Transcript A systems thinking framework for problem solving and

A systems thinking
framework for problem
solving and design in
worker co-ops
2008 AGM & Conference of the
Canadian Worker Co-op
Federation
Ikiene
15th November 2008
Why systems thinking?
The name of the real devil
“The name of the real devil is sub-optimization:
Finding out the best way to do something
which should not be done at all”
Boulding, EK. 1970. Fun and games with the
Gross National Product. In The Role of
Misleading Indicators in Social Policy.
Why systems thinking?
The name of the real devil





Sub-optimisation is like putting the ladder against the wrong wall
for where you want to go
When the marketing department pushes the organisation to
produce a greater variety of products and services than can be
handled cost-effectively, the higher cost of production can be to
the detriment of the organisation as a whole.
Many organisations have experienced this kind of suboptimisation, pushing for the efficiency of parts of the
organisation at the expense of the whole.
More generally sub-optimisation is like solving the wrong
problem, or adopting a false solution due to a partial
understanding of the problem
The aim of systems thinking is to understand the functioning of
the organisation as a whole, the big picture. It’s wholistic thinking
Presentation Outline

An introduction to systems thinking

A systems thinking framework for problem solving

The Ideal design approach to problem solving

The potential role of the co-operative system in SubSahara Africa

Time for questions and discussion
An introduction
to
systems thinking
What is a system?

A systems is a discernible whole (Dostal, E. Et al)

A system is an organised whole (Dostal, E., Et al)

A system is anything that has a name (Vickers, 1983)

Examples of systems are: a person, a car, a co-op, a
company, a country

Let’s think of our co-op as the system being referred to
for the rest of this presentation
What is systems thinking?


A body of thought that describes the organisation and functioning of
systems
Systems thinking is based on a very specific view the world:


namely that the world is made of systems which relate to and interact with
each other, and that each such system is part of one or more larger systems,
and in turn consisting of smaller systems or sub-systems.
A co-op might have a production department, a marketing department and a
finance department, which are sub-systems within the co-op. At the same
time, it forms part of an industry, a province, a country, etc.

Other terms that are often interchangeably used for this body of thought
are systems approach, systems theory, and systems model.

Practically, systems thinking is applied or used for problem solving and
for systems design and can be remembered as such.
Core principles of systems thinking
that set it apart from other paradigms

The whole is more than the sum of its parts



Means that new properties /characteristics or
qualities emerge at the level of the system from
the interaction of the parts, which are not inherent
in the parts.
E.g. Water is wet despite fact that hydrogen and
oxygen that form it are not wet. Marriage is
another example
Systems co-produce each other,

meaning that there is never a single cause to any
problem situation
The significance of systems thinking
from a historical perspective




Different conceptions or views of the world have prevailed at different
stages in history
The magical worldview dominated the agricultural or pre-industrial era.
It is characterised by the belief that life is determined by outside forces,
and that the individual has no control over these forces.
The mechanistic worldview dominated the industrial age. It is
characterised by the idea that the universe is like a machine, which
functions in a predetermined manner according to predetermined
universal laws. According to this worldview, knowledge of a thing is
derived from an analysis of its parts. Current science and technology is
largely based on this worldview.
Growing awareness of the fact that an understanding of the parts was
not enough to predict the functioning of the whole meant that there was
a need for a new paradigm to understand the functioning of systems at
the level of the whole. Systems thinking came into being in the 50’s to
address this need.
When do we need to use systems
thinking?




