high-risk situation with multiple points of potential failure, particularly if we were to increase the number of innovations without increasing personnel or resources.
Finding leverage points
The idea of leverage points was introduced by Donella Meadows in a paper where she proposed a scale of places to intervene in a system that would result in varying degrees of change within the overall organization. She started with the insight that there are levers or places within a complex system where a “small shift in one thing can produce big changes in everything.”
Through the lens of complex adaptive system theory and leveraging points, the Organizational Network Analysis (ONA) revealed the importance of cultural values in promoting collaboration. However, to effectively incorporate these values into the system, a deeper understanding of the specific cultural traits and behaviors needed to be identified. Therefore, we leveraged the positive deviants in collaboration, such as boundary spanners and energizers, who were recognized by their peers as central to collaboration. By identifying and codifying their behavior patterns, we were able to learn from them and amplify the solid cultural values around collaboration.
These Cultural Carriers could then serve as gateways to emergent and lasting interventions, leading to systemic shifts in collaboration and organizational culture.
We identified 8% of the employees as Cultural Carriers through the ONA, covering 13000 employees from 89 countries. Their peers recognized them as essential in the spread of innovation, new practices, behaviors, and technical expertise and knowledge crucial to the work of many individuals.
They also represented the employee population from many different countries, ethnically diverse, gender-balanced, and from all levels of the hierarchy.
The learnings from Cultural Carriers
We surveyed and interviewed 300 critical network connectors, boundary spanners, and energizers. Two teams of 8 Cultural Carriers volunteered to identify behavior patterns and design the principles that would guide all our actions in executing the interventions.
Together we envisioned creating an emergent and adaptive organizational system governed by principles. The six simple principles, encompassing behaviors supported by the company culture, were:
- We prioritize work based on outcome and impact on patients and customers (internal or external),
- We empower people to choose the work and how they contribute to it based on their skills, purpose, and intended development independent of their job description, function, or location,
- We make transparent to everyone the outcomes & the progress
- We make transparent to everyone people’s skills, intended development & current contribution.
- We intentionally include diverse perspectives in every working team
- We recognize and incentivize individuals and teams that connect, contribute and energize across internal and external networks to address patients’ and customers’ needs.
Interventions to foster organizational evolution based on the 6 principles
Another important belief that guided my work is emergence. Emergence is one of the central concepts within systems theory as it describes a universal process of becoming or creation. A process whereby novel features and properties emerge when we put elementary parts together as they interact and self-organize to create new patterns of organization.
As we identified these 6 principles, instead of taking a reductionist approach to change programs. We reflected on how we could create conditions in the system to foster emergent changes for the system to evolve.
We identified three pillars of execution based on systems theory and among other interventions prioritized based on the impact and urgency correlation:
- Strengthening the Network of Cultural Carriers
- Creating Conditions for an Opportunity Marketplace to enable fluidity of talents
- Fostering a learning culture that serves as the foundation for an adaptive organization
The 3 pillars aim to lay the groundwork for the system’s emergence as a cohesive force rather than separate entities. Our ultimate goal is to witness genuine emergence, where non-linear patterns can form. We hope that by fostering synergies between these foundational elements, self-organization and new patterns of collaboration will emerge, resulting in the formation of new levels of organization that are innovative and beneficial.
These pillars are identified based on our intuitions and understanding of systems theory, that fundamentally rests on a relational view of the world – that the connections between parts is our primary focus rather than focusing on the parts themselves.
First signals of progress
Based on the latest sensing exercise in 2022, cultural Carriers reported an increase on the quality of their relationships, working together on business challenges or in inspiring other colleagues on the practices of collaboration. Based on the ONA in 2022, 84% of the new connections among the Cultural Carriers are based on mutual help in stretched business challenges. This strong network translates in 5 times more innovation and better solutions to customers and patients.
In 12 months, we improved the visibility of employees’ skills and competencies from 4% to 70% in major markets. During the same period of 1 year, 3140 employees (24% of the working population), contributed to more than 600 self-managed teams in defined work projects.
This translates to the business impact of cost avoidance, accelerated knowledge exchange and people’s personal growth and development through fostering a learning organization.
Some learnings so far
- Holistic thinking instead of reductionist thinking: Reductionism and holism represent two distinct perspectives of sense making. Reductionism analyzes things by breaking them down into smaller, static parts and examining their linear interactions. Holism, on the other hand, takes a more comprehensive approach. Holism looks at things in a bigger picture, trying to understand how they work within their surroundings and how they are affected by their relationships with other things in that environment. In today’s world, it’s important to note that behind every reduction or analysis lies a complex and interconnected reality that can be better understood through a holistic lens.
- Relational view of the world. The 3 pillars all address relational aspects of the system and its parts, rather than the parts alone. Instead of a traditional way that is focused on the properties of “things” in isolation and how those things cause change through direct interactions. In contrast, when looking at the world through a relational paradigm we search for how interdependencies and networks of connections shape the properties and behavior of the parts.
- The art of finding leverage points: to truly influence a system, we must look beyond the surface and delve deep into the underlying patterns and structures that shape it. It’s easy to get lost by only focusing on observable events, but true leverage points lie beneath the surface. We need to peel away the layers of detail to uncover the fundamental mental models that guide an organization’s actions. By understanding these deeper levels, we can identify the most effective ways to create positive change in the system.
Growing up in China I’m naturally influenced by the Daoism philosophy of holistic sense making. Sometimes I use the analogy of acupuncture points, or the gardening analogy to understand what might be the most effective interventions to influence a complex system. Here a closing quote with the analogy of system’s gardening:
“[When dealing with complex adaptive systems] it is more helpful to think like a farmer than an engineer or architect… Engineers and architects need to design every detail of a system. This approach is possible because the responses of the component parts are mechanical and, therefore, predictable. In contrast, the farmer knows that he or she can do only so much. The farmer uses knowledge and evidence from past experience and desires an optimum crop. However, in the end, the farmer simply creates the conditions under which a good crop is possible. The outcome is an emergent property of the natural system and cannot be predicted in detail.”
Acknowledgments to my colleagues
Hemerson Paes whose vision and perseverance shaped much of the progress, without his inspirations and nudges, we could not have progressed to this extent. Many other colleagues whose effort and contributions collectively made the journey rewarding, e.g. Maron Demisse whose depth of thinking inspired me to join this effort; Jacob Watkins whose living system model and the influence of senior leadership engagement inspired many insights and momentum; Amanda McKean whose experience and system lens always brought fresh perspectives and Walt Renfree whose openness and leadership created space for such effort to happen. I realize as I reflect on the progress it is such a collective effort of so many people, with diverse capabilities. One thing we have in common is the passion to create a better workplace. I am grateful and hopeful going forward.