Thursday, February 01, 2018

Why did the coffee shop fail ? : Systems Thinking

Once upon a time, there was this tiny coffee shop that attracted a lot of crowds. Just like any other shops, they offered sandwiches and muffins apart from the popular coffee. The owner was becoming prosperous day by day. 
One day, a bit of greed kicked in and while looking at his profit/loss statements, realised that he is not making much profit from sandwiches but a lot from the coffee. So, he decided to focus only on coffee and stopped selling sandwiches.
Astonishingly, over a period of next couple of weeks, crowd not only reduced but many stopped as well. His business declined and almost reached a stage to shut down his shop.
Upon detailed analysis, he realised that people came to his shop to buy the sandwiches. However, while waiting, they used to order the coffee as well. Since the owner decided to stop sandwiches, the crowd stopped turning up. 
Even though he was not making a profit from the sandwiches, but it was generating profit elsewhere through coffee. Without really understanding the whole system, the owner looked at individual departments in his shop and started optimising them. 
By the way, the above one is a true story.
We live in a complex world, and making decisions purely based on numbers shown in the spreadsheet won't help. One needs to understand the overall system and their interactions to make effective decisions, which leads us to learn about Systems Thinking. 
In most of the organisations, leaders/teams make decisions just like the coffee shop owner. That is, they don't look at the overall system but individual subsystems and starts optimising them leading to sub-optimal results. 
Some examples include:
  • The product owner prioritising the delivery work over the technical debt. As Delivering software produces revenue faster !!  
One doesn't realise that, over a period, increase in technical debt decreases the software delivery cycle and costs more. 
  • Developer directly jumping to write code rather than following the TDD approach as TDD is time-consuming.
Developers don't realise that TDD can help in catching defects earlier and creating a better quality code. 
  • Enforcing the distributed teams to use video conferencing facility by cutting down the travel costs to save $s
Letting the people travel to other locations builds trust and relationship thus reducing communication gap. Leaders don't realise that lack of trust costs most to the company than the travel costs. 
One of the Large-Scale Scrum(LeSS) principles is Systems Thinking. It's knowledge and practice enables the organisations to make better decisions in every step.
Before I end this post, here are my upcoming Certified LeSS Practitioner trainings in Sydney and Melbourne. You can register for these courses using the links below:

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