Dr. Pravir Malik is the Chief Strategy Officer of Galaxiez. His expertise is in creating solutions using Systems Science.
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In the previous article in this series, I had suggested that complexity is a two-sided coin. So long as it is managed, it can become a real asset for a company because it endows an organization with adaptability and the ability to meet even very difficult situations. On the other hand, it is easy for complexity to rise needlessly and become a crippling liability for an organization.
In this article, I want to focus on various underlying structures, usually inadvertently created, that add unnecessary complexity to an organization.
At the heart of these inadvertent underlying structures lies short-term compensations that take the shape of balancing and reinforcing loops. A loop implies that something in the organization — whether a person, team or business unit, among other possibilities — gets reconnected to itself, usually through connecting to at least one person, team or business unit. So, simply, two people working with each other form a loop. If it is a balancing loop this implies that some action by the first person remains in check due to pressure from the second. This contrasts with a reinforcing loop where action by the first person may increase due to encouragement from the second.
In a living system though, such loops are not always intentionally put in place and can have a counter effect on the goals that an organization may have. It is the existence of such loops that are often responsible for an organization experiencing the same problem again and again. Unless you can detect and then change these underlying structures, the likelihood of the recurring problem being solved is minimal.
Short-Term Solutions That Fail
Nobody ever wants to put in place a solution that will fail. However, this happens often, and usually, there is a predictable underlying structure to it. This underlying structure usually starts when we focus all our attention on the problem that has surfaced. In the rush to come up with a quick solution, it is easy to address the problem at the level of a symptom, instead of going deeper into the root of why it exists.
Now, this will create a quick fix. So, as the problem surfaces, you deploy a quick fix, and in the short term, the surfacing of the problem reduces for a while. You, therefore, have put a deliberate balancing loop in place. However, the quick fix will likely have unintended consequences, which adds an unintentional reinforcing loop that will cause an increase in the initial problem.
Consider an example of this structure where the initial problem is decreasing employee engagement. Now, this issue may have some deep reasons for existing, but the quick fix may be to throw some money at the problem by giving a monetary bonus to those affected. This may solve the disengagement problem in the short term, but it will likely have the unintended consequence of employees expecting monetary handouts whenever disengagement increases.
Not handing these out regularly could then cause disengagement, so that the initiating problem increases instead of decreases. This set of unintended actions is an example of a reinforcing loop because the initial problem of disengagement causes an increase in a monetary handout, which then determines the level of engagement.
The underlying structure then is a balancing loop coupled with a reinforcing loop. Recognizing this underlying structure, wherever it exists, will point to a debilitating pattern that has inadvertently been put in place. When HR leaders recognize the effects of this underlying structure, they can proactively solve problems that many times were not even known to exist.
Growth And Deceleration
Every organization is subject to limits to growth, which is our next underlying structure. The primary loop in this pattern is a reinforcing loop that connects together "efforts" and "results." Hence, as effort increases results will correspondingly increase, and as results increase there will be more effort to further increase results. This is a reinforcing loop because effort increases results, and results correspondingly increase effort. In reality, though, the dynamic of accelerating growth will likely reach the limit of the organization's capacity, which, in turn, will cause the accelerating growth to begin to decelerate.
This means that a second balancing loop causes the deceleration. This loop can be thought of as results being tempered by some "slowing action." As results increase, due to efforts in the primary reinforcing loop, the capacity of the organization to continue to contribute to the result in question is reached, and there is a corresponding increase in the slowing action. As slowing action increases the ability of the organization to deliver results decreases. Hence a balancing loop is put into place.
When HR leaders don't recognize this underlying structure, though, an organization will continue to increase efforts to obtain results. When results are not obtained, because of the hidden balancing loop, this will likely result in leaders getting upset and general stress in the organization increasing exponentially. If, however, leaders correctly see this interlinking structure of growth and deceleration, then they can put in place the right set of remedies to create more sustainable growth.
In any organization — which in reality is a complex system where people, teams, business units, processes, policies, technology and so on are connected together in unexpected ways — it is inevitable that unforeseen and unexpected underlying structures will exist. When HR begins to clearly see these hidden underlying structures and then change them, they endow an organization with increased resilience.
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