This radical restructuring of the employment contract comes at a time when businesses arc facing a whirlwind of challenges. The nature and scope of changes such as downsizing, re-engineering, and new competitive rules suggest that they are in fact part of a larger trend toward an emerging new model of corporate organization. But what will be the role of workers and management in this new organization? The current upheaval offers the perfect opportunity to create not just another contract, but a new covenant for employment — one based on the concept of stewardship rather than patriarchy.

A New Employment Covenant

Peter Block, author of the book Stewardship (Berrett-Koehler, 1993), describes stewardship as “the willingness to be accountable for the well-being of the larger organization by operating in service, rather than in control, of those around us. Stated simply, it is accountability without control or compliance.” In Stewardship, Block offers a vision of a new type of organization based on a fundamental belief that all employees should be treated as mature adults who can be held responsible for themselves and their actions.

This new model strives to create an environment in which people can fully participate and contribute to the goals of the larger organization. Such a commitment goes beyond the traditional concept of an employment “contract” — it would be more accurately called a “covenant.” While a contract tends to focus one’s efforts on keeping within the letter of the law and preventing what we do not want (patriarchy), a covenant emphasizes operating in the spirit of the law and focusing on creating what we do want (stewardship).

At first blush, the new employment covenant sounds almost utopian — after all, who can argue with people taking their future into their own hands, finding or creating interesting work for themselves, and becoming responsible for their own careers? These ideas have the makings of a great vision, but there are fundamental questions that need to be addressed: What will the new covenant look like, how will it be implemented, and perhaps most importantly, who has the power and responsibility to make it a reality?

Leadership and Governance

At the heart of the new employment covenant is the issue of governance—how we distribute power, privilege, and control. If we are truly committed to bringing about this new covenant, we need to work to create fundamental structural changes to support it.

The governance structures in most organizations still treat people as if they need to be taken care of and “controlled,” either because they are incapable—for reasons of both individual maturity and organizational complexity—or simply untrustworthy. The old employment contract had at its foundation an implicit assumption that our leaders somehow knew more than we did, so we could trust them to make the right choices and take care of us. In return we gave them the authority to make decisions on our behalf. But, as Block points out, “When you ask someone to take care of you, you give them at that moment the right to make claims on you.”

By following this implied contract, we have colluded in sustaining a system in which we give up individual initiative, responsibility, and accountability in exchange for “guaranteed” rewards. But the new covenant challenges this basic belief. According to Fortune, “For some companies and some workers, [the new covenant] is exhilarating and liberating. It requires companies to relinquish much of the control they have held over employees and give genuine authority to work teams…. Employees become far more responsible for their work and careers: No more parent-child relationships, say the consultants, but adult to adult.”

°Shifting the Burden° in Reverse

From a systemic viewpoint, the new covenant has the potential to reverse an entrenched “Shifting the Burden” structure. In most companies, management-imposed systems and policies have been the predominant way of dealing with organizational crises (BI in “When Policies Turn into Parenting”). This has led to the continual underdevelopment of individual initiative and responsibility (B2), which, over time, leads to more organizational crises and further justifies the need to develop more systems and policies to help “tend the flock.”

Through this process, the belief among employees that “the system takes care of me” increases (R3), which further undermines individual development. The burden of responsibility is “shifted” to those in higher positions through well-intentioned, seemingly progressive human resources policies. It is a simple extension of the familiar parenting model.

Recognizing that we are caught in this structure is one thing; reversing the dynamic, however, is a more difficult challenge. If the new covenant is to take hold, managers must be willing to reflect on their own role in the system and consider alternative roles beyond that of caretaker and controller. Otherwise, the new employment covenant will become (or will be interpreted as) simply another exercise of power, with those at the top of the organization imposing rules on everyone except themselves. If that is the case, then the changes are likely to be neither effective nor deep. As Block states, “unless there is also a shift in governance… [change] efforts will be more cosmetic than enduring.”

