| The Global Imperative |
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If local optimization does not work, then what does work? The answer is
that all decisions need to be made with a view of what is going to be most
beneficial to the organization globally |
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"Global" applies to the entire organization, not only in it's present form,
but as it will evolve into the future. |
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QPI Principle One explicitly states that decisions should be made in a
balanced manner to benefit all stakeholders. That certainly embodies a
global view. It also has a major impact on how decisions are made. It forces
one to take a long-term view and also to consider the effects on every
part of the organization. |
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QPI Principle Two recognizes that all components of the organization are
either directly or indirectly connected to all other components and that
every action that is taken will have a global effect that may significantly
transcend the local effects. |
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Therefore when any decision is made it is imperative to answer the question,
"What will be the long-term global effect of the decision?" Of course,
Principle One implies that it should be positive in a global long-term
fashion. |
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Principle Three recognizes that organizations are non-linear in behavior
and that all actions including very small ones can have quite profound
long-term global effects. |
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Just getting managers to recognize the interconnectedness, the exponential
nature of many processes, the non-linear "Butterfly Effect" (the fact that
small seemingly insignificant actions can have significant long-term and
global effects), and to acknowledge that the decisions of the organization
should be made to the benefit of all stakeholders of the organization
will cause a profound change in the way decisions are made. |
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This can affect pricing, compensation, environmental policies, strategic
planning, dealing with suppliers, customers, and even competitors. |
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As the analysis becomes more sophisticated one can become involved in sophisticated
organizational modeling whereby organizations are viewed as very complex
dynamical systems. Simulation models can be constructed. "What If?" games
can be played on simulators, and often very non-intuitive results will
become apparent from various actions. |
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Peter Senge in his book, The Fifth
Discipline, gives a nice overview of some of the things that have been
learned from modern dynamical business theory. This has its roots in the
work of Jay Forester and is continued in research and application at such
places as the Sloan School of Business at MIT. |
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The first three QPI Principles will profoundly change the thinking on decisions
and the way decisions are made in organizations that adopt the QPI System. |
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