Management often tries to solve problems or improve performance with information from the surface – or “tip of the iceberg” – rather than exploring lower, more meaningful structures. The problem is most managers haven’t been trained how to explore problems with meaningful data.
At the surface of a company are events: sales, market developments, human resource issues, technological changes, customer interactions and financial events. If we focus primarily on these events, we tend to react. Business has become a series of crises because management doesn’t know how to use and interpret data correctly.
If we examine events, we see that they emerge from trends and patterns. An appreciation of trends and patterns allows us to plan and anticipate. Anticipating is an improvement over reacting, but we still aren’t able to effectively create the results we want.
Trends and patterns are a function of the underlying data. Some aspects of the underlying data like comparing one month to another, one event to another are easy to see but they represent limited views. Other events, like statistical shifts in cash flow, customer engagements, market shifts etc require more than a simple spreadsheet and/or short term view of data. Even deeper trends and patterns that reflect changes in beliefs, mental models and culture lie much farther below the surface.
Systems Thinking provides a disciplined way of understanding the underlying dynamic relationships among data, information and people. If we only navigate in our systems by gathering data on the surface and reacting to the tip of the iceberg, we’re likely to create new crisis or fuel existing ones.
Improving organizational performance requires management to learn how to improve and to measure the right things and measure them correctly. In the era of BIG DATA and hyper cycles of change management must learn how to use the data or get stuck on the surface of one crisis to another. Going from one crisis to another means you’ll always be stuck in crisis mode until one crisis or a series of crisis destroys the organization.