Socialists and Systems-Thinkers Can Co-create a Better World.

The idea that a few hundred people who call themselves ‘systems-thinkers’ and the many millions who call themselves ‘socialists’ need each other to achieve their highly-complementary ambitions has only just occurred me. However, the more I think about it the more it makes sense if we want to make the world a far, far better place.

I can’t explain my reasoning properly in a few dozen words because the idea of socialists and systems-thinkers combining forces to co-create a better world is so rich and exciting that new confirming thoughts demand my attention all the time. Moreover, it is such an important idea for both ‘systems-thinkers’ and ‘socialists’ that it deserves to be given some space to breath and find its feet, as it were.

Ultimately, however, my reasoning comes down to three basic premises.

First, as the section on W.Edwards Deming and Stafford Beer shows, ‘socialists’ and ‘systems-thinkers’ share a wide range of fundamental values and aspirations

Second, ‘socialists’’ need ‘systems-thinkers’ to help them to manage successfully the hugely complex system-transformations they have promised the voters to deliver.

Third, ‘Systems-thinkers’ are in the business of transforming complex human systems for the benefit of everyone who works or lives in or depends on the system, not just for the top 1% to 10%. Such aims are incompatible with the purposes of the current neoliberal-managerialist regimes but fit very well with the visions of the people I am calling ‘socialists’

What do I mean by ‘socialists’?

“What is ‘socialism’? Oysters for all.” Danny Cohn-Bendit

Basically, by ‘socialists’ I mean the people who have been enthused by and voted for the ideas and manifestos put forward by political leaders like Jeremy Corbyn, Bernie Sanders and Jean-Luc Melanchon. I am sure that very few of the many millions fitting this description have ever even read Marx, and still fewer would call themselves Marxists. Instead, if they have any firm political principles, they will see themselves as following in the steps of Clem Attlee or Franklin D. Roosevelt or even Leon Blum.

The kind of socialists I am talking about have not won a national or federal election for many years. But, in Britain at least, there are thousands of them in charge of major departments in local government both as elected Chairs and as senior officers. This is also true in the USA and France.

Given a chance, systems-thinkers could make a huge difference to the sensitivity, effectiveness and flexibility of their Councils’ key services. Sadly, it is highly likely that only a few ‘socialists’ in local government have a clue that such a thing as ‘systems-thinking’ even exists still less that it offers a way that they can achieve very beneficial transformations in the services they are responsible for providing.

If asked, however, I am sure many of them would be willing to explore how such economical, effective, elegant, ethical and enjoyable processes of transformation would fit with their needs, values and aspirations.

But, they are rarely if ever given the chance. Instead even if they have a comfortable majority, they are enmeshed in managerialist cultures and systems that assume that capitalism is inevitable, universally beneficial and morally neutral.

In the UK, for example, whether a Council is nominally Tory or Lib. Dem or Labour, its Human Resource managers are invariably hostile to any serious involvement with the trade unions, since they are ‘partisan’. Nor should front-line members of staff participate in decision-making or systems-design processes: even less the sevice-users. They are not to be trusted, raise awkward questions, lack deference and can get emotional. Instead, such crucial tasks are handed over to ‘non-partisan’ (and hugely-expensive) consultants from McKinseys, Price Waterhouse Coopers, KPMG, E&Y, Microsoft, Accenture and the like. These are the very people, of course, who may well have sold the frustrating, dysfunctional, unfriendly systems that are currently causing so many problems and costing such large amounts of money.

System-thinking in action

“If we want to be able to respond to the challenges that face human life on this planet, then we need to research and teach about as many different forms of organising as we are able to collectively imagine. For us to assume that global capitalism can continue as it is means to assume a path to destruction. So if we are going to move away from business as usual…It means doing away with what we have, and starting again.”

(Why we should bulldoze the business schools, Martin Parker, The Guardian April 27 2018

A friend of mine is a systems-thinking consultant, working — by choice — mainly in the public sector. Ultimately, he sees his job as ‘transforming the relationship between the public services and the public’. He does so by helping his clients to apply the concepts and methodologies of systems thinkers like W. Edwards Deming, Taichi Ohno, and John Seddon to improving the quality, friendliness and reliability of the services they are providing for people who desperately need them.

At the same time, the costs of the service typically go down by a third or a quarter and sometimes more, the job satisfaction of the staff rises sharply, huge backlogs melt away, turnaround -times reduce by as much as 90%, sickness and absenteeism plummet, and the service-users are highly satisfied with the new ways in which the service is being delivered.

It is important to understand that these benefits flow from co-creating better systems that cut waste, duplication and opaqueness in the old systems not by reducing the use of human and other resources.

Invariably, this work entails not just improving one or more of the expensive, dysfunctional and frustrating systems. It often means junking those systems altogether.

