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June 19, 2002 Issue 26



“As little as one-third to one-half of most companies’ stock-market value is accounted for these days by hard assets such as property, plant, and equipment. The growing share of measurement lies in intellectual or ‘invisible’ attributes not traditionally viewed as assets at all—such as customer satisfaction, internal business processes, an organization’s ability to learn and grow, and the effectiveness of corporate culture. It is within this realm of invisible factors that spirituality in business lives.”
—Brenda Rarey

“All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership.”
—John Kenneth Galbraith



Leading in a Complex World: Systems Thinking in Action®
September 30–October 2, 2002
UPDATE!

Nick Pudar, director of GM Strategic Initiatives, is an additional keynote.

In many real-world business settings, the toughest leadership calls involve decisions that allocate significant resources when outcomes are highly uncertain. A flawed decision that moves hundreds of millions of dollars into a doomed venture can have devastating results, while a systemic and well-reasoned assessment of a new project’s positive potential can vault a company into an industry-starring role. Backed by a confidence based on an understanding of system dynamics, systems thinking tools, and options theory principles, senior decision-makers at General Motors have made the right tough calls and taken industry-leading steps in auto-leasing, vehicle communications, and entertainment systems. More cutting-edge innovations are in the works. With reference to a questioning process based on Russell Ackoff's concept of “idealized design,” Nick will speak candidly about how leaders reach their decisions and give us an insider’s look at actual examples of leadership and strategic change at General Motors.

Nick Pudar, director of GM Strategic Initiatives, has been with General Motors since 1981. He manages an internal consulting team that works on GM’s enterprise strategic issues. Nick holds a B.S. in mechanical engineering from General Motors Institute and an M.S. in management from Massachusetts Institute of Technology.

Get all the latest conference details.
See you in beautiful San Diego!



Books and Resources on Organizational Change and Learning

Organizing for Learning: Strategies for Knowledge Creation and Enduring Change
by Daniel H. Kim


New technologies, global markets, and the growing importance of knowledge assets over capital are forcing us to rethink what has long been taken as fact. The most important challenge for organizations is to develop the capacity for continuous learning—that is, to go beyond managing existing knowledge to creating new knowledge. Accomplishing this requires that we not only think differently, but also frame problems in whole new ways. This collection of lead articles from The Systems Thinker® newsletter opens a new dimension of insight into dilemmas that confound many organizations.
Order #OL017r, $24.95
Order

“Emergent Learning in Action: The After Action Review”
by Charles S. Parry and Marilyn J. Darling

This article describes one of the best examples of emergent learning—the “After Action Review.” An iterative practice of reflecting, planning, and acting around a central performance challenge, the AAR helps to evolve a team’s implicit and explicit knowledge into new practices and standards of excellence. Developed 20 years ago by U.S. Army leaders as a way to use on-the-ground action as the crucible for learning, today it has been adopted by many companies, such as Harley Davidson and Power Construction, seeking to develop ongoing learning practices.
Order #120801, $6.00
Order

Organizational Learning at Work: Embracing the Challenges of the New Workplace (Pegasus Communications)

The practical wisdom evident in this volume is a powerful reminder that the success of an organization's journey is determined as much by the way pivotal obstacles are traversed as by the vision of the final destination. These distinguished authors use the potent approach of systems thinking and organizational learning to tackle prevalent organizational challenges, pointing the way to specific steps that can effectively move people toward their goals.

Order #OL010, $24.95

See more resources on organizational learning.



Systems Thinking 101: New Approaches to Organizational Challenges
July 15, 2002, Waltham, MA

Enjoy a midsummer day’s dream in Boston—a workshop with Ginny Wiley, systems thinking educator, organizational consultant, and president of Pegasus Communications. Find out why systems thinking—and not Puck’s supernatural power —is an essential tool for organizational success. Systems thinking helps us understand the causes that underlie persistent problems, recognize the highest leverage points for systemic intervention, formulate effective short- and long-term strategic plans, and make decisions with greater clarity and foresight. Participate in this hands-on session and familiarize yourself with some of the powerful tools that systems thinking has to offer. To learn more or to register, please call 1-781-398-9700, or go to our web site and complete and fax the registration form to 1-781-894-7175.



To contact Pegasus, send an e-mail to info@pegasuscom.com.
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Pegasus Communications provides resources that help people explore, understand, articulate, and address the challenges they face in the complexities of a changing world. Since 1989, Pegasus has worked to build a community of practitioners through The Systems Thinker® Newsletter, books, audio and videotapes, and its annual Systems Thinking in Action® Conference and other events.
FACE TO FACE
Delivering Energy with Excellence at Colonial Pipeline: An Interview with Charles Alday
FROM THE FIELD
Systems Tools Spur Student Interest
FROM THE RESOURCE SHELF
Achieving Innovation by Way of Chaos
 
 



FACE TO FACE
Delivering Energy with Excellence at Colonial Pipeline: An Interview with Charles Alday
by Kali Saposnick

Each year, companies from around the globe send their staff to the Systems Thinking in Action conference hosted by Pegasus Communications. In this article, veteran attendee Charles Alday of Colonial Pipeline—operator of the world’s largest refined petroleum products pipeline—shares how he has developed a systemic approach to improving his company’s operational processes.

About six years ago, Colonial Pipeline had a defining moment: One million gallons of diesel fuel spilled from a ruptured pipeline into Reedy River in South Carolina, damaging the company’s reputation with both the public and regulators. Forced to scrutinize how they conducted business and maintained their pipeline, top management initiated changes in the executive leadership and in operational procedures. Around that time, Charles Alday became part of a core group of change agents charged with helping the company implement its philosophy of putting safety first and achieving spill-free, error-free operations.