To solve a problem in a system such as a car following a
mechanical approach, the system is taken apart, the faulty part
identified, fixed and placed back in its appropriate place
This type of problem solving works well in mechanical systems
due to the fact that the functioning of such systems and of their
parts are predetermined. A car doesn’t have a choice but to
function as it was designed to do when all its parts are in good
working order and properly assembled.
But mechanical problem solving fails when social systems are
involved. Social systems are systems involving human beings.
Due to the free will of the people in this type of systems, their
functioning is unpredictable as it is influenced by the choices of
these people. Such systems are termed complex systems for this
reason.
For this type of systems, systems thinking is more appropriate.
The Biomatrix systems theory



There are different schools of systems
approaches.
The Biomatrix systems theory is the one I
know best.
And what I have shared in this presentation
and will continue to share for the rest of it is
primarily based on the Biomatrix systems
theory, developed by Dostal, E., Clote, A. and
Jaros, G. 2003.
Summary



Why systems thinking? To produce an
understanding of the system as a whole, or
the big picture.
What is systems thinking? It’s an approach to
problem solving and for systems design
When do we need to use systems thinking?
When dealing with social systems, systems
involving human beings.
A
Systems Thinking Framework for
Problem Solving
The seven system’s aspects

According to
the Biomatrix
systems
theory, each
organisation,
such as a coop, display
seven
different
aspects, just
like a coin is
made up of
two sides
and a dice is
made up of
six sides.
Environment
Ethos
Aims
Resources
Governance
Governance
Structure
Process
The seven systems aspects cont



The practical meaning of the seven systems
aspects framework is that the seven aspects
of an organisation must be understood for it
to be understood as a whole
It also means that these seven aspects are
the STRATEGIC LEVERS or PLACES TO
INTERVENE for the transformation of the
organisation.
Any shift in any one of these seven aspects
can produce big changes in the whole
organisation.
The meaning and importance of ethos






Ethos of a system refers to the ideas, beliefs, values, theories
that lie at the core of that system.
In the business context, ethos refer to the organisational culture,
the mindset within the organisation, which is responsible for the
unfolding of the organisation.
Ethos are often unstated. And understanding them or the
organisational culture therefore goes far beyond the list of stated
values
The more fundamental or drastic the change in ethos, the more
drastic or radical will be the change in the system. E.g. Religious
conversion, which is nothing but the result of a change of
religious beliefs
Sooner or later, the ideas contained in the ethos get activated
and are put into form. “What the system believes and values, it
will manifest and become, as in the famous expression: “As you
think, so you will become” (Dostal,E. et al)
For this reason it has been correctly said that ethos is destiny
The meaning and importance of the
aims aspect





The aims of a system refer to the results that that system want to
achieve
In the context of a business organisation, a co-op or another form
of organisation, the aims correspond that organisation’s vision,
goals, strategies.
Living intentionally: Without visions, representations, there is no
actions, only reactions (De Jouvenel)
Aims create focus.
“As soon as a clear purpose has been formulated, opportunities
begin to arrive – seemingly in miraculous ways. There is however
no other miracle than that of day-to-day happenings becoming
meaningful. It is the miracle of focused attention” (Dostal,E. et al.
2003)
Co-ops or other organisations that fail to define aims cannot sift
information in a purposeful, thus missing many opportunities.
The meaning and importance of the
process aspect




The process describes the activities of the
system
In the business context, the process refers to
production activities, or the activities involved
in the delivery of services to the customers.
The process must be analysed to identify
inefficiencies and also to ensure maximal
utilisation of resources though waste
reduction and utilisation of by-products
Processes must also be designed to achieve
more with less. E.g. Sharing of infrastructures
The meaning and importance of the
structure aspect

In the context of business organisations, the structure aspect
refers to the organogram

Just like the arrangement of the furniture in the room regulates
the flow of traffic through the room, organograms acts like a
channel within which the activities of an organisation take place

E.g. The flow of planning and decision –making activities is regulated
by the organisational structure

Organograms also create the stability and continuity of the
organisation in an otherwise changing environment. Structures
outlive people and perpetrate the organisational culture.

