DISCUSSION 2 NEW TERM

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F E A T U R E

Building a Systems Thinking Culture at Ford Motor Company By Jeremy Seligman

M

Jeremy Seligman

any of us in the systems thinking (ST) and organizational learning communities any of us in the systems thinking (ST) and organizational learning communities have experienced frustration in creating sustainable communities of practice in have experienced frustration in creating sustainable communities of practice in corporate environments. Sharing that frustration with each other has generated corporate environments. Sharing that frustration with each other has generated

much reflection and dialogue as to why these efforts are so consistently challenging. It can much reflection and dialogue as to why these efforts are so consistently challenging. It can be disappointing to return years later to the site of initiatives – many of which were under- taken with substantial initial internal support and the best resources on the planet – to find little evidence of either measurable benefits or ongoing active practice fields. The benefits of practicing systems thinking – gaining an understanding of the dynamics of a system and how to intervene in it successfully – are incontrovertible. Yet sometimes it seems doubtful that ST will ever gain the critical mass required to make it an integral part of how major corporations practice strategic thinking.

The Legacy of Systems Thinking at Ford There was already a rich history of systems thinking at Ford Motor Company when I arrived there as a consultant to the information technology (IT) group in early 2001, although I was not aware of this at the time. When word began to spread that there was a consultant on site who was asking about and talking about systems thinking, people quietly approached me, and hesitantly revealed that they too were systems thinkers, but that we probably ought to close the door if we wanted to continue the conversation. I found the behavior curious, and a little alarming, but over time I came to understand the behavior and the reasons behind it.

When I broached the subject of adding ST to the learning curriculum of IT at Ford, one of the survivors of the last ST era at Ford pulled me into a conference room to speak. Over time, we talked regularly, shared ideas, and learned to trust each other. It was clear that the chief information officer (CIO) was a strong supporter of ST, and slowly a small group coalesced around the idea of reinvigorating systems thinking in IT. We began to plan an approach to building capacity in the organization in a way that would be sustainable. We did not want to do anything that would reanimate Ford’s quiescent but vigilant “immune system,” the instinctive response of all organizations to reject anything “foreign” or new.

In the mid-1990s, Ford had opened its doors to Peter Senge, Russell Ackoff, Daniel Kim, and others in order to learn about ST and to apply it to an increasingly high-profile range of projects and programs. The story of that time is not the subject of this article, and it has been documented and reported elsewhere. It was an era that produced some remarkable results, including new model launches that were accomplished with better communication, less

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In the fall of 2003, Ford Motor Company’s Information Technology Group began to look at the organization’s fragmented IT infrastructure. This undertaking was named the “Edison Project” in hopes that it would “shed some light” on the complexities of the group’s business of warehousing, building, and transferring data through- out the company. Everyone agreed that IT fragmentation was a costly and time consuming issue that needed to be dealt with, but not on the definition of the problem trying to be solved. Some saw it as a problem of data integration across a shared network of servers. Others saw it as a problem of mixing legacy systems with modern day applications. And everyone had questions. How would they know if they were solving the “right” problem? In solving it, would they create a whole host of new issues? Were they willing to bet their reputation with the business on their instincts about the right solution?

The champion, or sponsor, of the project suggested taking a systemic approach so that the group could see the interrelations of the system and gain a better understanding of the issue. Participants in the project first created an accurate picture of Ford’s IT infrastructure. This included what the system looked like to customers, the complexity of the servers, and the complexity of the types of applications. Using systems thinking tools – which included causal loop diagrams and stock-and-flow computer models – helped them articulate and build a shared understanding of the (then-current state) of the organization’s IT infrastructure without assigning blame or trying to “fix” a problem.

