Stage Two. Diagnosing Problems
The task of this stage is to diagnose and determine what type the problem belongs to. Sometimes the solution to a problem lies on the surface. But often the diagnosis of the problem is not easy. An error in the diagnosis will lead to incorrect actions and will only cause harm. Although with our efforts to implement an improving intervention, the damage will be reduced.
Which problem-solving approaches to apply to solve a problem depends on whether we choose the impact on the most dissatisfied subject or intervention in reality, with which he is dissatisfied (there are cases where it is advisable to combine both effects). The goal of this stage is to diagnose and determine what type the problem belongs to.
Sometimes the solution to this problem lies on the surface (as in the case of a violently insane person who needs to be treated; or with an accident that needs to be eliminated; or with a conflict personality in the team). However, often the diagnosis of the problem is not easy. An error in the diagnosis will lead to incorrect actions and will only cause harm. Although with our efforts to implement an improving intervention, the damage will be reduced.
Diagnosis is a complex matter. Since it is difficult to give some general theoretical recommendations for implementing this stage, diagnosis is more art than science, intuition, experience, and luck play an important role in it. Yet, there are clues to how to do it.
For example, the English philosopher J. Mill advises: “Look for something that is common to every failure and that never appears in the case of success”. In some cases, this advice may help.
Questions and Tasks
1. Try to formulate considerations that would help you choose between whether to influence the subject or to intervene in the problem situation itself.
Stage Three. Making a List of Stakeholders
Our ultimate goal is to have an improving intervention. To subsequently take into account the interests of all participants in the problem situation (namely, the concept of improving intervention is based on this), it is necessary first to find out who is involved in the problem situation and to make a list of them. Due to the universal interconnection of everything in the world, we limit ourselves with only essential and most significant participants of the problem situation, called further stakeholders.
Our ultimate goal is to have an improving intervention. Although each stage should bring us one step closer to it, it is necessary to take special care that this step was exactly in the right direction and not in the opposite direction.
To subsequently take into account the interests of all participants in the problem situation (namely, the concept of improving intervention is based on this), it is necessary to first find out who is involved in the problem situation and make a list of them. It is important not to miss anyone: it is impossible to take into account the interests of someone who is unknown to us, and to disregard the opinion of someone threatens that our intervention will not improve. Thus, the list of participants in the problem situation should be complete.
Unfortunately, the task is impossible. Because of the openness of all systems, everything in the world is interconnected (a consequence of the second property of the system), and, therefore, the entire universe participates in the problem situation in one way or another (Figure 5.3), and rewrites an infinite number of its parts, which is an unthinkable thing. The way out is to describe the infinite variety of the universe in a simplified way — of course, through a classification model.
Indeed, although everything in the world is connected with our problem situation, it is connected to a different extent: some are close to it, others are far away;
FIGURE 5.3 The whole world participates in any situation (but in various grades).
some are closely, strongly, and directly connected with it, while others are weakly or indirectly connected. Direct participants because of their indirect connections have information about the latter and somehow represent them in the situation. This allows the whole universe to be divided into two classes: the first class will only include the direct participants in the situation, while the second part will include all the others (Figure 5.4), confining ourselves to take into account only those who got into the first class. Therefore, in a certain limited neighborhood of the problem situation, there are now a finite number of elements, and their census becomes a real thing. However, the requirement of completeness of the list (“universal census”) remains and even becomes tougher.
According to the classification canons described in Chapter 3 (Part I), each class must be given a name that all its members will carry. This can be done in any language. In English, it was done by analogy of Figure 5.4 with the situation at the racetrack: on a rectangular field, a horse race is going on, and coming at them the
spectators place their bets on their favorite horses. The situation is one, the interests are different — a complete analogy with any other problematic situation. Players to tote are referred to as stakeholders. It was suggested that the same term should be used to refer to all “direct” participants in any problem situation. The term caught on, adding to the professional language of systems analysts.
Difficulties in Compiling a List of Stakeholders
So, we have the task of compiling a complete list of stakeholders of our problematic situation. In principle, the task is feasible and the number of stakeholders is finite. But, in practice, this task is difficult.
The main difficulty is associated with the evaluation (and, consequently, with subjectivity) of the characteristics of belonging to the class of stakeholders. Who else is considered “close”, “directly related”, and who is no longer? The boundary between direct and indirect participation should be drawn, but it is relative.
For example, the family of the loser in the sweepstakes a large sum—direct or indirect participant? Or a more important example, a list of stakeholders for an investigator of a crime. It turns out that except criminals and direct witnesses to the crime, to improve the reliability of the information in this list it is necessary to enable indirect witnesses: the latter did not know about the crime, but knew a lot about its participants and direct witnesses.
Similar problems arise in the economic analysis of the company’s position in the market (which of the vast environment to make stakeholders?); or when designing a technical device (who will somehow deal with it — in its production, operation, trade, service, disposal, etc.?).
The guiding principle of stakeholder selection is that this class is the field from which information about the entire situation will be gathered. This information is needed to build an adequate model. So, the stakeholders include all those who have the necessary information.
