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The phrase “short-termism” was coined to describe the financial markets’ focus on quarterly reports and quick profits at the expense of long-term value and sustainability. In organizational change initiatives, we often see something similar: quick fixes applied to urgent problems—or problem symptoms— that ultimately undermine the initiative. Last July, I wrote about applying systems thinking to break the cycle of short-termism. Recall that systems thinking is a tool to help clarify the underlying interactions and interrelationships that cause the everyday events that we experience. Seeing and understanding this causal structure improves decision making by demonstrating both the short-term and long-term effects that can result from any decision.
System thinkers have developed archetypes that are structures of links and feedback loops that can explain patterns of system performance. Archetypes are powerful because they can be applied to many varying situations. Last July's post outlined the insight that the “Fixes that Fail” archetype can provide for a decision to hire expertise to implement a change. The significance of “Fixes that Fail” goes beyond exposing potential problems with hiring decisions. Using the feedback loops and interactions of the archetype, you can unpack the circumstances that cause other problems to recur or worsen even after a solution has been applied.
Consider the example of a company with a large department that provided technical support for two different product lines. Inefficiencies due to misalignment between the requirements of the support department and those of the product lines drove up operating costs. The company reorganized to address these inefficiencies. They divided the support department in two and merged the separate parts into the product lines they supported. The initiative was designed as a cost-cutting measure—to align the reporting structure of the technical specialists with the area they supported. With this cost-cutting mindset, one of the first actions was to eliminate administrative positions. Eliminating admins had a short-term cost-cutting effect, as desired.
However (with or without the designated staff), the admins’ work still had to be done, and it fell on the technical specialists. With added responsibilities, the specialists inevitably pushed some of their own work to the back burner, sometimes waiting until pressure came from their internal customers. These delays put too much work on a rush basis, and the quality suffered. Lower quality caused increased rework, which led to added costs. Basically the quick fix itself —eliminating admin positions to cut costs—resulted in higher costs in the long run.
The “Fixes that Fail” archetype, shown in the inset, illustrates both long- and short-term effects of a decision. The upper loop shows the relationship between the level of the costs and eliminating admins. The higher the costs, the greater the tendency to eliminate admins. The more admin positions eliminated, the lower the costs. (The dashed lines indicate that more of one leads to less of the other, i.e., more eliminating leads to less cost.) In the short term, eliminating admin positions reduces costs. The bottom loop shows the longer term side effects. The more admin positions eliminated, the more the specialists have to take up the slack, which causes a reduced level of quality. Lower quality increases the amount of rework, which ultimately increases the level of costs—yielding a temptation to eliminate even more positions.
The power of the “Fixes that Fail” diagram is to show clearly that, with time, the initial problem (high costs) was made worse by the quick fix (eliminating admins). It took time for the increased costs caused by the specialists doing administrative work to accumulate, so the connection isn’t immediately obvious. Without the archetype diagram, it is tempting to believe that the increased costs came despite eliminating admins, but the diagram shows that it resulted from eliminating admins. “Fixes that Fail” makes this relationship obvious. It doesn’t deny the problem, which is high costs; rather, it opens the discussion to other ways to address it with fewer unintended consequences. Any time a problem persists or worsens after a fix that initially seems to address it, look for the “Fixes that Fail” structure underlying the problem.
About the Author
Dr. Andrea Shapiro
Andrea Shapiro, PhD, is founder and principal of Strategy Perspective. She brings a unique perspective to organizational change based on experience in software development, business modeling, management, and organizational learning and development. Andrea designed and developed the Tipping Point computer simulation, which forms the heart of the Change, Dialogue, and Action Workshop. She has delivered the Workshop to major corporations, non-profits, and government agencies in the United States, Canada, and Europe, and has accredited hundreds of change leaders and consultants to deliver the workshop worldwide in their own work in organizational change. Her book Creating Contagious Commitment gives detailed real-life examples, theory, and background, all of which will appeal to any manager faced with implementing a significant organizational change.
After earning master’s degrees in mathematics and psychology and a doctorate in behavioral decision making, Andrea went on to further studies at the Coaches Institute and the MIT Sloan Business School executive education program in system dynamics. She has also served on the Graduate Faculty at UNC Chapel Hill and taught decision making at Pfeiffer University’s graduate program in organizational management. Andrea can be reached through StrategyPerspective.com or you can follow her on Twitter or LinkedIn.