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culture, deming, improvement, Uncategorized

No Systems Thinking in Trump’s Plans

It’s inauguration time and a new administration is moving into the White house attempting to fulfill its promise to “make America great again.”  A key to Donald Trump’s platform throughout the election had been the need to drive fast and significant change in government structures and systems.  Some Americans find this approach refreshing.  What I’m seeing, though, is a lack of a systems thinking in the plan, and it concerns me greatly.

APPRECIATING THE SYSTEM

The U.S. operates as a system.  Federal departments and agencies, businesses, states, citizens, and even foreign entities act as components of the system that interact and drive results that, although far from perfect, enable the country – and to some extent, the world – to function.  As with any system, there must be a clear and unified purpose to help drive objectives and improvement.  The more complex the system, the more important it is to understand how the system works and how the components interact to assure changes do not end up making things worse.

Making large-scale changes to components of a system without understanding how they interact amounts to tampering, and can quickly lead to chaos.  And what I’ve seen in the comments, tweets, and appointments in the new administration, this appears to be  exactly what’s happening.  Talks of closing borders, eliminating the Affordable Care Act, turning education focus to charter schools, cutting environmental regulations, etc. look more like fragmented actions than steps resulting from a deep understanding of how the system operates and where the real gaps lie.  In lean terms, the Trump team is developing countermeasures to problems without truly understanding the causes.

EXAMPLES OF FRAGMENTED THINKING

Some examples that appear to result from a lack an understanding the system include:

Import Tariffs  On the surface, raising import tariffs to increase domestic jobs sounds like a good idea.  The effect this has on U.S. purchasing habits and the American and world economies, however, is complex and not easily understood.  For instance, there are many economists who believe that the Tariff Act of 1930, along with the retaliatory responses of many U.S. trading partners was a significant contributor to the Great Depression due to the negative effect on American exports and imports.  Exports fell because of higher tariffs on American-made goods and, because the prices of imported good increased, people bought less overall.

A second, but difficult to quantify consequence of significant tariff increases is the effect on developing nations that rely on access to the U.S. market to continue growing.  The administration wants to build a wall along the U.S.-Mexican border to keep people from crossing into the U.S. illegally.  Since many of those coming into the U.S. from Latin America do so for economic reasons, raising tariffs and pressuring manufacturers to scrap foreign factories to build in the U.S. will result in lost jobs and other problems for those countries.  It seems logical then, that this action could actually increase the number of people attempting to cross into the U.S. to escape poverty.  And this does not take into account the fact poor economic conditions tend to increase drug trafficking.

A third, but rarely considered effect of restricting trade with other countries is reduced influence on the working conditions that exist in some countries.  Improvements in labor conditions in many developing countries have resulted from the influence of American companies and trade groups because of the size and power of the U.S. market.  As we reduce imports, we reduce our ability to influence international labor laws.

Scrapping the Affordable Care Act

The Affordable Care Act (ACA) has been a huge source of political strife since it was enacted in 2010.  Whether you agree or disagree with the effects of the ACA, it is important to understand and recognize that the Act is a component of the healthcare system which, in turn, is a component of the overall American system.

A systems approach to dealing with the problems from the ACA is to improve it – not scrap it and start from scratch.  It includes understanding the problems – i.e., why they are problems and what is causing them – and taking steps to reduce or eliminate them.  Although completely replacing a system may address some of the problems, it is likely to create many others that are not problems with the current system.

THEORY AND LEARNING MUST DRIVE ACTION

Raising import tariffs and scrapping the ACA are just two examples where actions meant to drive improvements can lead to negative consequences if done without a holistic understanding of the system.  As long as I remember, though, American politics has never taken action resulting from a deep understanding the nation as a system.  Fortunately, the changes have rarely been large enough to cause major problems in the American system.  What I’m hearing now about the coming changes, however, I’m very concerned that the damage could be long-term and significant.