Fear of Losing Control

One of the particular issues managers must face is the fear associated with letting go of control. This may not stem from a lack of trust in people, per se, but from a mistrust of our own understanding of the complexities that we manage. That is, because we don’t trust the overall capability of the enterprise as a system, we act in ways that treat people as if they are themselves untrustworthy. This insecurity drives us to over control, rather than allow individuals to exercise their best judgment.

According to Block, stewardship requires the belief “that with good information and good will, people can make responsible decisions about what controls they require and whom they want to implement them.” Having good information and good will may not be enough to make intelligent decisions, however, if we are not aware of the larger context in which they are being made.

°Tragedy of the Commons° Lessons

Without a global perspective, it is easy to make decisions that are beneficial to certain parts but that sub-optimize the whole. The “Tragedy of the Commons” structure offers many examples of this situation. The main lesson of this archetype is that the leverage does not lie at the individual level.

“Tragedy of the Commons” plays itself out wherever there is a common resource (people, physical space, budgeted dollars, etc.) that must be shared by equivalent players (those with equal power in the organization). Each person or department tries to maximize their use of the resource. When the sum of their requirements exceeds the resources that are available, there is no incentive for anyone to give up their piece. In this case, good information and good will alone are not enough to make the best decisions for the organization; a higher authority is needed.

This does not automatically mean that a “boss” steps in and makes the decisions for the teams. Instead, what is needed is an appropriate governance structure that everyone agrees to follow in advance of any specific decision having to be made. This could take the form of a set of criteria against which individual needs are weighed, a review board that is charged with maximizing the organizational use of a resource, or a system of checks and balances that recognizes when divisional needs must be sacrificed for the benefit of the whole company. The role of a leader, in these cases, is not to dictate from the top, but to help identify and create the appropriate governance structures.

Changes at Multiple Levels

So how can we make the new employment covenant a sustainable reality? The first step in this process is to be vigilant about how day-to-day decisions are being made. We cannot, in the name of efficiency, override the spirit of partnership and drive the process without full participation. All those being affected by the new covenant must be involved in mapping out the new structures and policies from the start. Getting everyone involved will require significantly more time than a traditional top-down “roll out,” but in the end, it may be more efficient and effective. If everyone’s participation is important to achieving the goal (which is the purpose of shifting responsibility back to the individuals), then anything that bypasses anyone’s involvement will be less than effective.

The second step is to examine the structures that are embedded in our organizations as a product of patriarchy (such as “Shifting the Burden” dynamics) and begin to clarify the challenges of moving to a structure that is based on partnership. After decades of living with patriarchy, people may require some adjustment time before they can fully step into the new model.

Most importantly, changes must happen at multiple levels simultaneously in order to be significant and enduring (see “New Model for Leadership”). The vision of stewardship is rooted in a shared sense of purpose that is based on choosing service over self-interest. This vision and its underlying values and beliefs will, in turn, guide the understanding of current reality and the creation of new systemic structures that will help translate the ideals into reality.

When Policies Turn into Parenting

The new employment covenant is working to reverse an entrenched “Shifting the Burden” structure, in which the burden of responsibility has “shifted” to those in higher positions.

But it is at the level of everyday events and patterns of behavior that we will demonstrate whether we are serious about making fundamental changes. The congruence between daily actions and shared vision will answer the question, “How serious are we about walking the talk?” If daily actions are governed by efforts to maintain safety, then everyone will hedge their bets and the dynamics of entitlement and patriarchy will likely continue. If, on the other hand, there is a sense of adventure and risk-taking, then empowerment will be a natural reinforcing by-product of such actions.

The Stewardship Challenge

Stewardship can spring up anywhere in an organization. Stewardship is leadership in the moment, not leadership by position. This means that we should not only look up the organizational chart for leaders, but across and down as well. Hierarchy then becomes less of a system of power and control and more of what it should be — a system of organization that makes distinctions between different types of work and responsibilities. Stewardship ultimately challenges us as individuals to make those choices and then live by them, as we acknowledge that the responsibility for leadership lies squarely on everyone’s shoulders.

Stewardship (Berreu-Koehler, 1993) is available through Pegasus Communications, Inc. (617) 576-1231.

