Graceful Systems
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Pamela’s Blog:
The Energy Utility - re-imagined, re-invented


March 26, 2012

If you are reading this blog, if you are an involved stakeholder of energy utilities, then I assume you likely have knowledge about energy and energy utilities.  Some of you, however, may not know much about systems in the sense that I intend to use them.  This will serve as a short introduction.

There are many ways to see systems, to define systems, and to work with systems concepts in addressing opportunities and challenges.  Although the roots of systems thinking go back much farther, the last sixty years or so have many, many people in science, academics, business and other professions engage in concentrated work on systems thinking and its applications.  But a handful of ideas, for me, explains why I think combining energy utility industry expertise with systems thinking produces a powerful mashup from which we can take the perspective of the bird.

First, what is a system?  A system is two or more parts interacting to achieve a purpose and whose emergent behavior over time can be seen only at the level of the whole system.   Humans participate in many, many systems in the course of our lives.  We can all readily name numerous formal systems we are or have been part of: the schooling system; the health care system; an employing organization – a department within it, a work team within that department.  The espoused purpose of these systems is often expressed in the name we give it.  In addition, natural ecosystems surround us, expressing purposes of survival, reproduction, differentiation, evolution. 

And then there are what I will call informal systems.  These systems have an enacted purpose that we usually cannot “see”, let alone name.  We perceive these systems at work only by observing what is happening over time and then seeking to understand why that is happening. 

Both formal and informal systems share a few key characteristics.  The first, and why we even use the label “system,” is to denote emphasis on the whole that emerges from the interaction of the parts, rather than on the parts themselves.  And the whole is found by reference to the purpose.  Here’s a handy example that worked for me.  Imagine you are staring at a pile of car parts:   

It’s pretty clear it is not a system.  Is it a system, however, once the parts are assembled into a whole?  What is the emergent behavior that emerges from the interaction of these parts?  What is its purpose?  If you’re like most of us, you will say something like: “Well, its purpose is to move people and stuff around.”  If that is the case, then does this picture have all of the interacting parts needed to fulfill that purpose over time?  What else would you need for this system to fulfill its purpose?  A fully assembled carA driver for sure;  perhaps something to drive on.  This is the whole then that, in the case of the stated purpose, comprises the system.  Is this the only set of parts that might fulfill the purpose of moving people and stuff around?  Of course not. 

With both formal and informal systems, it is important to understand that any one person or group can “see” only a portion of the system.  The systems of most interest to us, natural or man-made, are highly complex; informal systems add the challenge that we can perceive them only indirectly and each person’s perception will differ. 

The next characteristic of a system is its circularity.   Cause produces effect but effect can, in turn, affect cause.   It is easiest to see this circularity when it happens closely in time and space.  For example, we know that in an interest-bearing bank account, the interest added affects the next interest accrual.    This little picture shows how this works.  But in a complex system, it can be much harder to perceive the affect of the effect on the cause.  Time and space may intervene. 

Last, “cause” is within the system, not “out there.”  I remember this characteristic by thinking of Pogo’s famous line: “We have met the enemy and he is us.”  Anything we, individually or organizationally, are experiencing is the result of a system of interactions and we are part of that system or we wouldn’t be experiencing it.  This is closely related to the notion that there really aren’t any boundaries between systems.  We distinguish systems to focus our attention but cause and effect don’t respect the boundaries we draw. 

And that brings me to the last systems-related concept I need to share in this introductory piece: mental models.  Variously called beliefs, assumptions, paradigms – each with a slightly different meaning – mental models are the simplified stories we tell ourselves about why things happen.  These are “if-then” stories of cause and effect.  If I eat, then I won’t be hungry.  If energy utilities earn income by investing in infrastructure, they will be motivated to over-invest.  We can think about systems only through mental models; mental models are how we think.  Mental models underlie why things came to be this way and why we think that they cannot be any other way.  They are powerful and even more so when unstated, even to oneself. 

Over the course of this blog, I’ll introduce many other terms, like feedback, structure, modeling, creative tension, structural conflict, and so forth.  But the core are systems and the way we perceive them – our mental models.

One Response

  1. M3 says:

    Simply brilliantly sophistcated.

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