Jeannette Hanna is one of the brightest brand strategists I have known in my professional career. We first met when I interviewed for a position at Spencer, Francey, Peters in Toronto. My impression of the company was a smart, laser-focused company integrating organizational design, brand strategy and identity systems. Jeannette had a lot to do with this impression presents herself as thoughtful, infusing intelligence into conversations about the purpose and focus of branded systems. She is also an American that has become a cross-cultural translator between two countries that often are seen as the same (Canada and the United States).
Since the first time we met, Jeannette is now part of Trajectory, a brand consultancy that continues to create sustainable brands in a world of commoditization. Strong intellectual scaffolding around purpose, goals, and actions is what Jeannette thinks and consults about. These efforts led her to co-author Ikonica, A Field Guide to Canada’s Brandscape, the first systematic look Canadian brands and their cultural distinctions. Hanna’s thesis in the book – that culture, commerce and community mores are highly inter-dependent – transcends the Canadian context.
When we reconnected, Jeanette mentioned that she was focusing on systems thinking. My interest is also in systems thinking, design thinking and design methods. When I put together the proposed structure of the interview questions focused on systems thinking from a rational and technological perspective. When Jeannette and I had the actual interview, it became clear that her perspective of systems thinking is influenced by nature and natural systems and reaching for what makes us human.
Here answers are very informative and connect the values of organizations with the behaviors and beliefs of the markets they endeavor to serve.
What do you mean by systems thinking?
It is basically learning from nature, which operates on some very simple rules. All complexity is built on these simple rules. As author Margaret Wheatley reminds us, nature has built all her rich complexity from a few simple principles for millennia, so it’s highly likely that they also apply to human systems like business. For me, nature is a much more useful metaphor for understanding dynamics that we’re all feeling but don’t have an adequate vocabulary for right now.
My interest in systems came out of my research for Ikonica that explored what really makes brands tick. There are three interdependent attributes that are key to consider: commerce, culture and community. But each of those big categories are systems as well. As David Grey points out in his excellent new book, The Connected Company in our highly networked, interdependent economy, companies must shift their mode of operating from the idea of efficient machines to becoming organisms that are constantly adapting to their environment
So, if you must learn to adapt as an organism, it’s helpful to understand how the basics of biology and physics relate to business. For example, there are five well-documented elements of sustainable systems:
Purpose – Systems are relationships based on purpose and value creation. Who do you create value for and who creates value to you?
Reciprocity – What is the win/win relationship?
Connectedness – Systems are about the connections and flow of energy. Each element should have a purpose and their connections define the dynamics of a system
Responsiveness – How do you create constant adaption through feedback loops?
Resilience – Systems die if they are not built for resilience. It is about adapting to unforeseen things.
Nature has its own language based on evolution, which is a non-verbal system. When you transfer it to humans and how humans use systems, how do these five attributes become manifested and what are the protocols? Systems are not based on the individual; they’re about the flow of many individual relationships. Systems operate with their own dynamics. In Sufism, there is a saying, You think if you understand one, you understand two. But first, you must understand ‘and’. It’s the spaces between the elements which create the system. When you get three people together, dynamics start and no one individual controls the interplay.
How has your brand strategy experience informed your migration to systems thinking?
What fascinates me about brand systems is that they are really value systems rooted in culture. They are about ideas and relationships, not about objects and stuff. Most of the models used today are based on a historical, packaged goods view – a mechanistic formula of how to create brands. Marketers used to operate as if you can manipulate certain elements and humans will act like predictable automatons. In reality, humans and brands don’t work that way. For example, unseen cultural values and attributes really affect how a brand is created, delivered, experienced and shared.
Therefore, one needs to understand the properties of the whole, not just the pieces. If you look at Blackberry versus the iPhone, the value of the phone is not just the beauty of the industrial design and the engineering. It’s the system of applications that the phone enables that really creates value. Apple made things much easier for developers to create for the iOS platform. Blackberry did not for their platform. Within the first year, there were 200 times more apps for the iPhone vs. the Blackberry. Traditional marketers often overlook interdependencies that impact the value to their customers the most. It’s not just about what you control directly but what you can influence and who you’re connected to. That’s the network effect.
Who creates value? If you don’t manage those broader relationships, you degrade the value you’re creating. Know your interdependencies and your vulnerabilities. For example, if you are a toy manufacturer and you outsource manufacturing to China, parents will still hold you responsible if the paint they use has lead in it.
