07 December 2012

Why the New Economy is Changing Us From Specialists to Systems Thinkers

The current issue of the Atlantic has a couple of fascinating and hopeful articles about how manufacturing is coming back to the US, creating jobs to replace some of the millions lost in the last few decades of outsourcing.

In the old model, jobs could be outsourced because specialists didn't depend a great deal on one another. Like plugging in different brands of monitors and mice to a computer, marketing, engineering, and manufacturing can all be plugged into one another, little dependent on one another for their tasks. Once manufacturing was independent of design, why not outsource it to the country where labor was cheapest?

Of course it took time to get these factories up to speed, but you would likely make the same model washer machine or refrigerator for about 7 years. If it took 6 months to even a couple of years to get all the problems resolved in manufacturing, one still had years to profit from smooth, predictable operations.

The old model was driven by specialists who worked independently. Now, a new model is emerging that requires a systems perspective rather than specialists.

As it turns out, when a product evolves it requires changes on every front. Manufacturing capability could drive a new consideration in engineering and design. Design breakthroughs may drive a change in how the product gets supported in the field, after sale. Marketing insights into trends may drive changes in all of this. Systems are defined at least as much by the interaction of parts as the parts that are interacting. These interactions suggest steady communication and adaptation between the specialists whose work increasingly is defined in coordination with one another rather than in such isolation that it can easily be performed on separate continents.

The impact of this shift is that manufacturing jobs are coming back from China to the US. The reason for this is that the coordination required to design and redesign rapidly evolving products requires specialists to spend more time coordinating than working heads down on their own piece of the puzzle. Products might be updated every 2 years now instead of every 7 and assuming that specialists can work through their issues in serial is to set in place a plan that works out the kinks in design and manufacturing about the time that the product is obsolete. Specialization is less profitable.

Systems thinking is to this new, entrepreneurial economy what pragmatism was to the information economy. In place of specialists we will increasingly need systems thinkers able to coordinate, design, and create whole  products instead of just focusing on manufacturing or design issues as if they could be worked separately from each other. It is not just that our modern world will be defined by the health of systems as varied as ecosystems, financial systems, or health systems. On this score it seems obvious that systems thinking will be important. But as it turns out, even systems considerations as seemingly prosaic as product creation will be important to this new economy. It may even be this door through which systems thinking enters the popular vernacular.

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