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Using the Archetype Family Tree

The Systems Archetype Family Tree is based on two principles: that the systems archetypes are related strategically to each other, and that many situations can be described by progressing through several archetypes as they are linked on the tree (see “The Archetype Family Tree”). The tool is intended to help you use the relationships between archetypes to figure out how to begin looking at a new situation, and to gain increasing understanding of a problem as you work through the tree.

For example, suppose you were one of the proprietors of that lawn care company. You would start at the top of the chart, thinking about the nature of your situation. Is the phenomenon you want to understand something that used to be growing, whose growth you would like to reinstate, or something that is growing too quickly and you are worried about where it might lead? Then wind your way through the statements on the reinforcing (left-hand) trunk of the tree to see if they apply to your situation.

In this particular case, growth was not an issue; they had a debt problem to consider. If you, like the lawn care company owners, are trying to fix a chronic problem that persists despite your efforts to fix it, you want to work through the balancing (right-hand) trunk. Again, follow the chain of logical relationships, continuing to identify elements of your story.

For example, the lawn care proprietors’ fix” was to borrow whenever their cash flow was low (BI in “A Diagnostic Journey through the Archetype Family Tree”). As they serviced their mounting debt, however, the fix came back to haunt them in a “Fixes that Fail” structure (R2).

A Diganostic Journey Through The Archetype Family Tree

Working through the family tree reveals that what began as a simple balancing process(borrowing to meet cash needs) becoming a “Shifting the Burden” structure, in which the real leverage is to tighten financial control.

The lawn care proprietors sensed they were trapped in a “Shifting the Burden” process because they were not addressing the more fundamental issue of weak financial controls (B3). The borrowing fix was making matters worse by reinforcing a “loose” spending mentality (R4). Having diagnosed the situation, they could take effective action by focusing more attention on the root causes of their problems — low income and high spending — by tightening their budget and investing in better financial management tools.

Experimenting

Experimentation is key to using the archetypes most effectively. It is probably most useful to look at a particular situation or problem through the lens of several different archetypes, moving through the “tree” as needed. You may find yourself combining archetypes, adding loops and links to adapt them more completely to your story. By the time you have gleaned what you can from them, the loops may be five or six generations removed from the original archetype with which you began.

Michael Goodman is vice president of Innovation Associates (Framingham, MA). Art Kleiner has a long-standing background writing about business, environment, and systemic issues. This material will appear, in a different form, in the Fifth Discipline Fieldbook (Doubleday, forthcoming Spring 1994) .

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Caffeine Addiction

It’s 6:00 a.m. on a Monday morning. The alarm clock blares, jolting you out of bed. You shuffle down to the kitchen and grab a cup of fresh coffee. A few gulps and…ahh. Your eyes start to open; the fog begins to clear.

10:30 a.m. — time for the weekly staff meeting. “I gotta have something to keep me awake through this one,” you think to yourself as you grab a cup of coffee and head into the conference room.

By 3:30 p.m. you start to feel that mid-afternoon energy low, so you head down toward the crowded coffee machine for another cup. “I really gotta cut down on this stuff,” you comment to the guy behind you in line. He nods. “I’m a five-cup-a-thy guy,” he confesses. “I just can’t give it up.”

Addiction

For most of us, the word “addiction” conjures up images of alcoholism and drug abuse or more “acceptable” habits such as coffee drinking — dependencies which are rooted in physical and neurological processes. It is not usually viewed as a social or organizational phenomena. But from a systemic perspective, addiction is a very generic structure which is quite prevalent in both social and organizational settings.

As a systemic structure, the “Addiction” archetype is a special case of “Shifting the Burden” (see “Shifting the Burden: The Helen Keller Loops,” September 1990). “Shifting the Burden” usually starts with a problem symptom that cries out for attention. The solution that is most obvious and easy to implement usually relieves the problem symptom very quickly. But the symptomatic solution has a long-term side effect that diverts attention away from the more fundamental solution to the problem (see “Addiction: A Special Case of ‘Shifting the Burden'”).