Eventually team members identified leverage points within three main themes, all of which were critical for the integration project to be successful. One was “technology,” using factory-like, assembly-line processes that would help migrate existing applications and infrastructure smoothly into a new system. The second was called “adoption,” which included the social technology to support that migration. This involved long range activities such as working with customers beforehand to improve their willingness to submit their owned infrastructure, and early identification of related software applications to the group for integration. This work became very im- portant in building a trusting working relationship between IT and its customers in the business. The third theme was developing an understanding of the “network effect” benefits of infrastructure defragmentation. Once the team understood what the costs and benefits would be to the entire system – which had not been analyzed previously – it was easier to make the case for change to everyone who would be affected.

Initially many people thought that a change of this nature – integrating IT in a new, virtual, user-friendly environment – would be cost prohibitive. At Ford, IT is not strictly a cost center. Most funding for the Edison Project would need to come from business customers. Using systems tools demonstrated that despite a larger

The Edison Project The Edison Project The Edison Project

rework, and improved cost performance. The era also left its mark on a number of people at Ford, whose introduction to and deep immersion in ST forever changed their way of looking at the world and getting results at work.

Participants in these early efforts had some difficulties. Learning labs and coursework dur- ing this era were characterized by a “learning for the sake of learning” approach, without sufficient focus on real-world problems. As a result, many people walked away with trans- formational personal insights but little idea of how to apply these insights to their everyday work. Also, ST’s innovative approaches, new language, and challenges to existing mental models energized the company’s immune system, and over time, many of the initial champi- ons of the ST projects moved on to other positions within and outside the company. Those who remained came to feel that espousing the language and practices of ST was increasingly unacceptable, and even risky. In the words of one of these “survivors” with whom I subse- quently spoke, “We all went underground. There are more systems thinkers here than you know about, but they are not willing to come out of their caves yet.”

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Figure 1: Edison Service Environment: Adoption Rate

Applications

time to consolidate

Applications on

Consolidated Servers

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adoption rate

time to convert

OS conversion rate

average applications

time to commoditize

commoditization rate

time to virtualize

Applications on

Common OS

Applications on

Commodity Servers

Applications in Virtualized Enironment

virtualization rate

Potential Adopters Adopters

initial investment, the payback over time would be larger than expected. Armed with this information and a greater understanding of the system at large, group members were able to explain the change in a way that customers could understand, encouraging adoption of the new methodology, and allowing better partner- ships between IT and the business.

A New Champion The existing small band of practitioners had been doing some very limited ST work, but mostly behind the scenes and on small projects, given the sense they all shared of being medieval monks preserving the arts and sciences through the Dark Ages. Around, this time, in 2001, the then-new CIO Marv Adams sponsored several very high visibility ST-based analyses and began speaking to a broad range of audiences about what had been learned from the project, “openly” using causal loop diagrams (CLDs) and praising the benefits of ST as a way of seeing the bigger picture. Partially as a result of this and partially because the ST community was taking on more public projects, interest in the discipline began to increase throughout the IT community.

Adams, an engineer by training, had long been convinced of the power of a systems think- ing approach in understanding both information technology and business problems. He clearly saw that the problems endemic to large IT organizations could be understood as fail- ures to understand the whole system of which those problems were a part. The IT environ-

This stock-and-flow diagram (part of a larger model) helped the group see the probable impact of the rate at which customers adopted the new “commonization” of applications and servers. The develop- ment of the model pointed out the need for policies and measurements that could offset the “worse before better” syndrome that customers would experience as the systems changed. Intuitively, the group had understood there would be a savings, but the model made it clear that costs would rise immediately and more dramatically than anticipated. The model helped the group determine how to address those cost impacts, build a truer understanding of the benefits of the change, and position the business case more clearly – which helped build trust between IT and its customers, and increase the rate of adoption.

