Data Analysis and Discussion – The ‘Systems Thinking’ Element of the Contractor LO

9.1 Introduction

Senge et al’s (1990, 1994) LO model noted Systems Thinking as the broadest discipline which acts as a cornerstone for the other four, bringing the concept of the LO together as a coherent model. The basic premise of Systems Thinking is that the organization has to understand that its mechanisms are a complex and dynamic set of systems to which simple ‘fixes’ cannot be applied. Senge et al (1990, 1994) further suggests that many organizations do not fully understand the implications of their actions in that cause and effect are often assumed to be adjacent in time and space, but are not. Understanding the wider systems and how these systems react following a change is seen to be of paramount importance in the LO.

In order to assess the presence of Systems Thinking, the research reported in this thesis looked for the contracting organizations’ ability against seven factors considered to be important for systems thinking. First is the ability to align individual roles. Second is the need to ensure co-ordination of processes within the organization to decrease the risk of internal systems working against each other. Third is Benchmarking organizational performance/systems against peer group which is important in order to understand wider business performance as opposed to simple inwardly-facing assessment. Fourth, setting up necessary learning loops such that the organization effectively learns how its actions affect its performance is assessed.

Fifth, the ability to flex and adapt to the changing business environment without needing to overhaul the business is another important area and is explored in the flexibility section. Sixth (say what needs to be said about support services here) Seventh is a clear understating about how the contractors’ actions affect their customers is explored, which took Systems Thinking beyond the confines of the organization and out into Systems Thinking about the customer element of the supply chain.

Each of the elements mentioned in the preceding paragraph are analyzed and discussed through the reflection of the observations within the six nominated contractors. Reflection is done not only against the back drop of Senge et al’s (1990, 1994) work, but broader work from within and without the construction industry.

Whilst Systems Thinking as a discipline within the LO model from Senge et al’s (1990, 1994) is not challenged within this chapter, it is important for credibility and

rigour to analyze and discussion the findings against the detailed, and more recent works referenced herein.

9.2 Align individual roles

Senge et al (1990, 1994) noted that organizations which display Systems Thinking should not have individual roles or departments working against each other. In addition, there should be exercises carried out at a problem-solving level to establish whether root causes of problems are not departments working diametrically to opposed goals. Senge et al (1990, 1994) provides examples of such incidences of misalignment such as purchasing departments whose role is to provide lowest capital cost parts (regardless of quality) to an assembly line whose role is to assemble a best quality product. Another example is seen to be a sales team whose role is to bring in new customers by offering any special deal necessary, then passing customers on to service delivery people whose role is to provide a defined service regardless of the sales deal offered to the customer.

9.2.1 Cincinnati

Cincinnati ensured that roles were renewed regularly on the basis of their current relevance. However, such changes were generally not well received by the individuals who considered such changes as a bit of a ‘paper exercise’ and, as such, not adding the value for which senior management planned. In addition, there appeared to be gaps where it was suggested that better role alignment might help organizational performance. One area where this type of job design had come in useful was in administrative roles in terms of ensuring there was no gap or overlap between roles.

Its leader noted an example:

“…what we did was say “Look, write down what each of the guys do and then we’ll sit down and say “Right, that’s Dave’s responsibility, that’s Sue’s responsibility” and they know where we’re going…”

It appeared that there was little supporting literature to suggest what best practice role alignment within an organization should look like. Senge et al (1990, 1994) noted that without alignment of roles, Systems Thinking (and Shared Vision) was impossible, but offered no real practical roadmap to accomplish it. More recently, Anderson et al (2001) developed a system to measure alignment, but this was between two distinct organizations.

In addition, Cincinnati used its succession planning process to help individuals align.

When looking at moving an individual into its line manager’s role, Cincinnati asked them to respond to a set of questions to test current understanding of the role they were about to fill. The answers to the questions helped identify what gap in knowledge existed to be filled by the business before the individual can adopt that role successfully. The questions used were along the lines of:

“What do you need from me to help you step up to this job?” and “If you were going to replace me, what would you do?”

Candidates were also asked to grade themselves as honestly as possible in terms of what areas they were relatively strong and weak on in terms of the new role so that an individual improvement plan could be put in place to prepare the individual for their new role. Cincinnati’s succession planning therefore appeared to approach current best practice thinking (following Groves, 2007; Hills, 2009).

