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Welcome to the home of the Modern Farm Business® podcast, hosted weekly by Dean Heffta. Modern Farm Business translates proven methods and best practices from the business arena to today's modern farm leadership environment. We'll be learning from forward-thinking experts and discovering how to apply time-tested techniques to make real improvements on the farm.

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Apr 26, 2018

Our brains are wired to look for clear, simple cause and effect regarding what’s happing around us. If our baseball team is losing, it must be the manager’s fault. If we have an accident, immediately we look for who’s to blame. And if my business is making money, well—it must be because I’m gifted at business! You see, our brain’s desire to understand can lead us to oversimplifying the factors that contribute to our successes and our failures.

As leaders, it is important for us to recognize this—because effective leading requires a clear understanding of the world around us and the problems we have to address. We need to be able to apply Systems Thinking to our organization—be it our farm, school or church—everything has a system at work.

What is a system?
A system is simply a set of connected things that work together for some specific outcome. There is always a system at work, but usually the system isn’t documented—it hasn’t come about because we sat down and said, “Let’s create a system.”

Think about getting ready to start your day. You have a system, right? It’s a collection of activities that lead to you being ready. Maybe it starts with waking up, then brushing your teeth, then showering, then getting dressed, then having breakfast, reading the news, packing a lunch, then leaving the house. This is a system. You’ve never written it down. You may not have given it much conscious thought—but it is specific and separate things that collectively work to get you ready for the day.

We have these little systems everywhere. In fact, when you look at the results you are getting, you can look back and say, “The system is perfectly designed to give us the results we are getting.” If you go to a restaurant and get terrible service and awful food, their system is perfectly designed to deliver poor service and bad food. That understanding is what helps us to apply Systems Thinking. This approach leads us to analyze each of the parts of the system, how they interact with each other, and what the contribution is to the outcome. If we want our restaurant to deliver a better burger, we can’t just say the answer is buying fresher beef.

As farmers, if we want better yield we can’t just add more fertilizer. I think farmers are natural systems thinkers because they see how many factors contribute to the final outcome. Planting conditions, fertility, genetics, weeds, rain, sunshine, temperatures, diseases—all have their part in contributing to the end result. That same level of recognizing how complicated a business outcome might be is important to making sure we don’t over simplify our “fixes” to a problem.

How can I apply this to my world?
What Systems Thinking helps to protect us against is both oversimplification and what we’ll call symptom as problem. There are two approaches where systems thinking can benefit us as leaders. The first I’ll call re-view, and the second I’ll call pre-view.

Re-view occurs at the end of a project, or anytime you aren’t content with the results you are getting. It’s those moments at the end of a season where you want to capture the lessons to help your team learn or grow for next season, or those points where you say, “This just isn’t working!” Maybe you’re running out of holes on your belt, or perhaps the bank account isn’t going the right way. In this approach, you start at the result and identify the gap between what you are getting and what you want. This is key: There has to be clarity around what you want instead for an outcome.

Next you move into contributing factors. This is where you brainstorm, alone or with the team. You’re not hunting for people to blame for the results; you’re working to list possible contributions to the results. This is the foundation for you to apply a systems view of the causes. For example: You are frustrated that a construction project is three weeks behind schedule. You get the team together—and rather than looking for who is to blame, you start listing out all of the possible factors at work. Remember, a system is a collection of connected things working together for a specific outcome—so you need to see the linkages.

The team identifies a handful of potential culprits. The list grows with things like equipment breakdowns, being down two employees, weather factors, not having a tool that would speed up work, and waiting for the electrician. Keep in mind that as the leader, you want to avoid both oversimplification and symptom-as-problem. Oversimplification causes us to stop too quickly in making our list. Symptom-as-problem leads us to believe the actual problem is on the list we just came up with, when it probably isn’t.

The next step is to take each of these and ask questions such as: “What caused this to happen?” or “How could we have avoided this?” Take equipment breakdown, for instance. We might be prone to think the breakdown was unavoidable, but really dig into it. I had a situation like this with a client who was plagued by in-season equipment issues. As we got deeper, they acknowledged that they didn’t have a good system in place to go through their equipment in the off-season. In their case, the issue was several trucks that were causing problems. The challenge wasn’t the trucks having issue; the actual system issue was the lack of off-season maintenance process. By addressing this, they were able avoid “critical season” downtime, in which each hour is worth multiples to the business than that same hour is worth in the off-season. They addressed their system and ended up with a different result. Prior to this, the blame had been centered around the truck drivers and the old trucks.

Pre-view is looking at the system from a different time frame. Rather than looking at results we are getting and looking back at the system, we are projecting the outcome before we begin, then developing the system to support that outcome. Let’s say you decide to buy a car wash. You’ve never been in the business before, so you need to establish some desired outcomes. These could be amount of up-time, washes per day, profit per wash or whatever key outcomes you identify.

So you begin with the outcome, and then design the system to support that outcome. Let’s look at up-time. You want to have 96% up-time on your four wash bays. Because car washes have a lot of moving parts and potential things that could go wrong, you start designing your system to address the potential problems. You brainstorm all the potential problem areas; you talk to suppliers of equipment about best maintenance schedules; you talk to people that have operated washes like yours. Through this process, you are creating the system to support the up-time. This system becomes the routines, the regular actions that you or someone on your team has on the calendar to do.

Once you have the system laid out, it becomes easier to have others fulfill the steps. It also becomes easier to identify points that need to be adjusted once you are running the system. Maybe you have your initial schedule to change water filters every ten days, but you quickly find that your water requires they need to be changed every seven. Easy adjustment can be made to your system to make sure you are getting your results you want.

IN SUMMARY:
Step one of systems thinking is about separating the results from the activities the lead to those results.
Step two is getting clear about each of the contributing steps that work together to create the outcomes we are getting.
Step three is making adjustments to the steps to improve our results.

Remember, a system is a collection of activities that work together to produce some specific outcome, and that every result we get is because of a system that is in place.

As the leader, be cautious of oversimplifying cause-and-effect relationships, and be curious enough to be sure whether the first problem you run into isn’t actually just a symptom of the real issue.

CHALLENGE:
In your world, identify a couple of outcomes—one you’re happy with, and one you aren’t so happy with. Sit down with a piece of paper and try to write out the system that contributes to each of them. Identify the key steps, and look for ways to simplify and improve how you get those outcomes.

 
If you have questions or comments, email me at dean@modernfarmbusiness.com. Be sure to tell a friend about Modern Farm Business Podcast. Thanks for listening, and I look forward to being with you again next week!