Taking Account Systems Thinking Certification

The next segment of the Systems Certification course, is presented through an Accounts Receivable Period Reduction model. The Accounts Receivable Period Reduction model follows the same Kumu path laid out for the Network Magic Growing Pains model used in the previous segment, but applies it to a different Situation meaning that the Assumptions, Behaviors, Model, Stakeholders, Boundaries, Leverage and Strategy aspects will also be different. Even with those differences, the approach to this segment should have been expectedly, fairly straightforward.

However, the culmination of learning attained so far and new knowledge gleaned during the creation of new models not only raised some new questions but also induced me to revise some of the past blog posts in this series, to create some new models to understand systems thinking better and to revamp the Systems Thinking Approaches wiki-page including organizing it with a table of contents and giving STW/STiA Systems Thinking Certification its own wiki-page.

In the last blog post, Enabling a Better Tomorrow through New Community Paradigms, the Network Magic model is never mentioned but was the basis for the Strategy for Enabling a Better Tomorrow model and helped lead to the New Community Paradigms Entrenched City Halls model.

The AR Period Reduction Model segment is based on a series of different but commonly themed models, as was the Network Magic segment. The models have been cloned and adapted for this effort. An overall AR Period Reduction Campaign model has also been created combining all of the relevant models together.

For the AR Period Reduction case an issue of time is more closely associated with the particular situation under study. The apparent goal of the company under study, Big Box Distribution, is to decrease what it sees as an overly lengthy average accounts receivable period (AR cycle). Management, taking a stereotypical command and control management approach, look at the Accounts Receivable department as an isolated function, threatened to fire everyone for not meeting imposed goals and followed through when the desired change did not occur prior to calling in the systems thinking consultant. AR Period Reduction/Situation

The removal of the accounts receivable team that was directly dealing with the problem makes addressing the issue through systems thinking more difficult because the new team has no experience. The new team will be understandably nervous with strangers sent by management. The old team though would have presented its own issues

A systems thinking approach looks at the system as a whole, so no specific perspective will be exclusively taken including the AR department or management. The behavioral trends of all the stakeholders that have evolved over time need to be studied more closely. AR Period Reduction/Behavior.

A systems thinking approach then goes beyond the singular view of the isolated AR cycle, initially adopted by the top down command and control approach, and investigates the behavior of several variables within the larger system over time. This will undoubtedly raise more questions than answers at first because it examines unquestioned assumptions but it also allows us to investigate what else might be influencing the trending of these variables. AR Period Reduction/Model

The model created then through systems thinking is intended to profile the relevant stakeholders within the larger system of not only the company as a whole but their market and customers as well, including the responsibilities and apparent motivations of all. AR Period Reduction/Stakeholders

At this point the derived Model and its associated Boundary provides a map of the Situation, Stakeholder and Behavior aspects of the real world situation (the territory) for further exploration. AR Period Reduction/Boundaries

These assumptions, both initial and those which arose during the exploratory process, should continue to be questioned and tested to ensure we are on a solid foundation before proceeding to the Leverage and Strategy aspects of the systems thinking process. AR Period Reduction/Assumptions

Hopefully, the systems thinking exploration begins to reveal appropriate pathways to investigate for possible leverage points within the current situation. Such an attempt requires a deeper understanding of the most appropriate components for the strategy. It is this model within the AR Period Reduction Campaign series that brings in the Donella Meadows Institute (NCP wiki-page) Leverage Points featured in the New Community Paradigms Entrenched City Halls model and illustrated more fully here  . AR Period Reduction/Leverage

A systems thinking approach can take a significantly different path than one dictated by a command and control management approach. The systems thinking approach can call upon the stakeholders of the system in question to take the investigation resulting from preceding exploration points of leverage and craft a strategy which will address the current situation in a manner that is beneficial to the whole system by changing stakeholder and organizational behaviors and avoiding unintended consequences to the extent possible. It is this comprehensive, deep understanding approach that is fundamental to systems thinking, Never improve a part of the system unless it also improves the whole. - Ackoff. AR Period Reduction/Strategy

The AR Period Reduction Campaign model(s) provide a somewhat more realistic application of the Strategy for Enabling a Better Tomorrow and the New Community Paradigms Entrenched City Halls models and of the earlier and more fundamental Systemic Perspective or Strategy (IM-1366) model. However, although somewhat revised, the AR Period Reduction model remains basically the same without any particularly significant advancement in understanding (more a matter of solidifying) and the AR Reduction Period case itself is again not real, begging the question are there any real, 'concrete' examples of systems thinking?

These models though also help though to illustrate differences between traditional top down command and control versus more collaborative system thinking approaches in organizational management. These differences can be used to demonstrate both the limits of a more traditional top down command and control approach, and of a systems thinking approach as well.

These differences within the processes of the world and between our different means of dealing with that world can be made more acute and make implementation more difficult depending upon how they interact. We may speak of two separate general approaches or systems of management to address a world seen either as being complicated or as being complex (having established earlier that there is a difference) but the real world consists of both simultaneously and not always in a readily apparent manner. Raising the question, what makes the difference and can we integrate that knowledge and understanding into new community paradigms?