As operational excellence manager, Alday works with individuals and teams to create a seamless energy delivery system. For example, to develop administrative policies to guide the performance of daily tasks, Charles and his group gathered input from all operations-related functions at the grassroots level. To help a design team map out and integrate processes involved in automating operations functions, he invited a consultant to conduct systems thinking workshops. In addition, Charles manages the “Lessons Learned” program, a database where error-related feedback is collected and disseminated. “We’ve significantly reduced errors and spills by providing procedures for tasks,” Alday explains. “People report avoiding mistakes and near misses by becoming more intentional about their thoughts and actions.”

Although Charles feels the company still faces many challenges, he believes that, since change efforts were initiated, “Colonial’s workforce has not only become more professional as they master tools to help improve their performance, but the operations team has become a more integrated organization that identifies and solves problems holistically.”


Charles Alday and a Colonial Pipeline team will be attending this year’s Pegasus conference, Leading in a Complex World: Systems Thinking in Action. Learn more about the conference. See Pegasus Highlights in the right column for more information about books and resources on organizational change and learning.
 



FROM THE FIELD
Systems Tools Spur Student Interest


How does the overpopulation of Canada geese affect our environment? What is the effect of cloning on biodiversity? These and other provocative questions guided the 85 eighth-grade science projects at this year's Carlisle, MA, middle-school EcoFair. Based on an innovative integration of systems thinking and system dynamic tools into the school's curriculum, the students' presentations highlighted their understanding of the impact that people's actions and public-policy decisions can have on the environment.

"It's discovery learning," explains science teacher Jim Trierweiler, who developed an introductory physics and chemistry program based on a learner-centered approach to science. In his classroom, teams of four collaborate to explore why, for instance, a boomerang returns to its thrower. "The idea is to provide students with a question so challenging that even the highest achiever doesn't have a clue. To figure it out, team members have to talk to one another," Trierweiler explains. As they struggle to draw behavior over time graphs of the air pressure above and below the wing as the boomerang moves through its flight pattern, they'll eventually ask Jim for an explanation. "And that's when they'll listen to me!" he says. "This method enables them to understand key concepts such as Bernoulli's effect, which explains how a boomerang works, at a deeper level."

To prepare for this year's EcoFair, rather than structure their projects around research papers, students were required to use systems tools to conceptualize an environmental problem. For instance, Nicole Spencer mapped out a stock and flow diagram of how wolves and hunters affect the caribou population. "Before I did this project, I knew that wolves helped keep the caribou healthy, but I didn't know that when hunters' killed the wolves, it had a negative impact on the caribou." Michael Luby, who worked on "Fusion's Effect on Global Warming," says that "using causal loop and stock and flow diagrams shows me how interrelated everything about the environment is. Without the diagrams, I would just write a good report, but this way I really understand." Other student projects included "What's the FDA Trying to Feed Us? Stop Genetically Engineered Foods," "Humans' Effect on the California Condor Population," "How the Gulf War Affected the Environment," and "Nuclear Fusion Is a Good Alternative to Fossil Fuel."

Crucial to the EcoFair's success were the middle school's systems mentors—science curriculum coordinator, Alan Ticotsky, and eighth-grade math teacher, Rob Quaden. Supported by a grant from the Waters Foundation, Alan works full-time across disciplines with teachers and students to find ways to apply systems tools in the classroom. His goal is to make sure that "every Carlisle middle-school student gains, at the very least, an enthusiastic appreciation of science." Quaden mentors students two days a week and helps them build simple computer simulations. "As a teacher, I'm concerned whether the kids clearly understand their concept for the research paper," says Rob. "With a diagram, I can see their thinking in a visual way and clarify any misconceptions.

"
Based on the EcoFair's positive reception, their efforts are clearly paying off. Animated discussions around the students' sophisticated projects (which included diagrams, summaries, pictures, and research papers) demonstrated that Carlisle eighth graders are gaining a deep understanding of their connection to the world around them.
—KS


Learn more about causal loop diagrams and stock and flow diagrams.
 



FROM THE RESOURCE SHELF
Achieving Innovation by Way of Chaos
by Kali Saposnick

Today, some corporate executives have begun to question traditional ways of directing economic activity and building business enterprises. According to Richard T. Pascale, Mark Millemann, and Linda Gioja in Surfing the Edge of Chaos: The Laws of Nature and the New Laws of Business (Crown Business, 2000), these leaders recognize that organizations are living systems with enormous potential to learn from and adapt to their environment. To cultivate this potential, they are letting go of command-and-control leadership styles and becoming context setters—that is, creating the conditions that will most likely produce their desired outcomes.

Underlying these ideas are core principles of complexity science. Complexity science represents a radical departure from what the authors call “social engineering,” the long- entrenched belief that leaders are more knowledgeable than others and change is predictable. The authors contend that social engineering failed to achieve significant organizational transformation because it didn’t take into account that people cannot be engineered. Rather, leaders must give employees ownership of organizational initiatives and find ways to fully utilize their staff’s potential.

The authors offer several guidelines to help leaders translate complexity principles into business applications. For instance, they claim that companies must avoid using one strategy for too long; otherwise, their mechanisms for coping with change will erode. Also, to undergo a dramatic metamorphosis, managers must lead their staff to the edge of chaos, harvest conflict and instability, and allow the system to self-organize in new ways. According to Pascale et al, companies that follow these principles can significantly increase their competitive edge in the global marketplace.

Read the complete article online or see The Systems Thinker®, Vol. 12, No. 7 (September 2001).
 
 



  Copyright 2002 Pegasus Communications. LEVERAGE POINTS™ can be freely distributed in its entirety or reproduced or excerpted for another publication with written permission from Pegasus Communications. Contact permissions@pegasuscom.com.