Beware unexpected outcomes

Even experienced managers can’t always correctly anticipate the unintended consequences of their decisions and strategies. So now, University of Auckland Business School researcher is collaborating with Massachusetts Institute of Technology (MIT) and Harvard researchers to test the way managers and professionals make decisions in complex systems or situations.
Recently published research from Harvard and MIT into “systems thinking” shows that delays in decision-making, and misinterpretation of feedback, exacerbate unintended outcomes in both small and large companies.
Now professor Kambiz Maani, head of The University of Auckland Business School at Tamaki, is conducting similar experiments with New Zealand managers and students. “At the core of this study is the notion that the complex nature of business, government and society hampers the ability of managers to see the underlying forces that affect their organisations’ performances,” says Maani.
“These complexities usually arise from relationships: amongst people, departments, divisions, organisations and cultures. The more interactions or relationships in system, the more complex the system is. In reality system such as company, community or society, is the ‘product’ or outcome of the interaction of its elements. Yet managers often tend to focus on things – assets and other tangibles – at the cost of ignoring interactions and relationships.
“Systems thinking, new management paradigm based on modern sciences, demonstrates that no decision has single, isolated and desirable outcome. Each part of system impacts on every other part, so by altering one part of system chain reaction is set off in other parts.”
Maani’s research experiments are based on everyday life situations. They require the participants to answer questions relating to some ‘common-sense’ scenarios, such as the rate at which people enter and leave department store, money deposited and withdrawn from savings account, or levels of production and sales in manufacturing firm. The questions are designed to be answered on ‘first impressions’ basis and test the subject’s ability to recognise patterns.
All the above examples have common ‘structure’ – an underlying relationship – that is often missed by the participants. Understanding this structure requires systems thinking.
Maani and Dr Robert Cavana from Victoria University have published New Zealand-based book on the topic, Systems Thinking and Modelling – Understanding Change and Complexity. According to the author it is selling well overseas and already being used by overseas universities and major corporations such as Ford and General Motors.