What makes the “Addiction” archetype special is the nature of the side-effect. In an “Addiction” structure, a “Shifting the Burden” situation degrades into an addictive pattern in which the side-effect gets so entrenched that it overwhelms the original problem symptom — the addiction becomes “the problem.”

With coffee drinking, the problem symptom usually is that you feel tired (see “Coffee Addiction”). When you drink a cup of coffee, the caffeine raises your metabolism, stimulating the body and making the mind more alert. But in doing this, it forces your body to deplete its reserves of energy faster than usual. When the effects of the caffeine wear off in a few hours, you have even less energy than before. You feel sluggish again and reach for another cup of coffee to get a jump start. Over time, your body begins to rely on the caffeine at regular intervals in order to regulate your energy and metabolism.

Organizational Addictions

In organizational settings, addiction can take the form of a dependence on certain policies, procedures, departments, or individuals. The way we think about problems, or the policies that we pursue, can become addictions when we use them without consideration or choice, as an automatic knee-jerk response to a particular situation.

Hooked on Heroics

A common yet very subtle example of addiction in companies is “crisis management” — fire-fighting. Most managers say that they abhor fire-fighting because it wreaks havoc on normal work processes and makes it difficult to focus on the long-term. Yet fire-fighting is a way of life in most companies. Its pervasiveness and persistence is a clue that maybe it is part of an addictive structure.

Suppose you have a new product development project that has fallen behind schedule. The timing of its release is critical to its market success. In fact, the delays have reached crises proportions. You decide to make it a high priority project and assign a “crisis manager” to do what it takes to get that product out on time. This new manager suddenly has enormous flexibility in what he can do to get the product out. When the product is launched on time, he is touted as the hero of the day.

If we look at crisis management from the “Addiction” archetype, the symptomatic problem is the prevalence of crises that occur in the company (see “Hooked on Heroics”). When a crisis occurs, someone practices great heroism and “saves the day.” The problem is solved and the person receives praise for doing a fine job. But what happens to the rest of the organization in the meantime? Oftentimes the solution causes a lot of disruptions which form the seeds of the next problems and perpetuate the crisis cycle.

The insidious side-effect of crisis management is that over time, as crisis management becomes the operating norm, managers begin to become dependent on the use of heroics — the need to have recognition and a feeling of accomplishment in an otherwise paralyzing institution. Usually there are roadblocks to taking action in the company: formalities and rules that say “No, you can’t do this,” “You have to do it this way,” or “We don’t have the resources.” Suddenly when there’s a crisis, people are given tremendous freedom and leeway and are allowed to do what they couldn’t do before. Once it’s over, there is tremendous fanfare: the hero is rewarded or promoted. Over time, the company becomes addicted to continually creating crises, pulling the organization through tremendous turmoil, and creating new heroes.

Breaking the Addiction Cycle

To identify “Addiction” dynamics at work, use the “Shifting the Burden” archetype as a diagnostic to ask questions such as: “What was the addiction responding to?”, “Why did we feel a need to engage in this behavior or create this institution in the first place?”, and “What are the problem symptoms that we were responding to?”

“Addiction” structures can be much more difficult to reverse than “Shifting the Burden” because they are more deeply ingrained. Just as you can’t cure alcoholism by simply removing the alcohol, you can’t attempt a frontal assault on an organizational addiction because it is so rooted in what else is going on in the company.

If your company is addicted to fire-fighting, declaring that there will be no more heroics may be the worst thing you can do. If heroics were the only way your organization knew how to release the accumulated pressures produced by ineffective processes, ending that practice may lead to an eventual explosion or systemic breakdown. To break the addictive pattern, you need to explore what it is about the organizational system that created the crisis and left fire-fighting as the only option.

Innovation

Is there such a thing as a benign or innocuous addiction? One could argue that some addictions are worse than others, and some may not be bad at all. The fundamental problem with any addictive behavior, however, is that it can lead an organization to become very myopic. The addictive solution becomes so ingrained that no other possibility seems necessary. Preventing corporate addictions requires the ability to continually see choices in a fresh way — to shun habitual responses.

