Systems Thinking

“The System is the Solution”

Systems ThinkingSeveral years ago, I ventured into the concepts of Systems Thinking. So the the first thought as I am writing this is who cares about Systems Thinking….it reads like some abstract….intangible idea with no real life application. Well….stay with me on this.

Peter Senge wrote The Fifth Discipline which is the cornerstone of the Systems Thinking principles.

“Systems thinking is a framework that is based on the belief that the component parts of a system can best be understood in the context of relationships with each other and with other systems, rather than in isolation.”

Systems Thinking is looking at all the parts of a business or organization and determining how they all fit together to create value greater than the sum of  the parts. This is like getting the Big Picture of things and the problem in many situations is that people like and are only interested in one part of the business or issue.

Here’s two examples:

  • In my post on The End….the people in this group were fixated on the declining financial picture. They failed to understand that the financial picture was the result of not understanding their market and developing a product that the market would be interested in. All of the components of an organization are connected together and not separate entities in themselves.
  • The current issue of health care often debates about specific issues rather than the healthcare system as a whole. Allan Webber wrote:  “Rule #7 says “The system is the solution.” . The only way health care reform makes sense is to see it as a system, not a series of disaggregated choices or random unconnected episodes.”

Thinking about the whole business is at times harder than actually doing business.

The leaders of the best business/organizations, I believe are always thinking about the Big Picture.

http://en.wikipedia.org/wiki/Systems_thinking

http://en.wikipedia.org/wiki/Peter_Senge

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It’s Final

The Paper Mill

Paper Mill - Muskegon LakeOne of the manufacturing icons of Muskegon is gone. Sappi, the South African company, that owns S. D. Warren announced that it is finally closing the local mill after 109 years. Over the years, hundreds of people worked there. My grandfather was a blacksmith at the mill in the early 1900’s.

While there were two paper machines….only one was in use the last few years and employment had fallen to about 150 people. The mill produced fine coated paper….the heavy paper used in annual reports. Sappi has other, more modern mills that have the capacity and, more than likely are able to make the products cost effectively.

The mill is situated on Muskegon Lake. Someday….I would hope it finds an even better use for the next 100 years.

The end result:

  • We operate in a global economy
  • Customers and products change
  • Business continuously must change

The End

Mediocrity! – The Peter Principle

EndI’ve written in the past about a non-profit group that I have been connected with.  It became clear that the current path this group was  following  was self-destructive. These folks had declined so much that  decision making was taken out of their hands as they were part of a larger organization. As the situation grew increasingly dire….with declining numbers and financial resources….their 1 + million dollar facility was sold. The organization moved quite rapidly from:

 Grasping for Salvation to Capitulation to Irrelevance.

So what were the reasons and what can be learned….

  • Not understanding of the organization’s original values
  • Failure to understand the market or the customers
  • Unwillingness to examine and adapt the product
  • Diluted purposes both individually and collectively
  • Unprepared and ineffective leadership
  • Acceptance of the status quo
  • Refusal to accept outside advice
  • Inability to get the right people on-board

In my opinion this endeavor and the resulting outcome was a classic case of :

The Peter Principle is the principle that “In a Hierarchy Every Employee Tends to Rise to His Level of Incompetence.”

http://en.wikipedia.org/wiki/The_Peter_Principle

In this situation….this is the case where the national group and the local group rose to their level of mediocrity.

Home – Part 3

Business Highs and Lows

Muskegon has a very high unemployment rate….over 15%….although in the past it has always been above the national average. As the industrial base declined….no new industries or business sectors could replace that lost base. While Muskegon does have lovely Lake Michigan beaches….it is not Traverse City ( the desirable vacation area in Michigan). Here’s what I observed:

Turbine bladeThe largest employer is Alcoa Howmet. Howmet uses Titanium investment casting to manufacture turbine blades for use in aerospace and industrial gas turbine blades.  The origins of Howmet date back to 1951. Since jet engine technology is always advancing….this company will be in the area for many years. Alcoa was recognized by Fortune magazine as the world’s most admired metals company….very nice for the community.

www.alcoa.com/howmet

  • Some restaurants were packed. It’s the summer season. Golden Corral has a business model to bring in the customers. Would I return, No!
  • One of our favorite restaurants was less than full….the quality has deterioted. There is absolutely no reason for not putting out a good product.
  • Wal-Mart and Meijer (the Midwest Wal*Mart competitor) Supercenters were doing well.
  • There was new building taking place, though many buildings old and new were vacant.
  • The housing market is at a very low level….too much inventory….not enough buyers.
  • Regardless of the economy….people seem to be persevering….it must be the solid Midwest values.

While we won’t return as often as we have in the past….I still read The Chronicle everyday….check the Big Lake out….and always  hope  times will be better in Muskegon.