When aligning the roles within the business itself, the focus group suggested that there was still work to do within the organization. For example, it accepted that there were still issues with the alignment between the estimating and commercial departments. There was an issue with the handover between the estimators and the commercial managers in terms of ensuring estimates were adequate for the project to be managed commercially, as suggested by one member of the focus group who said:

“…the final bastion sort of defence, is between estimating and commercial.

Where the estimators tend to go through to when we price a job, and then the commercial guys take it on board.”

However, there was a management acceptance of this problem within Cincinnati and it was being examined for a solution. In addition, Cincinnati suggested that a lot of roles were fluid in nature and tended to come and go as the Pittsburgh work needed them to operate. Cincinnati had not assessed how successful these roles had been. It tried to remain fairly traditional in terms of the roles people adopted within the Cincinnati structure and tried to avoid ‘blue sky’ thinking in this area.

There was, however, a worrying hubris to the rest of Cincinnati’s role alignment. It was happy to state that it thought that its approach was correct because organizational performance was good. There appeared to be little appetite to experiment with service delivery in this area. The approach appeared to contradict

Cincinnati’s earlier message about experimentation being encouraged. Harris (2002) noted a similar complacency to organizational learning within the banking sector.

9.2.2 Indianapolis

Indianapolis was trying to move away from the relatively rigid structure in place to a more fluid one. The reasoning was that Indianapolis did not want its employees to become focussed upon their title, but more focussed upon serving customers. One of its directors noted:

“We are trying not to badge what we are trying to do. We’ve been driven recently by this structure. What I want to try to get back to is not having structure…”

This desire meant that Indianapolis tried to align its roles to its organizational focus upon being as flexible as possible. The approach appeared to be a move towards the self-directed work team suggested by Roper (2007) and allowed it to more easily take up and release slack in the workload without paying for people to be unproductive or having to hire more employees when work materialized. Flexibility enabled it to be more efficient for its customers through a minimization of waste.

Indianapolis’ approach to personnel alignment could be reflected back to its wider approach to flexibility noted in section 10.6.

In addition, Indianapolis felt that its approach prevented the hierarchical nature which organizations naturally gravitate towards, as people without titles were less likely to adopt ‘expected’ behaviours. One of the directors stated:

“…everyone hates the ‘sparkies’ and it goes into the professional field as well. You know “oh the bloody architect” and stuff like that.”

An example given was where it had combined its consultant architects, designers and engineers into one self-managed design team (following Roper, 2007) and dealt with one representative on that team. Indianapolis had removed the need to act as

‘referee’ between consultants blaming each other for any project failings.

Indianapolis was open about the fact that it developed its people in a way which made them marketable on the employment market. This was an interesting perspective which suggested that Indianapolis had accepted churn as part of the natural order of business. Its approach was to manage churn rather than to prevent it (following Siebert & Zubanov, 2009). In addition, Indianapolis ensured that those

who wished to remain in a certain role or level could do so. It was clear from the MD that those who wished to be an “…absolute ten out of ten job surveyor…but does not want to be a managing surveyor…” were just as important to the organization.

Therefore it allowed individuals to align a non-managerial career path to the organization’s goals.

9.2.3 Chicago

Chicago’s directors talked about hiring the best people and then spending time with them to ensure that the organization understood their view of the world. Additionally, they took a ‘rational economic man’ (discussed in Morgan, 2006) view of employees needs. One Director stated:

“...[employees] think more with their pockets probably than they do with anything else. So the thing you must have in place is a remuneration policy that is aligned with the outputs you require.”

This statement suggested that there may not quite be a Systems Thinking culture within Chicago, but that it understood that the correct motivation needed to be in place from the organization in order to best align individuals.

A further problem had been “…weeding out the [new hires] that don’t work out…”

which Chicago’s directors suggested had not been successful. The MD suggested that he could identify those who were not of the right ‘type’ to succeed at Chicago within the first two months of employment. He was not, however, often strong enough to speak to them and suggest that it was not in everyone’s best interest that they continue to work there. It was suggested that this was also because if these new hires did not align with the culture, then they too could be seen to have had a poor experience (following Da Silva et al, 2010). This position was echoed by the focus group, who suggested there were those that did not ‘fit’ and who did not stay within the business very long. It may be argued that such a position suggests a potential recruitment practice problem. Systems Thinking, however, embodied a whole of organizational approach and therefore a recruitment problem suggestseda deeper problem within Chicago’s system which had not been addressed.

Chicago’s MD suggested, however, that Chicago’s culture had grown out of the people who had joined over the years, commenting: