Even so, the end can often be staved off with the application of courage and vision. IBM and Kodak saw what would happen if they continued down their respective paths. In 1990, IBM knew that the market for large computers would eventually desert them, while Kodak could see that digital cameras would soon replace film cameras. IBM radically transformed itself from a seller of “big iron” into a consulting company that also sold computer systems. Kodak, on the other hand, tried to preserve its profitable film business too long, starving their digital investments in the process. There’s still meaning in the Kodak brand, but little momentum in the business.
Entropy causes fast-moving things to slow down, and order to collapse into chaos. There’s a price to pay for maintaining any kind of difference or individuality. When you see the limits approaching, getting around them is theoretically straightforward: If it ain’t broke, fix it. What’s not so straightforward is convincing others to follow. After all, things are still pretty good, aren’t they?
8. Success to the successful, or why “the rich get richer and the poor get poorer.” In Grandma’s day there was a popular song that struck a chord across the country:
You load sixteen tons, and what do you get?
Another day older and deeper in debt.
Saint Peter, don’t you call me ’cause I can’t go—
I owe my soul to the company store.
The song was sung to chain-gang rhythm by Tennessee Ernie Ford. And what it captured was the harsh reality of Industrial Age mining towns, in which workers couldn’t afford to leave and couldn’t afford to stay. The main source of groceries and other goods was the company itself, and the mark-ups became usurious. This created a vicious cycle in which the workers increasingly owed the store more than they made, and therefore could never leave.
In ecology, the rich getting richer and the poor getting poorer is known as the Competitive Exclusion Principle. It says that two species can’t continue to live in the same habitat and compete for the same resource. Eventually, one species will win a larger share of the resource, giving it an advantage in future competition, until it becomes impossible for the other species to compete. Finally, the winner takes all, and the habitat suffers from a lack of variety.
This is the situation the US finds itself in now. The moneyed have become increasingly powerful by virtue of their wealth, which has allowed them to rewrite the rules in their favor. As the rich have gotten richer, more of the middle class has joined the working class, and now the wealthiest are feeling the economic pinch of a consumer population that can no longer afford the products that their investments depend on.
The way out of the success trap is by leveling the playing field. In past situations like the current one, we’ve used techniques such as strengthening labor unions, passing antitrust laws, and levying estate taxes. Other possible techniques are closing income tax loopholes, launching social programs, and limiting the power of lobbyists. Perhaps the most sensible rule is simply to match the power of the public sector to the power of the private sector. When one half is able to dominate the other, the Exclusion Principle kicks in and the economy gets the bruises.
9. The wrong goal, or “be careful what you wish for.” The behavior of a system is determined largely by its purpose. Since the purpose of Fannie Mae was to enable home ownership for as many Americans as possible, we shouldn’t be surprised that it worked. Financial institutions were happy to embrace the purpose by cutting corners and lowering standards, secure in the knowledge that Fannie Mae would cover any losses. Somewhere along the line, the goal of the system changed from “responsible homeownership” to “increased homeownership.” Systems have a way defaulting to the shallowest goal instead of the deeper goal we had in mind.
The well-intentioned goal of the No Child Left Behind Act was to improve the quality of US education by making sure students performed well on a standardized test. Sounds logical, right? But when the government made test scores a prerequisite for funding, the de facto goal became good test scores, not good education. Many schools immediately diverted their attention from teaching to testing. Others ignored subjects not on the test. Still others focused on the midlevel students who were most likely to make a difference, giving less help to struggling students who were likely to fail, or gifted students who were likely to pass on their own. Funding was the all-glittering prize. In the process, the best teachers lost interest in teaching, since there was little room left in the system for individuality.
The way to avoid the wrong-goal trap is to separate effort from outcome. Any system directed toward effort is likely to produce effort. Any system directed toward outcome is likely to produce an outcome. So the measurements, indicators, and other feedback loops must be focused on the ultimate goal of the system, or risk the surprise of unintended consequences.
There are other archetypes as well, but you can see that the common threads are feedback loops and feedback delays, behaviors that make the world more complex and unpredictable than we’d like. As Grandma reminds us, “One thing leads to another.” And another, and another, and another, until the result looks nothing like the intention. This could be extremely dangerous as our systems scale up in size and complexity in the Robotic Age.
Systems thinking is the counterweight to intuition, the metaskill that makes the best use of our rational brain. Donella Meadows sums it up like this: “Obvious. Yet subversive. An old way of seeing. Yet somehow new. Comforting, in that the solutions are in our hands. Disturbing, because we must do things, or at least see things and think about things, in a different way.”
The primacy of purpose
The thing that exerts the most influence over a system is what’s often the least obvious—its purpose. The purpose of a system is its overriding goal, the reason it exists. For example, the purpose of a thermostat is to keep the temperature at a predetermined level. The purpose of a blood cell is to carry oxygen throughout the body. The purpose of a leaf is to turn sunlight into energy. The purpose of a bicycle is to turn walking into riding.
These are relatively simple systems. As simple systems become more complex, they show signs of self-organizing. They begin to diversify, structure themselves, and adapt to external changes in order to maintain their existence and improve their chances for success. Think of plants, animals, companies, governments, societies, and ecosystems, all of which have the ability to respond to external changes on the fly. In a complex adaptive system, the purpose not only sets its direction, but suggests rules for behavior, produces feedback about performance, and addresses problems as they come up.
Social systems are particularly complex, since—let’s face it —they’re full of people. Anyone serving on a committee can attest to the difficulty of working within a social system. Each member has a different personality, a different set of experiences, a different skillset, a different world view, a different relationship with each of the other members, and a different mood—depending on the time of day, what he or she had for breakfast, and an infinite number of other factors. Now scale the committee to the size of a company, community, or nation. The only hope of getting this many people to work together is a strong organizing purpose.
The organizing purpose of a company can be defined as the reason it exists beyond making money. Beyond making money? Isn’t a company in business to make money? Yes, but if profits are primary, it may have trouble keeping customers, attracting talent, and building a culture that can sustain the business. Management expert Peter Drucker famously said that the only realistic definition of a business purpose was to create a customer. This may have been news to traditional business leaders a few decades ago, but even this is too narrow when measured against a backdrop of systems.
Let’s look at some corporate purpose statements to see what kind of systems behavior they’re likely to produce.
The stated purpose of Apple is “to make a contribution to the world by making tools for the mind that advance humankind.”
The purpose of se
curity-software maker Symantec is “to create confidence in a connected world.”
The purpose of Patagonia, a maker of outdoor clothing, is “to inspire and implement solutions to an environment in crisis.”
Now contrast these three statements with the following three.
The purpose of Chevron is “to achieve superior financial results for our stockholders, the owners of our business.”
The purpose of Office Depot is “to be the most successful office products company in the world.”
The purpose of Ametek is “to achieve enhanced, long-term shareholder value by building a strong operating company serving diversified markets to earn a superior return on assets and to generate growth in cash flow.”
Which of these companies would you rather work for? Which is most likely to turn you into a passionate customer? Which ones would people miss if they went out of business? And, finally, what do their purpose statements predict about their behavior? “Systems, like the three wishes in a fairy tale,” says Meadows, “have a terrible tendency to produce exactly and only what you ask them to produce.”
If a company’s purpose is to achieve superior financial results, the company is likely to achieve superior financial results. In the process, it may also mistreat its employees, damage the environment, or bend the rules, which, over time, will undermine the very financial results it was seeking. If a company’s purpose is to inspire solutions to the environmental crisis, it’s likely to inspire solutions to the environmental crisis. And it’s also likely to achieve decent financial results in the process, because it knows without sustained profits it can’t carry out its higher purpose.
A company’s purpose, norms, and shared meaning are the “self” that it organizes around, and which serves as a compass for all of its plans. This is the first step in building a durable brand. A participant in one of my brand strategy workshops summed it up nicely: “You can put your hat on first or you can put your boots on first. But before that, you have to decide you’re a cowboy.”
The what of purpose drives the how of behavior. Akio Toyoda explained that Toyota’s recall crisis only happened because a few executives forgot their commitment to quality. “Some people just got too big-headed and focused too excessively on profit,” he said. Maybe, but Toyota’s purpose is “to sustain profitable growth by providing the best customer experience and dealer support.” Were the executives simply sacrificing the how to get the what? A better purpose statement for Toyota might be “to bring the highest quality cars to the most people at the lowest price.” Now there’s a statement that leaves no ambiguity, and fits Toyota to a T.
A society, too, can have a purpose, although we may express it more as a vision. Comedian Eddie Izzard said that the American Dream is to work hard and buy a home, while the European Dream is to hardly work and own a motor scooter. Both of these seem like improvements on what’s actually used to measure success—gross national product. GNP is merely a record of consumption, bearing little resemblance to what gives a purpose to a society. In the United States, for example, our shared purpose is to thrive by virtue of a responsible commitment to freedom and happiness. Our purpose is not to continually increase consumption.
Robert F. Kennedy, during his 1968 election bid, clarified the difference with considerable eloquence: “The gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.” By focusing on consumption rather than happiness, we’re actually damaging both, because a happy society is a more productive one.
And what about you? Is there value in choosing a personal purpose? According to psychological research (and ordinary experience), having a sense of purpose is a powerful driver of happiness. A new field called positive psychology is exploding right now, based on evidence that people who live their lives with purpose are more likely to enjoy longevity, have better health, and stay free of dementia. In one seven-year study, people who reported a lesser sense of purpose were twice as likely to develop Alzheimer’s disease than those who reported a greater sense of purpose.
The more consciously you define your personal purpose in life, the greater your chances of success and happiness. The Industrial Age discouraged the idea of individual purpose among workers, since it needed identical parts to plug into the big machine of business. The Robotic Age, on the other hand, rewards individual purpose, since it needs the creativity of flesh-and-blood humans who know who they are and think for themselves.
Sin explained
One of the great gifts of religion has been the codification of good and bad into a system of rules that can easily be remembered, applied, and passed down from one generation to the next. The Ten Commandments are a good example of codification. In fact, the rules of all the world’s religions are fairly similar, deriving from one master principle that says we should treat others the way we ourselves would like to be treated. When we break any of these rules, the infraction is called a sin.
But what exactly makes a sin a sin? Can we better understand the nature of sin by looking through the lens of systems? Yes, we can, and it could lead to our salvation. While the concept of commandments was practical in a simpler age, in today’s era of financial derivatives, artificial intelligence, social networking, and genetic engineering, we need to think on our feet. We need to see the connections between actions and outcomes while taking latency into account. There are very few traditional sins that aren’t also bad behaviors from a systems point of view. But there are many more bad behaviors that can’t easily be codified into commandments. Systems thinking lets us dispense with a legalistic view of ethics and see with our own eyes how good and bad operate in the real world.
For example, “Thou shalt not kill” is a good rule of thumb, but it doesn’t always hold true in actual practice. Depending on the culture and the situation, humans have known to kill convicted murderers, intruders, protesters, spies, unwanted fetuses, unfaithful women, and political enemies, all despite the fifth commandment.
Eisenhower warned against the military-industrial complex, but what about the military-religious complex? It’s on full display in cathedrals such as Westminster Abbey in London, where the bloodiest warriors are enshrined alongside saints and clerics, often with more fanfare. Apparently, we take “Thou shalt not kill” and other commandments more as suggestions than as rules. Like Groucho Marx said, “These are my principles. If you don’t like them, I have others.”
The problem with commandments is that they’re blunt instruments. They discourage reflection and encourage rule-beating. The Bible, like the Qur’an, is full of contradictory statements that can be used to support either helpful or harmful behaviors, though its spirit is clearly aimed towards truth, beauty, and goodness. If we’re to make any progress in this direction, we need to stop using religious texts as rulebooks, and start thinking through the real consequences of our actions over time.
Truth is neither relative nor absolute. Philosophers of the Enlightenment believed everything could be known, and all truth is fixed. Postmodernists asserted that nothing could be known apart from its context, therefore all truth is relative. But systems thinkers are more likely to see truth simply as an evolutionary process of inquiry—dynamic, continuous, and communal—in which our notions of what is true and good become stronger and more widely accepted as we go.
In their parablelike book, The Gardens of Democracy, authors Eric Liu and Nick Hanauer call for a “new Enlightenment.” They reject such dichotomies as modernism vs. postmodernism, liberalism vs. conservativism, and small government vs. big government. Instead they draw a distinction between self-interest and selfishness. They take the
view that true self-interest is mutual interest. In a social system, there’s no long-term winning unless everyone wins, and when some of us lose, we all lose. “It makes sense to be self-interested in the long run,” they say. “It does not make sense to be reflexively selfish in every transaction.”
We can easily tell ourselves that bad is actually good if we consider only the near and the now. For example, it felt really good to shove my friend under a bus yesterday when I was angry with him. It feels bad today, because I realize I’ll miss him, and my actions will send waves of sadness and loss through the community for years to come. My bad behavior was initially good behavior—but only for me and only for the moment. This is the subtext of novelist P.D. James’s mysteries. Instead of presenting murder as merely a puzzle to be solved, she goes further and reveals the crime’s devastating effects on everyone connected with it.
A working definition of sin, therefore, is any act that values selfish, short-term good over unselfish, long-term good. From a systems viewpoint, evil is merely good that hasn’t been thought through.
Why look at it this way? Because it makes human behavior more comprehensible, and it gives us a framework for assessing new or complex situations for which there are no commandments. Scientists have talked about a “dangerous flaw built into the brain” that causes a preference for instant gratification. Our feelings are thrilled by the prospect of quick rewards, but we’re shortsighted when it comes to consequences.
To combat this tendency, we can ask ourselves two questions: 1) How will my action affect others? And 2) what will happen over time? When you play these out in your head, you may discover that what seemed like a good idea at first is not in anyone’s long-term interest, including your own. Your ability to think whole thoughts—to see how one thing leads to another over time—is a crucial skill in the Robotic Age, given technology’s scope for producing large-scale unintended consequences.
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