Essential Dynamics with Derek Hudson

The higher the level at which we define the system, the more impact we can have when we optimize it. Derek and Reed go deeper to explain on this episode of Essential Dynamics. We start with policing and homelessness, and move to...accounting clerks.

Show Notes

Derek is at derekhudson.ca. 
See full show notes at the Essential Dynamics Wiki.

What is Essential Dynamics with Derek Hudson?

Join Derek Hudson as he explores Essential Dynamics, a framework for approaching the challenges facing people and organizations. Consider your Quest!

Reed:

And it's Essential Dynamics, the show you are listening to right at this moment with Reed McColm I'm hosting, aren't you fortunate? And I'm here with my good friend and mentor, mister Derek Hudson. Derek, are you there?

Derek:

I'm here. I'm excited. This is a awesome opportunity to to get back together again, Reid.

Reed:

Good. Good. It's nice to see you too. I am excited about this particular episode because it's going to be a little more challenging than getting system definition at the right level is what I think we're going to call it. Tell me what you mean when you say getting system different definition at the right level.

Derek:

So to put this in the context of essential dynamics, as I like to do, we're on a quest, and the quest, is to accomplish some great purpose. Mhmm. We're with, with our people and we're on a journey. And the journey, the path that we take to accomplish the purpose, I like to think of as the system. And so in an org if an in an organization, if our if our well, actually, let's let's pick one right now.

Derek:

Each of us, you and I and and Brynn, who's on the soundboard, we were talking before we, got on the air about getting our vaccines.

Reed:

Yes.

Derek:

We we all got COVID vaccines in the past week or so. And, so you think about the system that goes into creating a COVID vaccine. There's a research department and, and they figure out how to formulate this vaccine and then they've gotta manufacture it, then they've got to distribute it, and then that leaves the company and gets into the hands of, in our case, the healthcare service. And then we go into a website and book book an appointment. We go to appointment and we get a shot.

Derek:

And so that's all the path because in this case, the quest was to eliminate COVID, the risk of COVID in the whole world, and part of the path there is to vaccinate people. Mhmm. So one of the things that I've learned about systems, and we've talked about a little bit before, is there is always a limiting factor to how the system can perform. And there's generally only one unless it moves around a lot. Okay.

Derek:

And if you improve things outside the constraint or the limiting factor, it doesn't actually make the system perform better. But because systems are so complex, in organizations what we tend to do is we take tend to break them into parts. And we say, you're responsible for research and development. You're responsible for production. You're responsible for sales and marketing and you've got distribution.

Derek:

And and we break those parts up into smaller parts. And then we say, hey, let's make this work better. And so everyone takes their own little area, tunes up their little area, and makes it better, but the system doesn't get better. And so the the the challenge there is we're thinking of the system at the wrong level and we're optimizing a little part of it, but we're not optimizing the whole system. Ah.

Derek:

And so my personal tendency, I've just learned over the years, is I tend to tend to take a step or two back from where other people start and say, what's what's the system here? And other people are defining the system as I've got my desk, I got my inbox, I do my thing, I put it in the outbox, and, I'm good. And if we step back from that, you know, a few more layers, then we can, we can get more done. I have an example that's not business related that might help.

Reed:

Okay. Please.

Derek:

But let's see. So I had some experience with this in two ways because I want to talk about homelessness and social disorder. I have not been homeless. So I don't mean that kind of experience but I did have a friend that I kept in touch with for many, many years who was in and out of that situation. He had some addictions and, you know, life skill challenges and so sometimes he was homeless.

Derek:

And so I saw it up close as I tried to help him out. Then the other kind of institutional side was I sat on the police commission here in Edmonton, you know, as a community member for for a number of years. And the police service are the front line of dealing with homelessness and social disorder. And so I got lots of reports and saw lots of information. So here's the situation.

Derek:

I mean, it's happened to me. You're walking down the street, downtown and a homeless guy that looks like he's intoxicated in some way starts bothering you. Or maybe he steals something from a store. So, you know, there's, there's an incident that happens. Yes.

Derek:

So one level is get this guy off the street. Call 911. The police van shows up, and they arrest him. He's in public intoxication, panhandling, petty theft, whatever. They arrest him, and they haul him away.

Reed:

Problem solved it. Is the problem solved?

Derek:

Problem solved.

Reed:

The immediate problem is solved.

Derek:

Yeah. If if my question is how do I keep the homeless people off the street in front of my store

Reed:

That's one

Derek:

way. That's one way. Okay. So level two is the reason that person is intoxicated and bothering people is because they have some unmet health and mental health and financial needs. So the current thinking, which I support, is if we can get permanent supportive housing and that person has a place to go to chill out, to see a nurse, to take their meds, then they can come from a different place when they're walking down the street.

Reed:

Yeah.

Derek:

So that's kind of level level two in my thinking. And actually talking about my friend, that's when he did his best was when he got permanent supportive housing where he had, like, medical attention daily. He wasn't in a hospital or institution. Was in a home, a group home. But that's where he got to his best place was when he had that.

Derek:

So I I'm not saying that's not a good thing. But level three is that you send the Terminator back in time to when he was young.

Reed:

Mhmm. And you help happening at all.

Derek:

You help his parents stay together, his dad to keep his job or to get off alcohol so that he can stay in school, doesn't start taking drugs, gets an education, gets job, takes care of himself and his productive members of society. That's a super long term game when we got a a person causing problems on on the street downtown right now. Right. Right. But if you think of the system bigger and you want to eliminate homelessness, you can't even I mean, you have to go beyond the homeless people are homeless now and to try and help the parents of the people who will be homeless in twenty five years.

Reed:

I see. So So

Derek:

that that's a that's a crazy jump from throw the guy in the slammer.

Reed:

It sure is. It sure is. And although I like your idea of depending on time travel to solve the problem, I personally have stopped believing in time travel, and I did. I stopped believing in time travel on the day of Donald Trump's inauguration as president because no one from the future came back to stop it.

Derek:

Absolutely. Case dismissed. Right.

Reed:

Yeah. So I would like to work in a more practical argument. How does the viewpoint, the perspective of essential dynamics help the homeless situation?

Derek:

So here's the I mean, not easy. It's not easy, but let's let's look at it as, like, sort of who's responsible. So level one is the police service. Right? Everyone says, you know, we want the police service to clean up this town and so we're gonna call and you're gonna clean it up.

Derek:

And if and if you call the police service, that's, you know, that's really all they can do. Mhmm. Mhmm. You know? They don't run They

Reed:

are geared the police service is geared towards a temporary solution.

Derek:

They are the yeah. They're like the first responders to the emergent situation, and they don't have that many tools. Right. Right. Really, if you think about it, they can talk people down or they can haul them off or they can write them a ticket.

Derek:

I guess that's the one in between. Like, they don't have that many tools. So so level and the and the problem with level one is that it's not just a police problem. That the police might have to take the person to the hospital and because they might be having a chemical or mental health episode. So they take them to the hospital and now they cost the hospital money.

Derek:

And there might be property damage and so that costs insurance money and there's like there's other parties involved. So you step back from that and you say, and I've seen statistics on this, the cost of an unhoused person with addictions through the system is far far more in a year than putting them downtown at the hotel Fairmont McDonald.

Reed:

Really?

Derek:

Right. With room service. Right? So so because the system's not geared like, you don't have you don't have to pay the bill Right. Then then the different groups have to pay their their cost because there's, you know, a person in need.

Derek:

And then and they just keep paying. And what it adds up to is if you if you could keep them at a hotel downtown, then you would spend

Reed:

less you

Derek:

would spend less money. Right? So so the if you can then say, well, the system is the mental health system, the, you know, the physical health system.

Reed:

I don't want to suggest that all homeless people are mentally ill.

Derek:

No. No. But it you know, and it's a it's a cycle. Right?

Reed:

Right. Right.

Derek:

Right. Like, if I was homeless, I don't know how long I could maintain my good mental health.

Reed:

Right.

Derek:

Or if your mental health, you know, flips a switch and you make a few bad choices, you know, in in the case of my friend, I met him when he lived not far away in an apartment building. Within a few months after meeting him, he had a big alcoholic binge and drank his rent money and lost his place. So I don't I don't wanna be judgmental about any one particular situation but it's it compounds big time. Right?

Reed:

Of course.

Derek:

And so there's all these different agencies involved and so, you know, this this idea of permanent supportive housing and wraparound services is the other thing I talk about. It's to say to all those agencies, well, let's put our money altogether and then we'll take a person and we'll help them with their challenges. And even though that seems like a lot of money, it's less money than if they're in emergency multiple times a week and in the criminal justice system and all that. The problem is is that we've taken the big system and we've broken it down to these parts and then we try and run the parts individually. So then you step

Reed:

Is it harder to move the system because now it's all all parts?

Derek:

Well well, sure. And and then you fund them in different ways. You fund them separately and so they have their own. So so this is a society problem but I've seen this in way smaller situations even just in organizations, which I wanna talk about in a second. But let's let's just finish off this one.

Derek:

So the biggest system is its society. And society wants everyone to get a good chance to be able to take care of their own needs and fulfill their dreams. So then we're talking about, you know, in my mind, we're talking about strong families. And, you know, to the point where we if if we expect the government to make sure we have strong families, you know, I I think I think we've missed, like, we've missed out. It's not that's not gonna work.

Derek:

There are things that governments can do, but these society problems are ones that we can all contribute to in many ways by having strong families, strong education systems. You know, I've certainly seen families, strong families with, you know, really strong kids coming up, bring other kids into that environment. And you see it on sports teams and scouts and church groups and stuff like that. So the kid with the single parent somehow ends up on the ski trip with, you know, the rest of the kids or plays on the same sports teams and, you know, and has those advantages. You have things like public libraries and, you know, I mean, there's there's a lot to it.

Derek:

But that's the system. That's the system that needs to be optimized. And, you know, we put all this on the police. They can't

Reed:

they can't optimize. Yeah. It's too much of a burden for them. Yeah. I agree.

Derek:

They can't. They're at the wrong end of it. So I'm gonna give you another example, which is really mundane but it it goes back to I guess it's the last episode that we had when we were talking with Anne and chief financial officer stuff. So the accounting clerk, who's responsible for paying the bills, they start to pile up. So they stay late.

Derek:

They stay late and they process all the invoices so all the suppliers can get paid. And whenever they pile up, they stay late. So it's like level one. Level two is you start to look at the system and say, why did these things pile up and why are they always, you know, late? And then you find out that there's paper all over the organization and, you know, an invoice comes to someone in the middle the organization and and they hang on to it for two months and then remember and, you know, send it in and stuff.

Derek:

And so you clean that system up. Mhmm. And so now the the payables clerk has this, you know, two screens with all the information. They check, click, click, the thing goes in for payment. So that's kinda level two.

Derek:

So it's not just the clerk working through their inbox. Now it's the organization, streamlining things and making sure the information's in the right place and and they move forward. The third level is now you think outside the company. So the third level is you, connect with your suppliers. So the auto industry has done this, over the years.

Derek:

So when it's fully integrated, when I'm working on, let's say, building a car and I need a a brake assembly

Reed:

Okay.

Derek:

When I pick one off the shelf and put it in the car, that transfer sends a signal to the brake supplier and they put another set of brakes on the shelf. And when they do that, barcode, barcode, scan, scan, whatever it is, then the notice goes to the company. We just gave you another set of brakes and the company pays. No fingers involved. No people at all.

Derek:

They just set the system up, pull the brakes off, we pay for the brakes. Pull the brakes off, we pay for the brakes. Have a little bit of slowdown. Don't pull the brakes off. We don't pay for brakes.

Derek:

So that's not exciting to anyone but CFOs, and and I'm really excited about it.

Reed:

But No. No. I I found myself thrilling just a little bit.

Derek:

Yeah. Just you know, I mean, you know, it's a it's a feeling that we it's hard to describe, Reed, but it's, you know, it's there.

Reed:

Okay. I I appreciate that.

Derek:

For a few select people. So, you know, if you think about these three levels then, there's the level of what's happening in front of one person right now. Yeah. Second level is kinda like what's happening within the organization. And then the third is let's take it outside the organization.

Derek:

So those two examples are two where, depending on where you're thinking about the system, you can either have a little effect to kind of save it for the day or if you get way back, you can have like a a fundamental effect and a change. You know, know an earlier episode, we talked about let's get purpose x and purpose y in the same room.

Reed:

Right. Yes. I remember.

Derek:

Even even if we only have one purpose, let's get the suppliers and the consumers and the produce like, let's get them all in the same room and, and streamline streamline these systems. And to the extent that we're thinking more narrowly than that, we'll we'll not have as big an impact. I've certainly seen it in a company with multiple divisions that everyone thinks they're doing a great job. Mhmm. All of the problems in the organization that really mean something are the way that divisions interact with each other.

Derek:

Oh. And you'll and you'll never get there if every vice president says, well, it's not me. We're good.

Reed:

It seems like don't know. Maybe I'm feeling maybe it's improper of me, but I think as company gets bigger and there are more parts, I get more scared that they're all running. I don't know. Should I fear bigger companies because they have so many parts?

Derek:

Well well, you know, a lot of it is, you know, as a as a shareholder, as an investor, you know, they're probably not doing it the easy way.

Reed:

Right.

Derek:

As a customer, sometimes you run into that, and other times as a customer, you're fine, but the company is spending way more time and money giving you the product than, than they really need to if they were able to work together and and, you know, think of the system at the right level. So I my natural tendency is always to take one step back and say, I seeing the whole thing? And maybe take another step back. Am I seeing the whole thing? And then that's where we start to work.

Derek:

Sometimes you can zoom in and other times you gotta stay back. So that's my those are my thoughts on getting the definition of the system at the right level.

Reed:

Well, I find it fascinating. And I'm sure we'll talk about it again. Until we do, studio engineer is Bryn Griffiths. Derek, how do people get in touch with you?

Derek:

They can find me online at derekhudson.ca and the right way to spell Derek is d e r e k.

Reed:

That's great. Thank you Derek. I'm Reed McCollum, your host and as always the j is silent. And until next time, consider your quest.