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About Gregg Stocker

Gregg Stocker is a lean advisor for Hess Corporation. He possesses over 20 years experience in a variety of disciplines including operations, manufacturing, human resources, quality, and strategic planning, and has worked in manufacturing, service, and oil & gas industries. He has extensive international experience, including successfully leading an $65 million business in The Netherlands. He authored the book, “Avoiding the Corporate Death Spiral: Recognizing & Eliminating the Signs of Decline,” (Quality Press, 2006) and was a contributing author to "The Lean Handbook," (Quality Press, 2012). Gregg is a frequent speaker and recognized expert in business and performance improvement having been interviewed on television, radio, and in a number of newspaper and magazine articles including The New York Times, Washington Post, BusinessWeek, and InformationWeek. Gregg has implemented change in organizations ranging in size from $10 million to more than $100 billion. He is a team-oriented leader who achieves results by improving teamwork, focus, and communication throughout the organization.

Discussion

4 thoughts on “No Systems Thinking in Trump’s Plans

  1. Hi Gregg, I appreciate the reminder on the importance of getting to a good problem definition and thereby to root causes which could allow sustained improvements rather than changing out problems for other, potentially worse, problems. I’ve noticed that there’s often pressure on leaders to “just do something” about vivid and compelling issues. In a true crisis, temporary countermeasures are necessary but it seems as though we often either stop there or decide to toss out the whole thing and put a new system in place. It seems to take unusual discipline to clearly prioritize issues (not necessarily the most popular ones), clearly define the problem, get to root cause understanding and design/execute effective countermeasures. In politics, perhaps one could get by with temporary countermeasures for popular issues which working small improvement projects in the background to create sustainable improvements to the system once the eye of public attention moves on to the next issue. Not sure that would work for Trump’s presidency given the promises of his campaign.
    -Justice

    Posted by jd1ven | January 22, 2017, 3:26 pm
    • Hi Justice. I agree that a 4- (8-, at most) year term is not enough to truly drive change . . . especially given the fact that changes will take longer when serious political differences enter the picture. The problem I’m trying to highlight here is the long-term damage that can occur when major components of the system are drastically altered or abandoned without understanding how the system works. This is what I’m seeing, and frankly it scares me.

      Another important point of systems thinking is that a system must have a clear purpose (mission, vision, and objectives). “Making America great” is nothing more than a slogan without clarity around the vision and objectives, which will help identify the gaps and can help make sure that actions in one part of the system do not negatively affect others – or the system, as a whole.

      As usual, thanks for the comments.

      Gregg

      Posted by Gregg Stocker | January 23, 2017, 4:14 am
      • Thank you for the clarification. In other words without a clear definition of the system, it more likely that changes will cause harm than benefit which then may be prohibitively difficult to fix given the limitations of the political system (or any organizational system, I suppose).

        Posted by jd1ven | January 23, 2017, 8:41 am
  2. Gregg,

    Good post! You are right that there is a lack of systems thinking and understanding the interconnectedness of the components of the economic system. Talk of tariffs has been particularly unsystematic. For every action there is a reaction and if we impose tariffs on China, China will react immediately. Note that 50-60% of all agricultural output in the U.S. is exported. China is the largest single consumer of those products. Take note Iowa, Kansas, etc.!

    Mr. Trump has never been an operator. The real estate business is about “deals”, short term transactions. Operating an automobile company, or most other companies, is not about deals. It is about operations and relationships that are built on trust. It is a very different mindset.

    In regard to the health care plan: Why can’t we practice continuous improvement? Politicians paint everything in terms of binary good versus bad, white hats versus black hats. The ACA made some improvements to the health care system. It is not an end state! It needs to be improved. Microsoft Windows 1.0 was an advance, but it has been through endless continuous improvements. All companies operate on this assumption. We have to encourage our government to do the same. I think continuous improvement is an aspect of systems thinking.

    Cheers,
    Larry Miller

    Posted by Lawrence M. Miller | January 23, 2017, 11:05 am

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