The logic for the existence of any element in a system is derived from the other elements and their interconnections.
In the last article we had mentioned about how each element is connected, with varying intensities, to other elements in a system. An element or a collection of elements in a system, which is a unified entity, cannot be handled without considering relevant interconnections within the same system. As an integral part of a system an element plays a clear role and that is the first aspect that we need to understand in the process of managing the element.
EXISTENTIAL LOGIC
The logic for the existence of any element in a system is derived from the other elements and their interconnections. For instance, if constituents collectively create a logic for the establishment of a sports academy in a particular ‘society-geography’ combine, it will be developed. Forces will collaborate to facilitate its construction and even if we dismantle this institute, it will again come up in some form or the other. If, however, we construct an academy whose existence is not justified by the logic of the system it will either waste away or operate at sub optimal levels till the logic itself changes. An instance of this was evidenced by the spread of digital transactions during the lockdown period. The government had been encouraging use of digital methods in our daily transactions but actual growth was sluggish, at best. As soon as lockdown was declared however, logic for digital transactions was strengthened and adoption increased substantially. Accordingly, when a new venture is attempted its relevance to the context needs to be assessed. In such cases organizational goals are articulated but not the underlying internal logic of the relevant system, which is a much more difficult task. Witness, for instance, the number of unsuccessful start-ups. There could, obviously, be several causes for failure and the cause could reside in any one of the several aspects of management involved in operating the organization, but a certain part of such cases can be attributed to non-appreciation of the internal logic and hence, inadvertently, moving against the logic.
ROLES IN A SYSTEM
An organization is also a system and each department has a role to play just like in the earlier examples. As mentioned, the role of each department derives from the internal logic of the system, in this case that of the organization. For a large system like a particular combination of ‘society-geography’ determining the logic is far more difficult than it is for an organization that is bounded and operating with predefined goals. However, even that is a complicated matter particularly for large corporations. A quick understanding of the system under study is needed before deriving the role and when we are committed to a holistic approach, quite naturally this process will be different from that adopted by traditional methods.
CONTRASTING APPROACHES
In our conventional approach when we wish to study and comprehend any system, we find out what it does and then we study its parts to ascertain the role each part plays in the operation of this system. For instance, if we were to study an automobile, we would first find out what the system does – carries goods and people from one place to another. The next step to find out its components — engine, gear, brakes, clutch, accelerator, radiator and so on. Following this we painstakingly discover what is actually done by these components and thereby gain an understanding of the vehicle as a whole.
When one adopts a holistic approach to understanding any system the method is materially different to the one narrated above. As mentioned earlier in adopting a holistic or systems approach any meaningful study has to commence with, not only the entity under study, but the context as well. After all, in a very real sense, the context lends legitimacy to its existence. Accordingly, the first attempt is to understand the context in which this system (the one under study) operates. In other words we shall, to begin, acquaint ourselves with the larger system that contains the system that is under study. A system is usually contained in a larger enveloping system, in the form of a recursive model. Accordingly, in order to study any system, we need to study the enveloping system first and identify the role from there. Evaluation of performance is then compared with the role so ascertained. Let me explain this with an example.
ILLUSTRATION OF CONTRASTING ROLES
Consider for instance, the public transport system of a city. It comprises not only buses, trams, city trains, cabs and rickshaws but traffic management systems, transport regulatory authority and associated work procedures, road and rail network management, commuters, passengers etc. Now if we are to study; say the efficacy of the bus system then it has to assessed in the context of the transport system’s objectives. These objectives are for that society in which the transport system is embedded. Now if, say, we need to assess the performance of the bus system; in our traditional method we would ascertain the efficiency through evaluating certain operational parameters such as passenger-kms or ton-kms, fuel consumption per km, number of breakdowns, collections, profits, employees per passenger-kms and so forth. Systems approach will however, first identify the objectives of the transport system in the context of the enveloping system – the society-geography combine and evaluate performance in the light of those objectives. For instance, taking just two examples, does the system cater to the lower income groups, who need public transport more? What share of the routes are through those areas where there is a predominance of such people. A second one could be vehicle pollution that is a common menace in most cities and a public transport system should not be responsible for exacerbating the problem. Accordingly, the investigation will check whether adequate steps, like procuring fuel efficient and/or electric vehicles, proper maintenance of vehicles, appropriate training of drivers and so on, are being taken. The importance of these factors derives from the context and defines the contours of the role which, as can be seen, is much more than operating a fleet of buses in the city.
HOW DO THE TWO APPROACHES COMPARE?
Based on the argument presented above we find that there are fundamental differences between the outcomes of the two diverse approaches. While in one case evaluation of performance is based on comparing actual performance with design parameters of the system, in the other we assess the extent to which this particular element under scrutiny facilitates meeting objectives of the overarching system. Once this evaluation is completed, in the latter case, we would review performance as in the traditional way of passenger-kms, fuel consumption and so on. A cursory assessment of the two reveals an interesting fact: traditional approach is perfect for evaluating performance of machines wherein there is complete and a priori knowledge of its functioning while systems approach is ideally suited to understand fully a societal entity. In the case of a machine its performance is as designed while in the latter case its functioning is fraught with uncertainties and is highly contextual.
A legitimate question that arises at this juncture is how does this knowledge help in managing an organization better? That is precisely what we shall discuss in the coming articles.
Prashun Dutta
Prashun has around 35 years of varied corporate experience, former CIO at Reliance Infrastructure and Tata Power, an Electrical Engineer and a fellow in Management of the IIM(C). He is well known for his contribution to the electric utility sector where the systems implemented by him at RInfra and Tata Power have been adopted throughout the country. He is now a freelancing consultant to corporates.
