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The Tetrad - a model for Economic-Quality
Models of the real world can be useful but can never be other than an approximate substitute. They can help thinking, provide insights and even guide decision-making but they do not replace the need for wisdom - that collective, quintessential means of successfully applying accumulated knowledge to what the eminent philosopher Sir Karl Popper identified in the early 1920's as the primary task of all life: that of problem solving.
 
Imagine four coloured plastic triangles*. Three of them (red, blue and yellow) be represent the primary functions (or facets) of a traditional business. These are the financial, technical and personnel functions. These functions reflect the primacy of money (denoted red - for danger!); the assets of know-how and technique (blue - as in the engineering blueprint); and the availability of 'human resources' (yellow - as in remembrance-ribbons).
 
Our model of a traditional company will show these three coloured triangles assembled in a way that represents the entity to best advantage in the eyes of an external observer. You can construct such a model of the typical company by taking the red triangle and joining to either side of it the blue and yellow triangles. The blue and yellow triangles are then joined together themselves thus forming a pyramid, open at the base. This model represents the traditional company structure focused on making money and controlled from the top down. It appears unified but in fact, as can readily be demonstrated, it lacks the resilience and joined-up structure to handle disruption or dramatic change.
 
Imagine placing the completed company model, base-down, in the palm of your right hand (representing the marketplace) and pause to consider its outstanding and colourful presence. It is, surely, impressive. Next, gradually introduce steadily increasing external pressures on the organisation's structure (using the thumb and forefingers of your left hand - Adam Smith's invisible hand made tangible! - to bring to bear on your model company the typical demands of customers, suppliers, bankers etc.)
 
Gripping the model across its three facets you can simulate increasing market forces by increasing the pressure on the model and note how long the proud edifice survives. A spectacular and sudden collapse will be inevitable since the model's structure lacks one-ness. It is but a simple assembly of its separate, independently focused parts or divisions.
 
The model's lack of inter-dependability and its consequent inability to cope with the increasing and fast changing pressures and demands of external forces caused its failure. And the reason for this is that the three main functions of the business - finance, technology and human resources - are operating as separate, independent fiefdoms connecting only where absolutely necessary under a leadership style which presumes - even promotes - cross-functional competition rather than co-operation. The concept of one-ness is totally absent.
 
If the organisation is now exposed to a new style of leadership that understands and promotes the Deming approach to management the lack of multi-disciplinary co-operation between the major departments will be readily evident - as will be the danger of the missing connectivities between parallel functions. The identity of the three main business functions will need to change to more accurately reflect their nature. The emphasis will move from 'human resources' to ‘people' while ‘know-how' and 'can-do' will be replaced by knowledge and good practice.
 
However the most deeply rooted change will be associated with the red triangle which traditionally represents the financial function. No longer can the business be orchestrated at the highest level on the basis of money numbers alone - there is a more important level of information that must now guide top thinking. Rather, the numbers that produce the 'financials' need to be identified and managed. And these are measured in terms of ratios, counts, critical measures or other specific and absolute attributes, which vary naturally, and sometimes chaotically.
 
The red triangle thus changes from representing money to, more significantly, representing its precursor, process variation made visible in numbers. This is the essence of the change from ‘oldstyle’ to ‘newstyle’ management. While the three facets of our model - or the departmental identities they represent - have now been renamed to better reflect their corporate contribution rather than their corporate discipline so it is now necessary to introduce the missing element of one-ness, or closure, with the fourth facet. This will provide organisational coherence and robustness. It will represent the interconnected (or systemic) way in which the whole, transformed business will now operate. This new facet is represented by the green triangle – (the colour of nature whose viable systems provide our understanding of organizational structure.)
 
Now rebuild your company model but this time provide it with closure using the green triangle representing systemic thinking guiding process working. Then place it back into the model marketplace of your palm and expose it to the full range of customer pressures as before. The model will look essentially the same as before to the casual observer but it will now be much harder for market forces to destroy it. 


The new robustness based on closure results from the introduction of the systems segment of the tetradic model. The organisation now exhibits a new resilience. It is better able to ride the unexpected storms of change - all due to a systemic bonding of the organisation’s component parts. While this is easy to model it is of course much harder to implement in real life. But it is possible. And for those who realise that corporate survival is far from obligatory, it offers a powerful reminder of the benefits of transformation.
 
The Deming philosophy (as expressed in his ‘Theory of Profound Knowledge’) provides guidance to leaders to enable a company to set upon transforming itself from a fragile financially managed entity to a resilient process aligned, customer responsive, viable business system. The opportunity for gaining insight from the tetrahedron is not completed however with this simple tactile demonstration. Take a closer look at the model. Imagine yourself as a traditional finance, personnel, or technical director. Try and take a purely functional view of the business you work for.
 
With the tetradic model you cannot focus solely on your divisional interest (or facet) without being reminded of the essential connectivities with adjacent facets that have created so robust an undertaking. At each edge of 'your' facet there are the distinctive reminders of the other components of the wider organisation. Faced with the tetradic model the observer can now appreciate the multi-disciplinary viewpoint that acknowledges that there is no longer room for tunnel vision.


*  To request a Tetrad Model please contact David Howard at +44 (0)208 295 3755 or e-mail him at: david.howard@flowmap.net