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Figure 2: Limits to Success

Productivity Improvement

Results Sponsorship

Number of Initiatives

Scope

Visibility

Customer Satisfaction

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R1

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This segment of a larger causal loop diagram shows that as customer satisfaction with the results of new projects increased, the demand for new, larger, and more visible proj- ects also increased, which decreased the productivity of the small group of people whose job it was to work on these projects.

ment has become immensely more complex in the last 20 years, but methods for coordination and control of this complex environment have not kept pace. One study was commissioned to use systems dynamics tools to look at an internal program designed to defragment the computing infrastructure. Although the program had made substantial progress in simplify- ing the computing environment, it was running up against many unanticipated obstacles, and the harder the team pushed to accelerate the program, the more it seemed to slow down. A systems thinking project produced a broader understanding of the causes of the resistance, and provided insights into how to intervene in the system and get things moving again. (See sidebar, “The Edison Project.”)

Dealing with “Limits to Success” As the success and positive reception of some of these early programs filtered through the organization, along with the recognition and support these programs were getting from the CIO, new ideas and project requests began to pour in. By mid-2004, our list of potential proj- ects totaled more than 75, but the resources available consisted of a small handful of people, only one of them truly dedicated to ST full time. This was a situation likely to produce a “limits to success” scenario (one of the most common system archetypes) and a probably fatal blow to the reemergence of ST at Ford.

Below is a map we put together to help us understand the phenomenon of our own limita- tions. As we saw this map, we began to realize a leverage point in the system: We needed more practitioners.

In response to this situation, we decided to focus all the efforts of the existing group on building capacity within the organization. This meant that we would decline almost all

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requests to take on new projects, except as a part of training or immersion experiences for which the primary outcome was new practice capability. When accepting a new project, we made it clear that unlike a typical IT project, this project came with no promises for any particular results or findings. The primary goal was learning; the secondary goal was results or intervention. This was not an easy concept to sell to the organization, as it strongly chal- lenged executives’ mental models of what a project was supposed to be.

Building Capacity for Systems Thinking The question, then, was “How do we go about building ST capacity in this very large cor- porate IT environment?” At this point in 2002, the team consisted of one full-time person, a small band of “ST survivors,” and some new volunteers. We agreed that we needed to accomplish two complementary goals.

First, we needed to create an awareness of ST basics across a broad band of the organiza- tion. This would require a comprehensive curriculum, and good broad-based learning resources. It would also require ways to sustain the learning, a part of which had to include opportunities to practice in relevant ways. Since then, we have created a comprehensive cur- riculum that looks at ST from three perspectives:

• The mechanics of ST, including the CLDs, archetypes, and methods for designing interventions.

• The ST theory, including looking at mental models.

• “Telling the Story,” learning how to package and communicate the lessons and findings of ST to the organization.

We created the curriculum, including learning objectives, activities, and resources, along a continuum leading the learner from initial acquisition of skills and knowledge to develop- ment of the ability to guide others and ultimately shape and foster the program in years to come. We have shared our work at several Society of Organizational Learning (SoL) forums, and continue to make substantial progress in establishing for the first time a phased, compre- hensive curriculum for teaching ST in the corporate environment.

The second goal of the program was to create an expanding base of advanced practitio- ners, who were able to lead ST projects, design interventions, and eventually teach and lead others in building their capacity. It was immediately obvious to us that these two goals were deeply intertwined and needed to be addressed systemically, but it was not immediately obvi- ous how that was to be accomplished. That’s where the Multidisciplinary Action Projects (MAP) came in, and provided an important key to building ST capacity at Ford.

Through our partnership with the University of Michigan, we had been hosting a group of graduate students from the business school in seven-week internships. Three years ago we conducted the first session in what has developed into a unique internship experience for the U of M students. This internship program, named MAP by the university, involved a team of students given a project to work on, typically an analysis of a program or process at the sponsoring company’s site with recommendations for improving the project due as a final report. Many corporations have been partnering with the university for more than 10 years in offering these types of opportunities to the graduate students. Potential proj- ects are displayed at a fair each year, and students bid on the engagements in which they are most interested.