The challenge for the learning organization is to get all the members of the organization to continually look at things with fresh eyes. That’s the essence of discovery…and the essence of innovation.

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With the emergency staff and two surgical teams fully occupied, the supervisor is about to direct staff to temporarily divert new paramedic patient arrivals to other hospitals. Two of the three closest hospitals already are diverting patients due to overload. A few minutes later, paramedics radio the Medical Center. They just picked up a woman near one of the diverting hospitals. She is having a severe asthma attack. She needs attention quickly. Can the Medical Center take her?

Such scenes as the one described above were occurring with greater frequency at the San Jose Medical Center (SJMC) in the late 1980s. A hospital goes on temporary diversion status when it cannot safely accept more emergency patients because of insufficient staff, operating rooms, or beds. In San Jose, the proportion of time in which paramedic patients were diverted to other hospitals gradually increased from a monthly average of 5% in 1986 to 35% in 1990 (see “Paramedic Diversion Rate” graph). The increase in paramedic diversions was not confined to SJMC. Other hospitals were experiencing diversion rates ranging from 25-65%. The county-operated hospital, which had the heaviest emergency patient load, also had the highest diversion rate — more than 80% in early 1990.

The growing diversion rates indicated a number of stresses in the San Jose community hospital system. Between 1986 and 1988, for example, the shift from scheduled admissions to emergency admissions grew at a six percent average annual rate. During the same period, demand for hospital critical care services increased by four percent per year.

While demand for these services was growing, actual hospital capacity for critical care services remained fixed or declined. The demand for emergency-origin patients had grown faster than capacity, and the community-wide emergency medical system was becoming dysfunctional.

Decreased Quality of Service

The community incurs tremendous costs when its emergency service system has such frequent closures. When paramedic diversion rates increase, service quality suffers because of the longer time delays as paramedics “circle” around looking for an open hospital. Not only is treatment delayed, but the paramedics are distracted from their patient care duties while they spend time on the radio trying to find an open hospital.

Since already overloaded hospitals are more likely to accept patients whose conditions arc less severe, medical conditions are more likely to be misrepresented in the field. And, as the paramedics’ frustration mounts, the number of patients brought in with no prior alert — and therefore no hospital preparation — increases. These unexpected arrivals only add to the overload and lengthen the already long wait.

Systems Thinking Approach

San Jose Medical Center was particularly concerned with the growing problem of paramedic diversions since it has a history of commitment to emergency medical service. SJMC operates the busiest of three designated trauma centers in the county, and its location near the center of the population and several freeways makes it a leading hospital for paramedic patients. But as the number of diverted patients from other zones had grown, SJMC’s capacity to treat patients from its own market was greatly reduced. The result was frequent patient backlogs at various points within the Medical Center.

To address this problem, our team of department directors and executives at SJMC applied a systems thinking approach to better understand and address the growing unavailability of Medical Center capacity for emergency patients.

The key questions we addressed were:

• Where are the highest-leverage points for improving our capacity to serve emergency patients?
• What will it take (resources, structural changes) to implement those strategies?
• How much of the gap between current diversion rates (35%) and our short-term goal of 12% can be reduced by internal interventions?

(Editor’s note: Readers may want to try their hand at answering the above questions and perhaps identify analogous “emergency service” situations in their own organizations.)

To address the problem of capacity constraints and paramedic diversions, the SJMC project team began by gathering subjective data. Our goal was to collect team members’ “conventional wisdom” (mental models) about the emergency care system — its problems, the causes, and possible solutions. We then identified measurable outcomes SJMC wanted to attain, compared our actual performance with the desired performance, and calculated the gap we needed to close. To develop a preliminary understanding of the potential leverage points within the system, we developed a conceptual model which described how the system works in terms of typical operational situations.