But this also means that structures play a role in maintaining the
status quo. If old structures persist while new aims and
processes are being pursued, the chance of success is limited
(E.Dostal)
The meaning and importance of the
governance aspect




The function of governance in an organisation is to
set aims and to regulate the movement of the
organisation towards the attainment of these aims
Setting the aims of the organisation is to decide for it
what to aim for, e.g. the monthly volume of
production
And regulation relates to the planning of the course
of activities
Governance influences all the other aspects of the
system and was drawn in the middle of the seven
system’s aspects for this reason.
The meaning and importance of the
resources aspect



The resources aspect refer to the resources of
the organisation, such as it’s capital
equipments, financial resources, intellectual
property, etc.
Setting the aims of the organisation is to
decide for it what to aim for, e.g. the monthly
volume of production
And regulation relates to the planning of the
course of activities
The meaning and importance of the
environment aspect

The environment of an organisation consists of its transactional
environment, which is the environment which the organisation is
directly connected

And the contextual environment, which is the part of the
environment over which the organisation has no control over but
must adapt to

But even adapting to the contextual environment requires an
understanding of it, how it is likely to change and how this could
impact the organisation
A organisation can widen its influence and extend its
transactional environment by aligning with stakeholders to
deliberately extend their influence


E.g. a co-op cannot influence legislation, but a a lobby of coops
such as the CWCF can.
Summary

The seven systems aspects provide a
framework for a wholistic understanding of
business organisations or problem situations
within these organisations.

These seven aspects are also strategic
levers or places to intervene for the
transformation of an organisation
The
Ideal Design Approach
to
Problem Solving
What does the Ideal Design approach
to problem solving consists of?


The ideal design approach consists in
dissolving the problems that exist in an
system by creating a better system
It is a case of Dissolving rather than Solving
because the problems inherent in the existing
situation disappear with the replacement of
that situation, and are replaced with the new
realities of the new situation.
Why is the Ideal Design approach to
problem solving a correct approach?
Or What is the rationale behind it?

The ideal design approach is based on the fact that the logic of a problem is not
the logic of the solution. By solving a problem , one stays in the logic that
created the problem.


Eliminating a problem does not necessarily lead to the ideal situation.



E.g. solving the problem of disease is focused on getting rid of the disease through
medication. But a focus on health as an ideal inspires a different logic, health
producing strategies such as nutrition and exercise, which eventually dissolve the
disease.
E.g. Punishments are designed to eliminate specific undesirable behaviours. But an
ideal behaviour must be inspired by ideals values and rewarded. It will never be
created by punishments alone.
So the point is to focus on creating the desirable, the ideal, rather than on
getting rid of the undesirable.
The logic of the ideal is a “higher order logic”.



E.g. By researching disease, one will not find the attributes of health. By researching a
child’s addiction to drugs, one will never find the attributes of a disciplined child. Such
discipline belongs to a higher level than the addiction.
The values of the cooperative system cannot be found by researching capitalism
The attributes of a co-op will never be found in a capitalist system
How is the Ideal Design approach to
problem solving applied in practice?





Experience shows that people find it difficult to imagine ideals. It
seems far easier for people to say what is wrong in their life and
organisation than to imagine the ideal situation
For this reason, a practical method developed by the Biomatrix
group (Dostal, E.et al ) for the formulation of ideals is to start by
brainstorming the problems.
These problems are then used as stepping stones for creativity.
These problems will point to the areas in which there is a lack of
ideals.
Ideals are thus brainstormed to replace the current problem
situation
The brainstormed ideals are then integrated into a coherent
design, using the seven systems framework, to ensure that you
have a complete, wholistic design, that does not miss important
parts or aspects of the organisation.
What must be done after ideals have
been formulated?

Once ideals have been formulated, strategies must be formulated and
implemented to bridge the gap between the current and ideal situations.
This process is referred to as
BACK CASTING.
Back casting
Current
situation
Ideal,
imagined
future
Projected
futures
Projections of current
situation and its trends
Courtesy of Dostal, E. et al, 2003
Time
Summary




When solving a problem, do not focus on the
problem itself. Focus on the ideal, what should be
rather than what should not be.
As you replace the current situation with the ideal
situation, the problems that were inherent in the
existing situation will disappear of their own accord.
To formulate ideals, use an understanding of the
current problems as stepping stones for creativity.
Once ideals have been formulated, strategies that
are required to attain or approximate these ideals
are formulated and implemented.
The
Potential Role
of
the Co-op System
in
sub-Saharan Africa
The problem of exploitation in Africa?



