What can your organisation learn from the RBS crisis?
I am currently editing our Introductory Guide to Systems Thinking, written by my colleague David Kerr, which will be available in the near future in both audiobook and eBook formats. Some of the excellent material David has put in this guide has clearly set filters for me that have influenced what I notice in reading the morning papers. Let me tell you more…
One of the fundamental principles of systems thinking is that a very small change in a system can have disproportionately large effects – and vice versa. This concept has been popularised in the notion of The Butterfly Effect.
Yesterday’s Daily Mirror had an article entitled Little Mistakes, Large Problems. This article looks at how, in highly complex systems, small changes or variations have had enormous and often catastrophic consequences.
The article starts with the recent disastrous RBS computer system problems that have been a great embarrassment to the bank. This £1.7 billion crisis is believed to have been caused by a junior technician accidentally hitting the ‘Delete’ key during a routine upgrade. The effects of such a small action were amplified by the enormous complexity of the IT system to create the catastrophic problems we witnessed.
Many of us will also remember, for example, the excitement of the launch of the £1.3 billion Hubble Space Telescope, which promised to reveal many of the mysteries of deep space. The presence of a microscopic flake of paint in the manufacturing process of the mirror, however, caused an error in the final product of a mere 4 microns – 25 times smaller than a human hair. Magnified by the vast distances of space across which the telescope was gazing, such a minute error had devastating consequences for the quality of the images gathered and required a mission to correct it that cost an estimated £300 million.
Similar tiny failures have been amplified to enormous effect in other situations as well, as the Mirror article reports. In 1977 the failure of a single nut in a circuit breaker in the New York City electricity system led to a 24-hour blackout that generated rioting and looting costing the city £650 million and leading to 3.776 arrests.
The news is not all bad though – not a bit of it. Just as systems can amplify tiny changes into major crises, so they can generate profoundly positive change when skilled systems thinkers recommend even small interventions at the right point in the system. This, as David points out, is one of the enormous advantages of systems thinking. It is also, I would suggest, a very good reason to consider whether our world-class consulting services (deeply informed by systems thinking approaches) might offer your organisation the much-needed solutions to any problems you may have been experiencing.