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We broke this mold by engaging the students in seven weeks of intensive ST training, and although this was centered on some relevant business issue, the desired outcome was new systems thinkers, not a specific solution to the problem, which was offered up mostly as grist for the ST mill. The focus of this effort was action learning. Students would learn about the

“Ladder of Inference” tool, for example, and immediately apply the concept to the data-gathering stage. Powerful results ensued when students were able to apply a tool to a real-world situation, note the results, and look for addi- tional business issues to tackle, such as finance, purchasing, or other business units we thought had minimal input to the opportunity we were addressing.

It was more than a little interesting to us that the MAP students, when transplanted from their collegiate setting to Ford, were able to go through the transformation required to understand the notion of mental models, examine and question their own, coalesce as a group, and learn to analyze and under- stand complex issues from the perspective of a systems thinker in a very short time. Further, the team noted with a mix of elation and curiosity that the presentations the MAP students made to the senior IT team produced the Holy Grail of ST outcomes: great dialogue and a mood of reflection among

the senior team. These are the gateways to more informed decision making. We realized that we now had all the elements we needed to produce an integrated cur-

riculum and approach to ST at Ford. We proposed and got support for a series of MAP-like programs for Ford IT. These Ford–MAP (FMAP) programs would pull a small number of employees out of their regular work for as much as 15 weeks, during which time they would be led and coached through an intensive immersion in systems thinking basics, and would work through the sequential steps of an ST project. Upon completion of the FMAP experi- ence they would return to their everyday work, but their problem solving tool set would have the additional skill of systems thinking. At present our constraint for these FMAP sessions was the numbers of coaches we had to each and lead the course; however we are getting fairly clever and adaptable at our timing without compromising the quality of the results. Recently I had a conversation with one of the FMAP groups. They were nearing the end of their project, and wanted to discuss how to make the transition back to the “real world” of day-to-day IT. They were concerned with how to deal with the corporate immune system, and we were able to strategize together about how they could take what they had learned and embed it in their work and approach to problems.

I fully believe that we are building a small core of people inside IT who will never be able to look at problem-solving with a linear approach again, who will always seek to ask the deeper, more systemic questions, and who will look for the intended and unintended conse- quences of every decision. Whether we will ultimately anchor ST in the Ford IT organization is still an open question, and of course will never be answered definitively. The word orga- nization shares the same etymological root as organism, and like organisms, organizations change over time, responding and adapting to their environments in ways that will determine their survival or extinction. We recently had conversations with the organizational develop- ment group of a company once widely known for its ST practice, of which there is little trace today. We understand that sustainability is a quality that can and should be part of the design of such a practice. However, in the final analysis it is an emergent phenomenon that will depend on a number of factors not always within our control, including changes in leader- ship and the broader business environment.

The presentations

produced the

Holy Grail of ST

outcomes: great

dialogue and a

mood of reflection

among the

senior team.

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Ford is much like other large corporations in its fondness for large programs designed to cascade a methodology or culture change initiative through the organization. It is our obser- vation that the failure of ST to take hold and grow roots in large organizations has in part been because we practitioners of ST have forgotten the insights we ourselves developed over the years: The result of a great ST project is not a set of elegant causal loop diagrams, but a new capacity for reflective dialogue, deep insight, and shifting entrenched mental models. This is often a long, painstaking, and slow process, achieved through numerous challenging and carefully crafted conversations led by skilled, experienced, and compassionate practitio- ners. However, when it comes to teaching ST itself to an organization, we may forget these lessons, and rely on the power that we have seen in ST to be inherently knowable and equally attractive to the organization and the people within it. This is almost never the case, since any approach that challenges entrenched mental models, disturbs patterns of power and influence, or potentially exposes faulty thinking or causes embarrassment is certain to produce significant resistance and even active suppression.

It is too early to conclude that ST will become an ongoing integral part of how we under- stand our environment and make decisions at Ford, and perhaps it’s best never to make that sort of conclusion in a complex dynamic system such as a large corporation. But it has been our experience that it is possible to energize an organization with the practice of systems thinking even in the aftermath of a difficult period. Indeed, the failures of the past may pro- vide the very embers that systems thinking can fan into full blaze.