After a few years of applying systems-thinking to constantly improving services, almost every trace of the old ways of thinking have been left behind. Obsolete managerialist shibboleths like economies of scale, performance-related-pay, semi-annual evaluations, outsourcing, arbitrary targets, activity measurements, incentives, managing costs, personal budgets, front and back offices, internal markets, will be mere memories.

Over the past thirty years or so, as they have personally and professionally experienced the extraordinary benefits of using systems thinking to transform their organisations, a few thousand managers in the UK have abandoned their old ways of thinking for ever. But they are a tiny minority, probably less than 1% of the million or so people earning over £80,000 pa, and thus occupying management positions of some kind. The vast majority of British managers in the public and the private and the voluntary sectors will be locked-into some form of ‘macho’ managerialist mind-set. All too often, these regimes can be deservedly labelled ‘management from hell’.

Why is there such a huge imbalance between managers who understand and use a systems-thinking approach to improve the performance of their organisations and the obsolete thinking of 99% of their peers? And, what, if anything can systems-thinkers do about it?

Why Systems-thinkers should realise they are engaged in a political struggle.

The consultant-friend I mentioned earlier was responsible for two very successful systems-transformation projects in two very different departments of a local authority. However, in spite of the support of the CEO, he was blocked from working in two other departments because the directors threatened to resign if the CEO insisted on extending systems-thinking into their domains.

He, and most other systems-thinkers have similar experiences almost every time they work with a large public or private organisation. Sometimes it is a matter of personality-clashes or incompatibilities. We can be rather abrasive and impatient with managers who are resistant to our ideas, and that is not good for business. But even the most emolliant and patient of us frequently encounter surprising levels of hostility and even venom simply by suggesting a systems-approach to improve the services that are performing badly.

We know that we offer ethical, economical, effective and enjoyable ways for people to join together to successfully tackle their organisations’ complex problems. Thus, its hard to believe that to some senior managers our approach is an affront to all they believe in and a denial of their whole life’s work. So, all too often, even when we’ve done an excellent job in one part of an organisation we rarely are able to extend the systems-thinking approach into the organisation as a whole because in so doing with we are comitting a kind of blaspheny against what are ultimately deeply political traditions.

When, however, a systems-thinker clicks with the people who have an uncontested mandate to transform not just one organisation but a large number of them, the results can be spectacular, historical and mould-breaking.

I’ll give two examples: one from Professor W. Edwards Deming (Born Indiana, 1900 -1993) and the other from Professor Stafford Beer (Born London, 1926–2002)

Norbert Weiner called Beer ‘The Father Of Cybernetics’ and although he and Deming operated in different areas of systems-thinking they were firm admirers of each other’s work and achievements.

Deming’s story is familiar to most systems-thinkers and it starts with a famous dinner in a Tokyo restaurant in July 1950. There, Deming gave a presentation on how to improve the quality of ther products to 20 Chief Executives of Japan’s most important manufacturing companies. From this short presentation came the widespread adoption of Deming’s ideas that is acknowledged to be the foundation of ‘The Japanese Industrial Miracle’ of the 1960s to today.

Deming built his presentation around a simple diagram of the enterprise as a system:

Starting at the left Deming talked about the flow of materials, information and work around the system. He began with the Inputs, especially those from suppliers, and worked his way through to the Consumers on the right hand side, and emphasised the importance of their contribution to improving the performance of the system through their feedback on their experience as a customer.

What was so radical and appealing about the presentation was, as Wikipedia says, ‘ Deming’s message to Japan’s chief executives was that improving quality would reduce expenses, while increasing productivity and market share.’

To this day, Deming’s revolutionary, counter-intuitive message is ignored by most US and UK managers whether in manufacturing or in service industries. They simply cannot see how increasing quality can reduce costs and increase productivity. But, when a systems-thinking approach is adopted, Deming is always right, and the traditional managers are always wrong.

Whether it is watches or motor cycles, pianos or computers, cameras or TV sets,over the last half -century the world has come to take for granted the innovativeness, quality, value and durability of goods that are“Made in Japan”. Consequently Japan rose rapidly after Deming’s lecture from a war-torn wreck to one of the world’s leading economies.

Does that mean that Japanese workers work harder than ours? By no means. As Deming said, using systems-thinking, ‘Japanese workers work less hard. They work smarter, not harder. They produce more with less and less effort as the quality goes up.’ o

From the early 1960s, as soon as Japanese products began out-competing their Western counterparts on every front, industry leaders were loudly demanding the imposition of punitive tariffs against them. But Western managers and management gurus had no idea of the key role that Deming and systems-thinking had played in creating ‘the Japanese Industrial Miracle’.

Then in 1980 an American journalist, Clare Crawford-Mason, made a NBC TV programme called “If Japan can, why can’t we ?”and focussed on the impact that Deming had made in Japan.