Domino Effect

When we looked more closely at current operations of individual hospitals, we found that when the county-operated hospital diverted paramedic patients, a nearby community hospital would also go to diversion status to avoid becoming overloaded and receiving “undesirable” emergency patients. This behavior worsened the impact on other hospitals, particularly SJMC, which would then receive both hospitals’ overflow (see “Domino Effect of Paramedic Diversions” graph). The overflow would cause SJMC to go into diversion status more rapidly, causing diverted patients to flow to the next hospital, and so on. In effect, a primary cause of the overall paramedic diversion problem was the ripple effects of capacity limitations at one hospital.

Our initial project goal had been to reduce SJMC’s diversion rate, because diversions meant not meeting one of our most basic responsibilities — to provide emergency medical care to our community. But now that we understood the broader community-wide system, we realized that the more SJMC increased its capacity in order to prevent going to diversion status, the more patients we received from other hospital diversions. The result was an even greater strain on capacity, and more SJMC diversions.

Shifting the Burden Structure

As long as other hospitals were diverting a significant proportion of paramedic patients, stepping up capacity at SJMC would simply result in our seeing more and more diverted patients until we exhausted our added capacity (loop BI in “Shifting the Burden of Emergency Care”). In addition, our efforts to increase internal capacity were unintentionally alleviating pressure on the system to resolve the broader problem — an overall lack of emergency capacity at the community’s hospitals (loop B2).

Domino Effect of Paramedic Diversions

When the county hospital and another area hospital go on diversion status, SJMC receives both hospitals’ overflow. As a result, SJMC is driven into diversion status more quickly, creating a “domino effect” of diversions throughout the community emergency service system (left).

We began to realize that the fundamental solution to the community-wide problem was a public policy intervention that would ensure that all hospitals maintain a generally “open” emergency medical service. That way, no one hospital or group of hospitals could disrupt the entire system.

Ironically, our previous capacity expansion efforts had masked the need for a public policy intervention (loop RI), because the burden of providing adequate emergency service capacity had been shifted to SJMC. We concluded that the single, highest-leverage solution to the problem was to implement public policy that would require all hospitals in the emergency medical care system to receive paramedic patients (except in rare instances).

Reframing the Problem

In light of the above insights, we revised our definition of the problem. It was now evident that external action was likely to have the greatest impact on SJMC’s diversion rate. Internally, however, several questions still remained: If the community-wide diversion rate were reduced to a reasonable level, would SJMC continue to have an emergency capacity problem? If new capacity were needed, which internal interventions will produce the greatest yield in terms of freeing up capacity and enabling more patients to be served? In order to address such questions, we developed a computer model.

Our initial work had provided a great deal of insight into the diversion/ capacity issue; the computer model now allowed us to leverage our understanding even further. If the initial phase took us from an understanding level of one to five, using the computer allowed us to leap to a level of nine. The model enabled us to test out specific policy recommendations, compare the results with other policies, and access which ones were more desirable — all without risking a single patient’s life or a physician’s career.

We tested alternative strategies for improving internal capacity such as adding staff, adding beds or operating rooms, altering protocol for paramedic diversions, improving system productivity, and moving patient bed locations. We then measured various outcomes: patient waiting times, number of patients treated, and financial result. Among the 35 suggestions that we originally collected from the project team, we were able to isolate two key leverage points: reducing treatment times in the critical care and telemetry units and improving the shared nursing arrangements among three departments to increase their ability to meet surges in demand.

Initial Outcomes

Our SJ MC team completed the systems thinking project in the summer of 1990. Since then, on the joint initiative of the Hospital Conference of Santa Clara County (which included SJMC representatives), the County , Medical Society, and the County Emergency Medical Services Agency, the San Jose community implemented a public policy that maintains an “open” emergency status at all of the community’s hospitals. Although it is still too early to evaluate the long-term results, the diversion rate virtually disappeared in the initial months. In light of the systems “rule of thumb” that quick fixes do not produce lasting results, we expect diversion problems may creep back up during the coming months. Over time, we may need to refine the public policy approach so that long-term adjustments are made and the system is restored to balance. In addition to working on the community-wide capacity problems, at SJMC we are currently using the insights gained from the computer model to develop strategies for improving our internal capacity.