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Understand your history

There is no ideal, perfect, or correct plan or template for rolling out ST in an organization. Every situation is unique and can best be understood as the aggregate of all the history and conditions that came before.

• What has the response to change programs typically been? • What has the attitude to learning been in the company? • Has ST made an appearance before? What was the reaction

Respect and appreciate the current state of the people in the organization

People love change, but they hate to be changed. Base your strategy on what the likely response will be to each part of the program, and don’t try to overcome resistance. Appreciate the resistance and give people a chance to do more of what they find satisfying and nonthreatening.

• What is the pervasive mood of the organization? • What events have taken place that might have built resistance to the introduction of an ST initiative? • Have you spent sufficient time understanding the existing mental models of the potential participants? • What small successes have occurred that you could leverage to bring ST practices into play?

Create the conditions for self-reflection inside a safe practice field

Building a safe and collegial environment multiplies the chances of people examining and shifting their own mental models a hundredfold, which will increase the impact of the work on both the individuals and the organization immeasurably.

• Can you make and accept provisional findings without fear of the “failure” label? • What does it mean to truly practice, allow yourself to think about new ideas out loud, and invite others

to share and build them with you?

Take the deep structures into account

The larger, older, and more traditional the organization, the more you will discover deep structures that produce patterns of behavior that explain the resistance to change you will encounter. Don’t fight deep structures unless they are in your circle of control. Understand them, however, and you will know how to create micro-changes that over time can and will reach a critical mass that will impact and shift the structures.

• From an ST perspective, what are the deep structures, which will inevitably reproduce the same patterns of behavior within the organization?

• Can you intervene in those structures, or should you take them as givens, providing a set of strategic guideposts for designing your interventions?

Look for similar or parallel successes in the organization, and seek to leverage them

Spend more time studying successes than failures. Failures are enlightening in telling you which paths are likely to be blocked. Successes indicate which paths may be open to you.

• Can you think of a time in your organization when people embraced a new idea, method, or tool? What characterized that time?

• What are the ways that you can get a pilot program going in your company with the fewest bureaucratic hurdles or layers of approval?

Guidelines for Practicing Systems ThinkingGuidelines for Practicing Systems ThinkingGuidelines for Practicing Systems Thinking

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Concentrate on building capacity rather than achieving results or completing projects

In one of our projects, the participants didn’t draw a CLD until practically the last day, but this group has produced some of the most committed systems thinkers to come from any group. To be overly focused on the product and not the process will inevitably produce bad results and fail to teach the core lessons of ST.

• Have you clearly communicated the purpose of your project to the sponsors and the organization? • Have you identified people within the organization who are likely to become practitioners, and concentrated

your early efforts on them?

Create a “pull” program by concentrating on small groups of early adopters.

Large cascaded programs are an invitation to the immune system to go into overdrive. Start quietly, with people who are interested and willing to commit, and don’t be in a hurry. Remember that immune system!

• Who will sponsor an initial pilot, whether it is under the radar or on the screen? • Is there a group of alternative thinkers, survivors of an unsustained major change initiative, or a group

that already meets to discuss ways to improve the work environment that you can connect with?

A B O U T T H E A U T H O R

Jeremy Seligman is director, Information Technology (IT) Strategy and Organizational Development,

Ford Motor Company, a position he was appointed to in 2005. After time spent in teaching and as a

professional musician, Seligman began his business career at Xerox in Finance and later in Information

Systems, then moved to Frontier Communications, where he was appointed CIO in 1997. A two-time

graduate of the University of Rochester (with a bachelor’s degree in Education and an MBA in Finance

and Economics), he is a lifelong student of organizational dynamics and change and is a member of

the Founding SoL Council of Trustees.

[email protected]