Computation skills demonstrated using whole numbers, fractions, decimals and percentages manually and with calculators.

 

Why HR leaders needs to be systems thinkers

Systems’ thinking is more complex than it first appears to be. So let's gather some background before we make a change. It underlines how crucial it is to only make judgements after considering their effects on the overall system.

While making plans, it's critical to keep in mind the numerous external circumstances that have an impact on the framework in which the workforce functions. Politics, society, religion, and other strong influences are examples of these external, systemic forces

Systems Thinking Applying as Workforce Strategy

What are the most important, systemic influences on the workforce around the organization, and how do these influences shape an HR strategy? Here are some examples of systems where the workforce is heavily influenced by an external factor. By definition, these systems face a unique set of challenges. 

Industry	System(s) Exerting Influence	Impact on Workforce Plans
Arrange workforce and trades people	Government regulations Right-to-work, collective bargaining	A firm has a lot of freedom to recruit and fire employees however it sees fit in the absence of organized labour. Workforce planning is governed by regulations and negotiating agreements that limit how a company may set up its staff when organized labour is a system component.
Seasonal agricultural labor	Regulations governing agriculture workers and the availability of labour	Products are priced by manufacturers to reflect their particular expenses. A full-time, permanent workforce does not need to be planned for by manufacturers who have access to inexpensive, seasonal labor, but it is necessary for those that do not.
Energy	Environmental responsibility, social pressures, worker safety, and government regulation	Government policies need quick changes in the workforce. The system as a whole consists of several interconnected units. The proportion of environmental and safety employees in the workforce rises during times of increased social pressure and/or tighter regulation.

You'll notice that several industries on the chart have an all-or-nothing workforce, which isn't a formal word. Or, to put it another way, workforce planning is focused on a particular objective, and if the system turns against the company's objective, a workforce is not needed.

Systems thinking for organization design and management

Systems thinking is a problem-solving approach that sees complex organizations as a series of components, each of which interacts with and influences the others.

The approach can be applied to organizational management: the various departments, units and groups – components – of a large organization are seen to continuously interact and influence each other. In fact, they behave collectively as a system.

The performance of the system is largely determined by how the system is configured and how the elements interact, not simply the results of the actions or efforts of individuals.

Therefore, instead of looking at the efforts of individual employees, business leaders must take a 'whole system' perspective to maximize organizational performance.

Seeing the whole

To get the full picture, leaders need a deep knowledge of the entire organization, its various moving parts, and how each component affects the rest. But there is much more to systems thinking.

Business leaders must understand the adaptive nature of systems. As dynamic entities, systems adapt to changes imposed on them – often with unpredictable results.

Therefore, leaders need to know how their actions in any part of the system affect the whole. It is still rare that most senior managers spend enough time understanding their system, given the inevitable pressures on their time.

Supply and demand

Particularly in the public and private sectors, a huge gap in knowledge is a genuine understanding of the demand and supply sides of the equation.

First, how much demand is there on the system? When and where is the organization's output needed? What are the possible peaks, troughs and seasonal variations in demand? What external factors affect demand and how?

And most importantly, find out how much demand there is because the system isn't delivering what it should have supplied in the first place.

On the supply side, leaders need to understand their organization's ability to provide the goods and/or services it provides. How much staff time is being wasted through non-core activities or unnecessary work?

Systems theory can help leaders understand capacity constraints. This means they are better positioned to move through the system effectively and identify the resources needed for work to avoid deploying resources in the wrong place.

Behavior

Leaders must adopt the right management style and avoid a purely controlling mindset. They must recognize that the performance of their system is as much a factor in its design as the work performed by its employees.

Problems such as poor performance, low morale or stress in the workforce are often caused by problems within the system itself. Their focus should be on visualizing system problems – and in practice, not blaming the workforce for problems with design flaws in how processes and systems are configured.

Importance of systems thinking in HR

Creating a culture of systems thinking is not a quick task. It takes time to embed the knowledge and behaviors needed to make decisions and take actions that benefit the system as a whole.

With this in mind, systems thinking should not be the preserve of a select group of senior leaders.

A whole-of-systems perspective can only be achieved by developing the ability to map workflows and processes across the entire workforce. In this way, any change in the system can be initiated with a clear idea of the goals and purpose of the organization.

HR teams are already well placed to drive systems thinking in organizations, with a less targeted approach than employees in general and a better view across all departments.

While shifting an organization's culture can be a slow process, HR can initiate a whole-systems approach through their own processes, including onboarding and performance reflection.

Reference

 

Karam, S., Nagahi, M., Dayarathna, V.L., Ma, J., Jaradat, R. and Hamilton, M., 2020. Integrating systems thinking skills with multi-criteria decision-making technology to recruit employee candidates. Expert Systems with Applications, 160, p.113585.

Thite, M. and Bhatta, N.M.K., 2018. Soft systems thinking approach to e-HRM project management. In e-HRM (pp. 42-56). Routledge.

Uysal, G., 2017. Core of HR Strategy: System Thinking and HRM. Uysal, G.(2017). Core of HR Strategy. Management Studies.

Uysal, G., 2016. Core of HR Strategy: System Thinking and HRM. Journal of US-China Public Administration, 13(8).