Bette Gardner is a healthcare management consultant in Morgan Hill, California. She is applying systems thinking in her work at San Jose Medical Center and elsewhere.

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As Peter Senge points out in The Fifth Discipline, many organizations suffer from the same learning disability as the frog. Their internal detection mechanisms are geared for responding only to quick, dramatic changes in their environment, not to slow, more incremental ones. Hence, the same businesses that would sound all kinds of alarm bells if they experienced a sudden 5-percent drop in market share will quietly adapt to an annual 0.5-percent erosion over 10 years without recognizing this slow downward spiral as a crisis.

Although the boiled-frog syndrome has often been associated with the “Drifting Goals” archetype, there are many ways in which an organization can “get boiled.” In the “Shifting the Burden” structure, things seem to improve in the short term, even as the water gets hotter and hotter over time. Therefore, this archetype warns us about the long-term consequences of relying on a symptomatic approach to addressing problems.

The Urgency of Now

The “Shifting the Burden” systems archetype produces behavior quite similar to that generated by the “Fixes That Fail” structure (see “Fixes That Fail: Why Faster Is Slower,” V10N3). Both archetypes tend to cause people to take actions in response to acute problems, and both tend to reinforce the use of quick fixes. In this way, the two archetypes are driven by the urgency of the here and now, which leads to unintended consequences that end up making the original situation worse in the future.

The difference with the “Shifting the Burden” archetype is that it requires a deeper understanding of what’s needed to keep the system healthy than does the “Fixes That Fail” structure. This is because addressing a “Shifting the Burden” scenario often necessitates identifying not so much a solution to a problem but rather the fundamental capability that the organization needs to develop over the longer term.

Prudent Outsourcing or Shifting the Burden?

Let’s look at an example. In “Boiled Through Outsourcing,” we see a situation in which a refrigerator manufacturer faces a shortage of engineers to work on a new product design (labeled “Problem-Symptom Peaks” in the diagram). Management knows that they need to add more engineers if the company is going to be able to handle these kinds of projects internally. But because they must begin work on the new product right away, they choose to outsource the engineering to Company A.

BOILED THROUGH OUTSOURCING

The manufacturer faces a shortage of engineers to work on a new product design (problem symptom). Management knows that they need to add more engineers (fundamental solution). But because they must begin work on the new product right away, they choose to outsource the engineering (symptomatic solution). The company repeats the same dynamics time and again, lessening its own internal capability.

At the same time, because company leaders recognize the need to build up their own staff, they initiate actions to hire and develop internal capacity. However, those efforts quickly wane when the problem symptom—the need for experienced refrigeration engineers—declines because Company A is doing such a good job. Other, more pressing issues occupy the company’s attention, and the capacity-building effort gets put on the back burner until the next staffing shortfall occurs. At that point, the company repeats the same dynamics.

This approach leads to a pattern of behavior in which the problem symptom continually resurfaces. Each time, the company makes efforts to address both the symptomatic and fundamental problems. However, when the quick fix proves successful in handling the problem in the short term, the organization continues to rely on that tactic over the longer run. As a result, efforts to seek a lasting, more fundamental solution decline. If left unchecked, the company will eventually “boil” like the poor frog— that is, face serious financial and performance difficulties.

Breaking Out of a Reactive Orientation

Although choosing to invest in the more fundamental solution is better than pursuing a symptomatic solution, both actions are inherently reactionary. This is because the two approaches are driven by the need to solve what is currently wrong rather than by the desire to create the future you want. Hence, even opting for the fundamental solution can produce problem symptoms that come and go. This is because no matter how the symptom gets reduced, the amount of effort devoted to its solution varies with the severity of the symptom—it rises when the problem is acute and falls when it is “under control.”

FROM A REACTIVE TO A GENERATIVE ORIENTATION

Breaking out of a reactive orientation requires shifting from problem-solving to developing a vision of what you want to create—a generative orientation.