Africa and sub-Sahara Africa in particular are characterised by:
 Widespread and abject Poverty of its people, to an extent that
most are deprived of the most basic necessities: food,
healthcare, education, etc.
 Very rich natural resources, including above ground and
underground resources, ranging from a very arable soil,
natural hydroelectric potential of its rivers, to abundant
reserves of mineral resources,.
How can such widespread poverty co-exist side by side with so
abundant mineral wealth and other natural wealth?
The answer lies in the Exploitation of its people and its natural
resources through various forms of profit driven investors
activities.
The spirit, or core values of the co-op
system and its potential role in subSahara Africa?
Core values of a
Co-operative system

Collective/group approach
 Collective strength,
financially and otherwise,
capable of helping people
to help themselves
 Stronger and more
capable of resisting
exploitation in unity, using
the strength of the
collective
 Promotes common
collective interests
Core values of the
capitalist system

Individual approach



Limited individual
capacity, financially and
otherwise, powerless
individuals who are
unable to help
themselves
Weaker more likely to
succumb to exploitation
Promotes selfish
interests
The spirit, or core values of the co-op
system and its potential role in subSahara Africa?
Core values of a
Co-operative system

Local, decentralised
control of resources



Economic and social
liberation for all
Economic democracy
Creates local long term
&sustainable
development
Core values of the
capitalist system

Centralised control of
resources to maximise
profit




Maximum profit in the
hands of a few
Centralised wealth,
creating the Haves &
Have-nots, the
exploiters & the
exploited
Drainage of local
wealth
The spirit, or core values of the co-op
system and its potential role in subSahara Africa?
Core values of a
Co-operative system

Democratic



Empowering
Equality
Responsibility
Core values of the
capitalist system

Undemocratic


Suppression
Oppression
Summary

The co-operative system can bring a
fundamental structural or systemic change,
not just some improvement or mitigation to
the negative impacts of the capitalist system.
How
The Co-op system
is already making a difference in
Kenya and South Africa?
The Co-op movement in
South Africa



The first coop in South Africa was formed in 1892
The National Cooperative Association of South Africa (NCASA)
was formed in 1997, to serve as the Apex structure or umbrella
body for sectoral affiliates of all cooperatives in the country.
NCASA was very instrumental in creating a legal and policy
framework for the development of the cooperative movement and
also in facilitating the formation of sectoral bodies. A key funder
for the formation of this umbrella body was the Canadian
Cooperative Association
The Co-op movement in
South Africa (continued)

Today, the picture of the co-op movement appears as follows:



There are three national policy pillars for the development the co-operative
movement,
 including the cooperative development policy for South Africa,

a cooperative Act (2005), and
 a national strategy on co-operatives still at a draft stage
The following sectoral bodies
 South Africa Housing Cooperatives Association (SAHCA), which has 50
housing cooperatives affiliated to it, and 12,500 members
 The Savings and Credit Cooperative League (SACCOL) of South Africa, which
has 40 SACCOs affiliated to it and 50,000 members.
 The Federation of Burial Societies
 Attempts are being made for the formation of a sectoral body for worker
cooperatives
16,994 registered stand alone co-operatives.



Growth and concentration of cooperatives are mainly in two provinces in which
there is a high concentration of poor rural populations: Kwazulu Natal (40%)and
Eastern Cape (19%)
Agricultural sector tops the list with 27%, followed by multipurpose co-ops (25%).
125 worker co-ops, just under 1%.
The Co-op movement
in Kenya

In Kenya, there is












A ministry of cooperatives
a national apex organisation of co-operatives, the Kenya Federation
of Co-operatives, and
8 sectoral organisations.
Over 11,000 registered co-operatives in 2007
A co-operative tribunal which has handled over 2000 disputes since
its inception in 2000
A co-operatives ethics commission was established in 2003 to focus
on issues of good governance and ethics in the movement
A cooperative college since 1952: the Co-ops College of Kenya
Kenyan co-operatives account for 45% of the GDP
In 2007, 31% of the gross national savings was mobilised
through co-ops
250,000 people are directly employed by co-ops
Membership of over 6 million
About 63% of the Kenyan population directly or indirectly
depends on the co-op activities
Stories of
selected successful
co-operatives in sub-Sahara
Africa
Oromia Coffee Farmers Co-operative
union, Oromia province, Ethiopia