How does systems thinking manage complexity, ambiguity and how does it address variables in the system?
There is a big difference between complicated and complex or simplistic and simple. Someone said, Taking apart a car motor is complicated. Raising a child is complex. There are lots of things that are complicated, but you can deconstruct them. Things are now contextual and we need to have different filters to understand where we are in any given scenario. Something that is complex has multiple layers and facets. The way to navigate the complex is to navigate without a formula, but use certain principles to make decisions that help us thrive. Any one organization is playing multiple roles, sometimes in multiple markets.
Systems thinking helps understand what needs to be managed, what is negotiable and what needs to be highly adaptable. Ambiguity is a reality that is rarely accounted for because we assume we know everything we need to know and that everything will go according to our plans. That’s almost never the case. The hardest thing for most organizations to come to terms with is that they actually control very little. Power in networked systems comes from relationships, influence and knowledge of the environment. That’s why adaptability is so critical – businesses need to be able to constantly adapt to unforeseen circumstances in real-time. If not, the whole system will be vulnerable.
How does system thinking address externalities? How does one map what is core, adjacent and ancillary to the problem that is being addressed? Remember, the notion of “externalities” is a construct. Part of the problem is that businesses can have very narrow definitions of valuable relationships and interdependencies. We worked with a pharmaceutical company that was challenged by a lack of qualified workers in their region. They rightly identified it as a vulnerability. However, we asked, “What relationship do you with local community colleges?” they struggled to understand why that was relevant. They defined our question as an externality that had nothing to do with their business instead of a vital relationship to nurture.
Natural systems always have a purpose. What are we here for? What is our core purpose? People put mission statements together and forget about them. The whole role of management is to continually understand and reinforce a sense of shared purpose – internally with staff and externally with key stakeholders, collaborators and customers. I interviewed the CEO for Tim Horton’s, Canada’s fast food innovator, and he noted they don’t bother with five-year plans. The way he described how Tim Horton’s stays in touch with itself and markets they serve is to ride the fences – his term for constantly monitoring their markets and creating feedback loops.
Reinforcing an organization’s purpose and who you are creating value for means continually monitoring what value you are creating and for whom. The five attributes mentioned earlier help an organization keep connected and resilient. How do you address connection and causality within systems thinking and not make false connections? The basic thesis is interdependency. Michael Porter in a Harvard Business Review article, What does business need to pay attention to? said, Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy or even sustainability, but a new way to achieve economic success. It is not at the margin of what companies do, but at the center.
Place matters. If your headquarters are in a location that’s economically challenged, you will be impacted by it whether you recognize it or not. You have a responsibility to your place because the location feeds you and affects everything you do. Porter would define this not as social responsibility, but how to make a business thrive in a community. Businesses up to now have been thinking about supply and value chains in a narrow way. We need to widen this filter and rethink our value creation – what does it mean and who provides it.
How do you migrate existing behaviors to new behaviors that can deploy and maintain a new system based on your thesis?
We live and breathe systems every day – our families and communities are all about networks and relationships. These are are not new behaviors. Businesses need to recognize that. For example, companies are struggling to understand social media. These social behaviors have existed forever but they’re now technologically enabled. Social media behaviors are not new behaviors or even artificial, but are new to marketing. Modern marketing is a recent blip in human history. The one-way monologue pushing products to “consumers” never addressed community. People are not just individuals but active participants in multiple personal networks. That’s hard to ignore today. Social technologies are allowing people to connect, in real time, with diverse communities . People are asking their friends what they think about a product and service. Marketers can be part of the conversation but they can’t own it.
Human beings constantly subvert systems. How can systems thinking take inconsistency and create a purposeful system?
Designers used to think of systems as fixed relationships and abstract, beautiful architectures. I used to hear, I created a beautiful system. Too bad the client screwed it up. Design now has to build in the dynamism of real systems. There is a golden age of design ahead. We can design for systems rather than static artifacts.
In identity design today, for example, we’re seeing visual systems that could never have been created before. Google changes their masthead every day. What are the fixed non-negotiable and the variables that can lead to continually engaging ideas that map back to the same system? The levels of resiliency of design systems that continually reinvent themselves and create richness that have dynamism without loosing the core identifiers of a system. In terms of designing processes, The Gap changed their identity and received a backlash from their core communities that did not engage with their values. Building a sense of engagement and of people’s needs through social media is making a much larger tool box for designers to determine how dynamic a design system needs to be useful to people.