Breaking out of this reactive orientation requires a shift from problem-solving to developing a vision of what you want to create—a generative orientation (see “From a Reactive to a Generative Orientation”). In our example of the refrigerator manufacturer, this approach would mean having a clarity of vision about the kind of engineering capability the company wants to maintain and then developing that skill base—regardless of whether the organization is experiencing shortfalls at the moment or not. The company may still experience problems with staffing shortages during this time. However, when it encounters them, the organization will be able to use symptomatic solutions as temporary stop-gap measures, while it continues to steadily build its underlying capacity.

Does our refrigerator manufacturing example mean that all outsourcing is a case of “Shifting the Burden”? The answer to that question depends on your organization’s vision of what it wants to keep as its core competencies. If you inadvertently ended up outsourcing what you considered a core competency, such as refrigeration design, then you would be caught in a “Shifting the Burden” dynamic. On the other hand, if you decided that competence in payroll systems and health-benefit programs was not key to your core business, outsourcing those functions might be a prudent decision.

Out of the Boiling Pot and . . .

The “Shifting the Burden” structure shows that, in addition to refining our organizations’ mechanisms for detecting slow, gradual changes, we need to develop better direction-setting systems. Otherwise, we may improve at making course corrections but never clarify what course we really want to take. That approach would be analogous to our poor frog jumping from one pot to another whenever it feels the water heating up, but never pur-suing a more fundamental solution by seeking a nice lily pond instead. Even with improved temperature-sensing mechanisms, if the frog keeps hopping from one pot to the next, the odds are that, sooner or later, it will end up on someone’s dinner plate.

Daniel H. Kim, Ph. D., is publisher of The Systems Thinker and a member of the governing council of the Society for Organizational Learning.

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The “Helen Keller” Loops

The basic storyline in “Shifting the Burden” has been compared to the story of Helen Keller, the blind and deaf child whose parents’ attempts to protect her only made her dependent on them. Even though Helen’s parents were well intentioned, they shifted the burden of responsibility for Helen’s welfare to themselves. Helen learned that no matter what she did, her parents would accommodate her. And each incident reinforced her parents’ belief that she was indeed helpless. If it had not been for the determined efforts of Helen’s teacher, Anne Sullivan, who refused to let Helen’s handicaps prevent her from becoming self-reliant, Helen may never have achieved her true potential.

, “Shifting the Burden” to the Central Office Experts

Here’s the same sort of storyline, but in a company: A claims office in a local branch of Southeast Mutual, a large insurance company, is faced with a large, complex claim that requires more expertise than it possesses. The company’s central office responds by sending out its team of expert investigators and adjusters to take care of the situation while the branch office staff goes about their more routine business. All agree that the company cannot justify having teams of experts in every branch, given the cost and the fact that these complicated claims occur so infrequently.

, “Shifting the Burden” highlights an all-too-common human tendency to eliminate feelings of discomfort or pain as quickly as possible.

Besides, everyone knows that people who want to get involved with complex, technically challenging claims either have to move to Southeast’s central office or work locally for a different company. Gradually, the most talented people take those options, and it becomes more difficult to replace them with equally capable adjusters. The branch office begins to rely more and more on the support of the central office. In fact, as the central office expert team grows increasingly efficient at handling crises around the region, the branch seeks their help more and more often as the number of claims that cannot be handled locally increases.

At Southeast, the problem symptom was the pressure to process complex claims outside the experience of the branch adjusters. The symptomatic solution was to ask the central office to process these complex claims. One possible fundamental solution was to strengthen the local branch’s ability to handle at least some larger, more complex claims. True, this solution would have required an investment of management attention, expertise, training, and time, both for learning and practice. But it also would have led to learning on the part of the local staff, and would have strengthened the branch office’s overall capability.

Beyond Band-Aids®

“Shifting the Burden” highlights an all-too-common human tendency to eliminate feelings of discomfort or pain as quickly as possible. This tendency usually leads us down the path of focusing on symptoms rather than on more fundamental causes. By using this archetype, you can map out several short- and long-term solutions, and explore the role of the symptomatic solution’s side-effect on various possible fundamental solutions.

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