American CEO’s could not ignore him anymore. In response to a flood of requests and invitations, Deming started to give several four-day seminars a year to explain his ideas and became a consultant for Boeing, Ford and Nashua among others.

From 1981 to his death in1993, he gave 250 4-day seminars in the USA, attended by a total of over 120.000 people.

Deming’s teaching has been applied to vastly improving the quality of education, health care, local government servicer, restaurants, banks, insurance companies, and retail businesses,.

Yet, his ideas are still only patchily understood, rarely taught in business schools, and, if they are introduced, only half-heartedly adopted.

The reason, it seems to me, is that he is too much of ‘a socialist’ to be a mere ‘quality-guru’.

The constant goal of his work was to transform management practices from top to bottom. He said that management does not concern only production and service companies but also public administration and education. He was scathing in his condemnation of the global obsession with markets, competition and shareholder-value and deplored the huge financial losses, poverty and unemployment that they caused.

Deming was determined that his style of management should contribute to improving human relations in society by softening the climate of violence and fear that is the norm in so many organisations.

Which fits very well with the kind of world that socialists want to see.

Stafford Beer’s story is much less well-known. It starts with his meeting in 1970, with Dr. Salvadore Allende, the ‘Marxist’ President of Chile.

Beer was pitching his proposal for the Cybersyn Project to Allende. With Cybersyn, Allende’s government could revolutionise ‘the exercise of National Government’ by managing Chile’s economy in real time by a (then) very advanced application of ‘management cybernetics’.

Throughout the 1960s Stafford Beer had been arguing that if things are changing very fast, then government needs instantaneous information. If its information is out of date, then its decisions are worse than irrelevant. Thus:

Let us get rid of all the time lags. (and have) here-and-now management of the economy that is not based on historical records, but on an immediate awareness of the state of affairs and the projection of that awareness into the short-term future.

Make a dynamic model of the economy, concentrating our power of resolution on the areas in which our decisions appear most unsure or most frightening, then we shall learn how the system operates.

The core-process of Cybersyn was a computer-generated animated visual display of a few thousand data-returns that were produced every day at 5 pm by a representative sample of Chilean businesses.

Beer built his presentation to Allende around explaining the five levels of ‘The Viable Systems Model’ (VSM).

This is how the meeting went:

When I first expounded the cybernetic model of any viable system to President Allende, I did so on a piece of paper lying between us the table. I drew for him the entire apparatus of interlocking homeostats in terms of a neurophysiological version of the model — since he is by profession a medical man. It consists of a five-tier hierarchy of systems. I worked up through the first, second, third and fourth levels.

When I got to the fifth and topmost box, I drew an historionic breath — all ready to say “And this, companero presidente, is you”.

He forestalled me “Ah” he said with a broad smile: “at last — the people”.

I do not care what political outlook any of us may have: that story ought to convey a profound message. It deeply affected me, and it affects this work.”

As he reflected on Allende’s intervention, Beer began to amplify the aims the Cybersyn project…

I wanted Ministers to have a direct experience, an immediate experience, an experimental experience. And what goes for ministers, goes for managers, whether managers of the social economy or of enterprises or plants.

If participation has any meaning, no-one must be disbarred because of an inadequate grasp of jargon, of mathematics, of high-level rituals.

The workers themselves must have access to the whole of this. Society can no more afford the alienation of the people from the processes of government than it can afford their alienation from science.

In Chile I know that I am making the maximum effort towards the devolution of power. The systems …are designed for workers as well as ministers to use. We are working on feedback systems to link the people to their government.

Within a year or so, Stafford and his teams in Chile, the UK and Germany had connected a central computer to around 500 economic units strung all along the 3,000 kms length of Chile, and every evening were receiving five key numbers from each unit via ancient TELEX machine.

Even though it was far from fully-implemented, during 1973, the Cybersyn system was used to generate the instant data the Allende government needed to fight-off — in real time — the constant stream of economic attacks that its internal and external political enemies fomented to bring the country to its knees. Nothing, however, could repel the treasonous military coup that General Pinochet led and Washington and Whitehall enthusiastically supported.

Stafford was in London when Pinochet launched the coup. Allende committed suicide as the Chilean air force bombed the Presidential Palace. In the round-ups and disappearances that followed, the Cybersyn team barely escaped with their lives and, of course, all the computer technology developed for Allende was destroyed and dumped by Pinochet’s thugs.

Nearly fifty years later, a government at any level could use today’s much more sophisticated hardware and software to create its own version of the Cybersyn project at a very modest cost. For socialist governments updating Stafford’s work would have the added attraction of embodying his — and Allencde’s — belief that

Society can no more afford the alienation of the people from the processes of government than it can afford their alienation from science.

As Stafford and Allende intended in Chile, 21st. Century socialist governments could use their own versions of Cybersyn to develop ‘feedback systems to link the people to their government.’