There is the core DNA of an organization that is non-negotiable. As an organization grows and evolves, it has to respond to factors that it interacts with in its environment. There is a constant flow and we need to create human systems that have a clear purpose and respond and adapt moment-by-moment. We need to take natural human behavior and infuse it with businesses and organizational systems.
It is easier to accomplish now because we have more real-time moment-by-moment big data and inexpensive technology to sift through the information flows. We have smart devices that are adaptable to their environment. They constantly monitor the environment based on core principles.
What are the top things that are getting in the way for organizations to get in tune with their environment?
You need to move from the parts to the whole. In organizations, purposefulness is given a lot of lip service. Organizations need to recognize behaviors that are the coherent norm in their culture. They may need to change the norms through clear values, and this is what is so hard to do. I interviewed many CEOs in Canada, and they continually discussed culture and values over and over as the secret sauce to get the culture right and have people support the culture. Walking the talk within an organization is critical.
When the Four Seasons take over management of a hotel, the hardest thing is inheriting staff. Once they signed a deal at midnight, and then from midnight to 6am they repainted the back of the house where staff are, and the management served coffee to the staff the next morning to welcome them to the Four Seasons. Their perspective is that they could not change the customer attitude until they began to change the staff attitude. There are different expectations and behavioral norms that staff need to be attuned to define a new culture.
With digital technology and the massive amounts of data – now called big data – what Sandy Pentland from MIT called “. . . increasingly about finding connections, connections with the people around you, and connections between people’s behavior and outcomes.” What can big data bring to systems thinking?
Data is only useful based on the filters you put upon it. What does data tell us about the health of relationships? What feedback loops do they reinforce that can make us thrive? There is so much data, people do not know what to look at in order to understand the health of a system and what are the vulnerabilities.
The simple things need to be paid attention to and not the tsunami of data that you are presented with. What is the mood of the organization? If you are losing the internal audiences based on the espoused values, why are you losing them? Which communities are most important to your organization?
Simple imperatives in a few critical areas that are not simplistic and having the data to support them are important. All systems are not alike. What is the structure of the system that you are in? Are you a centralized, hub and spoke or federated system? The same principles apply, but may be expressed differently based on the answers to these questions. What are the levers one has at your disposal based on these relationships will then become clear.
What is the role of authenticity in systems?
Authenticity is operating at a different level. The oxygen for all systems is trust and authenticity is a form of trust. The value one delivers is based on the trust one person or organization has with another. The result is a genuine transaction.
In a world that is productized, how can systems thinking ride the fence so it does not get reduced as too abstract metacognitive activity for practical applications?
Systems thinking does have practical applications. Working with purpose is critical so that everyone is pulling in the same direction in a coherent way. If you are working with purpose, people care about what matters which builds coherence. I do not mean to say that this pulling has to be necessarily in lock step, but it should be coherent. As long as the picture makes sense, there can be many forms of diversity, which builds resilience in the system.
Then there needs to be a set of shared values based on purpose of who is benefitting from a product and service. A system then is designed taking into account diversity: embracing what is non-negotiable and what is highly adaptable. Flex in any system is critical for being single purposed vs. single minded. There should also be strong feedback loops to highlight if everyone is staying on track or modifying what is modifiable mapped back to the central purpose. The goal is for a system to be useful to people and be an enabler for other people’s purposes that fuel their performance – which is what value is all about.
How will systems thinking change the way business is doing business? Systems thinking is not a new idea and smart leaders recognize non-traditional interdependencies. They take care of their communities, not because they want to necessarily be good corporate citizens but because their businesses are in a community. They take care of their people because they will go to the wall for the company, which are supported by reciprocal values.
Look at what happened to United Airlines when they broke a customer’s guitar and then refused to pay to replace it. The customer made a video and uploaded it to YouTube, which at last count had over ten million views and will live in perpetuity and is now a meme. How easy would it have been for United to pay for an $1100 guitar, rather than have to be reactive to a self-inflicted situation?
One year, Westjet, a Canadian air carrier gives an $1100 bonus to their employees. So does Air Canada. The difference? Air Canada divides the bonus over 12 months and their employees don’t really notice it, and Westjet creates a yearly celebration for its employees where each one comes on stage to receive their check and recognition from management. This perceived value of the same $1100 is different since Westjet celebrates it as an economic and emotional success, where Air Canada does not.
What is the greater good? Commerce, culture and community drive values based choices that help organizations succeed and make people feel more connected.