Why "Managing the System, Not the People" is a Systems Thinking Myth.

Today is trade deadline day in the NHL. There's an interesting rule, or lack thereof depending on your perspective, about how teams can leverage a loophole in the salary cap.

The NHL has a salary cap. That means each team has a limit to how much they can spend on their players. However, that only applies to the regular season. Teams can exceed the salary cap in the playoffs. The salary cap is an example of a system constraint that was put in place to balance competitiveness.

On top of that, the salary of injured players on LTIR (long term injured reserve) does not count toward the salary cap. The rule was put in place because if a player is injured and doesn't play in the regular season, the team can use that player's salary to acquire other players.

Then, coincidentally, the injured player is all better for the playoffs! This has happened 3 notable times. Vegas, Tampa Bay and Chicago all had a star player on LTIR and in all 3 cases, that player came back for the playoffs. Each of those teams acquired missing puzzle pieces and won the Stanley Cup in each respective year.

Fans say, "well, rules are rules!!"

Opposing fans say, "HEY!! That's cheating!!"

This is a classic case of well-intended constraints in a system causing different behaviour among the actors in system.

It's cute to read things like "don't manage the people, manage the system!" That will bump your social media stats but it's comically incorrect.

Managing the system IS managing the people.

Any new process, rule, or handshake agreement between actors in a system creates unpredictable results. The actors who institute these rules are wanting some new behaviour. Sometimes they get the behaviours they intended to encourage, other times they get the opposite, or unpredictable behaviours.

Deliver something every six months!

I worked in an organization where the VP leading a transformation shouted from the rooftops, "thou shalt deliver something every six months!". Our data showed the medium delivery time for projects was 14 months.

Some of you can already guess what happened: Most teams just cut scope and responded essentially with: "Haha Mr Smartypants, we met your demands!"

That's precisely what the VP wanted. He was smart enough to know what would likely happen:

1. Some people would be upset, and there would be a lot of noise to sort through.
2. Teams would cut scope, business people would complain for a year or so.
3. Eventually business folks would learn they didn't have to wait 14 months for stuff so they'll eventually prioritize better
4. Teams that couldn't, for whatever reason, weren't punished as there wasn't a performance metric in place.

Loose vs Tight Contraints

In the above story, that was a loose constraint. Meaning, the VP wanted an outcome and left it to the teams to figure it out. A tight constraint would have been "Using the new Agile COE framework, delivery something every six month by writing user stories and following Scrum."

For the record, even with loose constraints, the context of this edict was an agile transformation so it's entirely possible the loose constraint entered the people's heads but their brains heard the tight constraint.

Beyond the Soundbite

This is often attributed to Yogi Berra, "In theory there is no difference between theory and practice. In practice there is."

Real, meaningful change is hard so here are 5 questions you can ask yourself before intervening in the organizational system:

• What are the potential unintended consequences of this change? (Talk about past changes, what the intention was and what actually happened)
• Is this new constraint an impediment or a catalyst? (Loose constraints allow freedom and new behaviours to emerge. Tight constraints can become impediments that freezes the system or worse, become something coercive.)
• How will we gather feedback and adapt our approach as the system evolves? (What should we look out for? How often should we get feedback? What will we do with it?)
• Are we focusing on principles or simply adding more rules? (Principles are tough because they're personal. Are we putting in rules to make people follow, or should these 'rules' be guardrails?)
• How will we measure progress and success (Everyone wants measurements, but they're also tough to create. What will we observe that tells us we're progressing the way we wanted? What would we see if we're off the rails? What would be the outcome...and when can we expect to see them?)

For the record, the NHL is talking about making changes to that rule...which will invoke a different set of behaviours. Also for the record, my team, the Edmonton Oilers are going to leverage this rule and potentially have an extra $6 million to spend today so that rule is just fine and dandy with me.

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