Just think, for example, if we had a Cybersyn system that enabled national and local governments to link to its citizens in a system that would enable them to take an active part in the processes of reducing our emissions of greenhouse gases.

Socialists and Systems-Thinkers vs ‘The Big Six’

Every year the UK government spends around £1B — £1.5B on outside consultants. The bulk of that money goes to six firms: Price Waterhouse Coopers, KPMG, Deloitte, Ernst&Young, McKinseys, and PA Consulting. And even that is only part of the story. Only 38% of the work done by these firms is classified as ‘consultancy’. Managing outsourced service, legal and financial advice and research comprises the other 68%: a total of around £3B -£5Billion a year paid to just six firms!

If that was not worrying enough, a spokesman for the Cabinet Office justified the extensive use of consultants on the basis that when key skills are not available within the Ciivil Service, “we’ll need specialist expertise, especially where government is undertaking complex transformative projects and needs to draw upon experienced minds.’

And these firms, of course, have played a major role in the introduction of neoliberal-managerialist ‘reforms’ into every part of the public services whether in Whitehall or the Town Hall.

So, when Jeremy Corbyn is Prime Minister and wanting to implement his transformative manifesto, a phalanx of ‘Sir Humphrey’s would make every effort steer him and his colleagues towards the ‘experienced minds’ of the Big Six.

Unfortunately, for Sir Humphrey, Corbynand his Shadow Chancellor, John McDonnell, are not fans of at least four of the Big Six.

They are well aware that PricewaterhouseCoopers (PwC), Deloitte, Ernst & Young (E&Y), and KPMG have donated the services of many economic and taxation advisers and consultants to assist the Labour Party’s policy-making processes in the past.

Between November 2011 and December2014, PwC donated over £600,000 in services to Ed. Milliband’s Shadow Treasury Team to help shape its taxation policies. The Labour Party Treasury team got over £300,000-worth of advice from KPMG in 2012, 2013 and 2014. Deloitte kicked in with £165,000 in 2014.

Its this a good way to run a democracy? Not according to former Labour MP Austin Mitchell. He told ‘The Accountant’ in May 2015 that:

(The Big Four) are so dominant in such big centres of power, that they permeate government by providing staff and transferring people over and recruiting the high-fliers from government for their own purposes.

Governments give all sorts of concessions, like limited liability partnerships. .. which prevents all the partners from losing their yachts and houses and big money in the event of a lawsuit against them.

I think their power is a threat to the public sector.

This view is undoubtedly shared by Jeremy Corbyn and John McDonnell. In a speech about the Panama Papers scandal McDonnell told House of Commons:

We have to be honest about this

PwC have … aided tax avoidance “on an industrial scale”.

Deloitte have advised big businesses on avoiding tax in African countries.

E&Y act as tax advisors to Facebook, Apple, and Google.

KPMG has had one of its tax avoidance schemes declared illegal by the High Court.

All together, the Big Four accountancy firms earn at least £2bn annually from their tax operations.

Not surprisingly, since Corbyn became the Leader of the Labour Party, ‘The Big Four’ have ceased providing their services in kind to the Shadow Cabinet.

So, if not the Big Four or Six, then who?

Who, between now and winning the next General Election, can Jeremy and his Ministers look to for support and guidance in managing the transformation of the complex systems on which the 99% depends?

Surely it’s a no-brainer.

Corbyn and his colleagues should be asking ‘systems-thinkers’ to help prepare them for implementing their transformative programme. And systems thinkers should be offering to help Corbyn and his colleagues to be fully prepared to manage the transformation .

The same goes for the hundreds of Labour Councils who are increasingly being led by socialists who, like Corbyn, are determined to transform their towns and cities. They will not want to spend a penny of their budgets hiring any of the Big Six if there are practical alternatives in view.

So, my socialist and system-thinking friends, isn’t it time you got to know each other better?

P.S.

One last thought: We all start from ‘macho-management’ as our default position.

Systems-thinking does not come naturally to anyone. It is an ever-evolving ensemble of concepts and methodologies that has to be learnt and tested and practiced and constantly refined.

Systems-thinking is to ‘macho-management’ what chemistry is to alchemy, or astronomy is to astrology.

However, whether we are systems-thinkers or not, we’ve all been brought up with a macho-worldview on management and leadership. Letting go of those ‘macho’ assumptions and behaviours that were reinforced in families, schools, colleges, churches, jobs, games, plays, films, newspapers, TV, radio and, increasingly, the internet, takes a lot of dialogue, work and thought. Even the most effective and experienced systems thinkers still retain many characteristics of macho-managers in their behaviours outside their professional life.

However, if we want to transform our society so that we leave a just, sustainable and caring future for our children and grandchildren, letting go of the old ways and embracing a systems-thinking approach to socialism is essential.