Was formed after study tours to different parts of the world by key members of
Oromia cooperatives
The union is responsible for ensuring certification standards, packaging,
marketing and distribution, and farmer development programs
129 coffee co-operative societies representing 128,361 farmers in 2007
Individual cooperatives found it difficult to access international markets
The union assisted in getting fair trade and organic certification
With the fair trade labelling organisations (FLO) premiums, the co-ops get an
extra 10 US cents per kilogram
The FLO premiums go directly to the co-ops societies for grassroots social
services (clinics, schools, electrification, potable water)
Out of 236,482 hectares under cultivation, over 70,000 hectares are organic
certified
Also, by taking over the marketing and distribution processes, the co-op union
has eliminated two to three middlemen. Coffee goes from the farmers’ to the
farmers’ cooperatives to the coo-op union and then directly to the markets.
The coop is further expanding its role by building a processing plant
The union and its members own 70 warehouses, 55 pulperies, and 15 hulleries
Success attributed to high managerial capacity, bottom up development and
widespread support from inception, learning from experiences,
Co-operative Insurance Company of
Kenya




The 8th (out of 43) largest insurance enterprise in
Kenya
Entirely owned by co-operatives
Ensures loans for SACCOs against death and
disability, and the traditional range of insurance
products for co-operatives and co-operative
members including home, automobile,
commercial, individual and group life products
Had 12 branches and relationship managers for
co-operatives across the country in 2007
Sodla-Sonke Cleaning Co-operative
South Africa











Was founded by 13 unemployed residents who all had to pay R300 (about 100
Canadian dollars)
Members were willing to forego their salaries to buy their first truck
There is a flat structure, with no hierarchy among the members and they pay
themselves a flat rate
Each member is supervisor of one of the co-op functions (e.g. truck, street
sweeping, litter picking etc.) And each member is responsible for
Below the members are the 28 employees of the cooperative, and temporary
staff employed on a two-months contract basis
The primary activity of this coop is waste management, including refuse
collection, street sweeping, litter pick up, and collection of illegal dumping
They have divided their area of work into 5 districts, and dedicated each district
to a particular day of the week.
Also involved in environmental awareness through lessons in schools,
meetings with community, visits to churches, and in pubs and other
recreational areas
It has even organised “clean the park” days with the local schools
It has also sponsored community events such as a massive tree planting
initiative programs in the community, with the slogan of “cleaning and greening”
Has provided permanent employment to 28 people and temporary employment
to an additional 10.
Nomzamo
Cleaning Co-operative, South Africa





Was formed in 2000 by retrenched cleaning staff at the
University of Fort Hare to survive takeover of their function by
outside subcontractors. They then tendered for the University’s
cleaning services)
Their primary activities: cleaning services for the university
buildings , i.e. offices, classrooms, toilets and hostels of the
campuses.
They have diversified their activities in two directions:
production of cleaning agents , which helps them reduce their
costs, and selling of these cleaning materials to customers in
the nearby communities
They have also increased their customer base, which now
include a local hospital
The co-op has 149 members, most of whom have been there
since 2000
Khayamandi
Women in Development, South Africa





A brick-making co-operative initiated by
unemployed women in 2000
Started with 20 members
The co-operative has managed to pay some
wages every month,
Has not managed to be awarded
government tenders but work as subcontractors
Have now diversified to include poultry to sell
chickens and eggs to the local community
Closing
“The co-operative movement which is
gradually gaining ground in our economic
life, because it represents the highest truth of
man, the truth of his unity, is also the true
wealth of the people”
Rabindranath Tagore, August 20th, 1939