Systems Analysis

The Power of Systems Analysis in Organizational Restructuring

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Last week we examined the Viable System Model (VSM) and looked at how it can support detailed systems analysis for organizations that are looking to restructure in light of significant external change. This week, we are showing how systems analyses such as those offered by VSM can help sports organizations to avoid long-term damage as they respond to the challenges created by the coronavirus pandemic.

Identify Key Functions

When faced with complex social, political or managerial issues, systems theorists typically champion an approach defined by interdisciplinary collaboration and diversity of thought. However, restrained by self-imposed silo-ism, many modern organizations have become inward-looking and less able to facilitate the collaboration, flexibility and free exchange of ideas that responses to complex challenges demands.

Approaching issues without collaboration, diversity of thought and a strong understanding of the systems within an organization often leads to ill-considered reactions to crises. For example, when faced with the need to cut 30% of cost from the business (as is the reality for many in the current crisis), it is common for organizations to respond by ‘salami slicing’ (cutting evenly) across all departments. Unfortunately this rarely solves the issue at hand and often serves to exacerbate its negative consequences.

Although an evenly-applied solution may initially seem to be a logical and fair course of action, treating all departments in the same way often ends up damaging the areas of the organization that deliver the greatest value. In reality, different departments deliver different levels of value, so a better approach is to identify the ‘key functions’ that need to be performed to ensure the organization’s survival through the crisis and future success after it.

To give a sporting example, we might consider a team that has invested heavily in analytics and uses its data expertise to generate significant competitive advantage. For teams like this, analytics is the lifeblood of the organization and enables it to punch above its weight in competition. In such a context, making sweeping cuts to the analytics department would make no sense as it would risk doing serious damage to the organization’s ability to create and sustain success.

The Power of Systems Analysis

Identifying those functions that are ‘essential’ as opposed to ‘nice to have’ is easier for some organizations than others, but how exactly is that process realized? The answer, at least in part, lies with systems analysis.

A properly conducted systems analysis, such as that offered by VSM, will reveal how  functions within the organization are currently performing and decide whether each function is as efficient as it could be. If not, then decision makers should identify the reasons for the inefficiency and either rectify the situation or remove the function. Not only does this process quickly clarify the functions of greatest value, it is also key to breaking away from the status quo to ensure that the organization is better placed to survive in a changing environment.

As well as identifying the areas for prioritization during a restructure, this type of systems analysis can help organizations to build a genuine knowledge of what is required to succeed, and which factors were driving any success they may have had in the first place. By truly understanding the factors that contribute to positive achievements, it becomes possible to take ownership of the ‘intellectual property’ of success at an organizational level.

Accelerating performance through alignment in this way can help teams to tune out the background noise and exclusively prioritize the elements of the organization that will help it navigate crises and make the greatest contribution to primary performance goals over time.

Interested in learning more about organizational restructuring? Download our latest research paper, ‘Back to the Future: How about a Beer?’

Image: H Shaw/Unsplash