Home – Part 2

Good Things

In the last post….I said I was discouraged about my visit to Muskegon. While it may take longer than a few years for any significant growth to take place….the perseverance of the community will continue to prevail. No, Muskegon will never be like where we live in North Carolina….however, it will still be home. Some more thoughts on our visit:

LumberjacksMuskegon has been home to minor league hockey with a great legacy. For over 50 years, it has been the Zephrys, Mohawks, Lumberjacks, Fury and Lumberjacks again. Moose Lallo was a popular coach…. what a name for a hockey coach. And Jeff Carlson aka Jeff Hanson from the classic hockey movie Slap Shot played for the Mohawks.

This is real hockey!

  

Milwaukee ClipperThe Milwaukee Clipper, The WW II Submarine Silversides, and  LST 393 reside in Muskegon.  The clipper for many years traveled between Muskegon and Milwaukee. Today….a high speed catamaran, The Lake Michigan Express, makes the same trip. All three of these famous ships have been restored by the local community….that says a lot about the dedication of folks to keep these ships history alive. 

MKGMuskegon County Airport. As a pilot I often flew from our local airport. Now it has two 6000+ prevailing wind runways, instrument landing systems and fine ground facilities. Any community would be proud of an aerodrome like this. However, only Delta/Northwest has three daily flights to Detroit. For many years, commercial flights were also made to Chicago and Milwaukee. As business rebounds….the real benefit of MKG will be to the corporate/business segment of aviation. 

Frauental TheaterThe Frauenthal Theater is really a grand gem and the cornerstone of a reconstructed downtown. It is of a classic moorish design and the center for the symphony and theater in Muskegon. The Frauenthal was built in 1929 and renovated in 1998. Fortunately there is foundation that helps keep it a viable part of the community.

 

 These are the good things and accomplishments that Muskegon can be proud of.

www.muskegonlumberjacks.com

www.milwaukeeclipper.com

www.silversides.org

www.lst393.org

www.frauenthal.org 

Home

Just  a few more years.

We were in Michigan for the past ten days….below is Muskegon….

A fine harbor on Lake Michigan. Ships enter Muskegon Lake through the channel. The city and port are at the top of the photo. In its heyday, 50-70 ocean-going ships visited Muskegon annually….traveling from the Atlantic  through the St.Lawrence  Seaway to the Great Lakes. There are still deep water ships that enter the Great Lakes, but few visit Muskegon.

Muskegon-Harbor

 

 

 

 

 

 

 

 

This trip will be one of the last to my hometown. In some respects it was discouraging. As I wrote before, Muskegon is a Midwest industrial town. Manufacturing bowling balls, tank engines, automotive engine blocks, office equipment, piston rings and cranes was its mainstay. For the most part, manufacturing on a large scale no longer exists….that’s not say there are not specialty manufacturers and those that remain are pretty good.

Over time, the story was always the same….just wait a few years….Muskegon will really grow. Well that hasn’t happened.

 IMG_0775

 

 

 

 

 

 

Signs like this are so numerous….at least the sign companies are doing well….that it looks like anything other than prosperity. The infrastructure is in poor shape. The housing stock is old. The old downtown area was completely torn down and new buildings are slowly being erected. There is even a first class Harley-Davidson dealership in the new city center. However, as a sign of he times….a very nice airport….yet with only three daily flights to Detroit.

Exploring for the last time….I wondered if Muskegon would ever change. If so, it has to: Grow local businesses ( by implementing the concepts  of Economic Gardening) and make Muskegon at least semi-attractive for businesses to even consider Muskegon and Michigan as a good place to do business.

Unfortunately, It may be more than just a few years for things to change.

Buyer-Seller

Confidence + Credibility

I’ve written before….about our home renovations.

The products are quite similar. Every window starts to look the same. All the roofing contractors seem to prefer Certainteed. There are way too many counter-top colors.  So how are the choices made? Is it Price….Quality….Consumer Rating? In the end it’s all three . Yet, I think  a major factor is the:

Buyer - SellerBuyer-Seller Relationship 

How does the sales person reflect the company? What type of relationship develops in that hour when the presentation is made? Do I feel confident in this person and in the company? Now here is the twist in this interaction. I am only dealing with the sales person….not the company owner. So I may get a whiz-bang sales guy and a “C-” business. I don’t think that’s the case….I ‘m calling on my business experience to sift through these sales calls.

At the end of the day….the decision will be made on:

  • Price
  • Quality
  • Rating
  • Relationship

DanceThe buying-selling process is like a dance. Do I feel confident in this sale partnership….so that we can perform the dance (buying process) successfully and gracefully?

Make the buyer – seller relationship….Outstanding.

It is always Products and People!