However, the actual involvement of the subject in the problem situation is not a guarantee of the necessary information. Participants in a situation may identify problems associated with it, but designing appropriate sections of the improving intervention may require more in-depth, specialized knowledge of the specific issue. In such cases, you will have to resort to the services of experts and specialists in such matters. What kind of experts will be required will be revealed only at the fifth stage described below. However, the participation of incompetent, but direct stakeholders will be necessary for evaluating and criticizing the descriptions and projects proposed by experts, as only the stakeholder can determine whether these descriptions and projects meet his interests.
A very reasonable advice is to include an external observer in the team for the evaluation of the organization, who can perfectly listen to others and observe himself, along with an internal observer with tangible experience in the system. At the same time, it is recommended to take internal representatives from among employees with two or three years of experience in the company, so that they already see its shortcomings, but are not used to them.
Tips to Facilitate the Work
The experience gained during this stage can be arranged in the form of hints, heuristics, useful tips, which can increase the completeness of the list of stakeholders. Here are some of these tips found in different sources.
1. List of stakeholders is a black box model for the problem situation. We are waiting for the errors of the first, second, and third types, discussed in Chapter 2 (Part I) and we need to take any available measures to prevent them. But this is not an easy task.
For example, in the 1970s, when problems were discovered in USSR’s national economy, the output was seen in the improvement of management, in particular, in the program-target management. To this end, all agencies built “target trees”, on the basis of which short-, medium-, and long-term plans were developed. For example, a group of economists from Moscow did this work for the Ministry of the Navy of the USSR. They took the black box model of the Ministry as a basis. The scheme is simple: it is necessary to consider below, above, and standing next to the system. The higher systems were obvious: the Central Committee of the CPSU and the Council of Ministers; it was decided to take the coastal fleet and the longdistance fleet as the lower ones; the fleets of socialist and capitalist states were called standing systems. According to the existing methods a target development program of the merchant marine was compiled. In 1984, the media began to report the collapse of the system. The result did not match the expectations — a sure sign of the inadequacy of the model. On closer examination, errors of the second kind are detected: for example, railway and river transport were not included in the number of stakeholders. But the main mistake was not taking into account the interests of the system itself, as a result of which there was an acute shortage of housing, children’s, medical, and cultural institutions in the infrastructure, which led to the withdrawal of qualified personnel, even ship captains. These are the consequences of ideology, which believed that their own, and even more personal interests are insignificant, something like the “remnants of capitalism”.
Hence, “black box” advises whose needs to be done, and how it will be done depending on the analyst (facilitator).
- 2. “Silent stakeholders.” Often, the number of stakeholders should include not only subjects (individuals, groups, organizations) but also other participants in the situation. At the end of the 1980s, at the International Institute of Applied Systems Analysis (Vienna, Austria) under the leadership of R. Akoff a “round table” on the theme “Art and science of system practice” was held. One of the many results of this conference was a remarkable recommendation to increase the completeness of the list of stakeholders through the mandatory inclusion of three “silent” stakeholders:
- 1. future generations (they do not exist yet, but their interests must be taken into account, so as not to create problems for them by our intervention in today’s reality, as did previous generations to us — debts, exhaustion of renewable resources, the problem of nuclear and industrial waste, acid rain, etc.);
- 2. past generations (they no longer exist, but their interests are represented by the culture they left to us. Intervention cannot be recognized as improving if it causes at least some damage to material or spiritual culture);
- 3. environment (intervention cannot be considered as improving if it harms our environment, both living and inanimate).
How exactly the interests of silent stakeholders will be taken into account in your intervention depends on the nature of the problem and how deeply the developers are imbued with the ideology of improving intervention.
3. A list of obligatory participants.
a. In every situation, there are those who get something in it, buy and use something. Our intervention can change their position and opportunities, and we promise to implement an improved intervention that does not infringe upon their interests.
b. In each situation, there are those who work by performing some actions. Our intervention should not harm them. We need to add the actors to the list of stakeholders.
c. In any situation, some organizations, enterprises, and institutions are involved. Changes will be made according to the interests of some of them (“problem-containing” ones), carried out at the expense of the resources of others (“problem-solving” ones), and somehow affect the others. There is no doubt that if a leader from any organization does not like our intervention, he will use his influence, connections, and resources to prevent this. Our task is to make each of them an ally or sympathizer, at the very least a neutral observer, but no one an opponent. Otherwise, the intervention will not be improving.
d. Any situation involves material resources: land, water, buildings, structures, mineral reserves, etc. And they all belong to someone: the state, groups of people, and individuals. Intervention in a situation will inevitably affect their interests, and we intend to harm no one. Therefore, the owners must be listed.
4. Tip of the European Commission. Another hint was proposed by the European Commission in line with the recommendations for those planning to receive a TEMPUS/TACIS grant for a project. Here is the relevant section of it:
“The following questions can help you determine who are stakeholders:
- - What do you (who make up the plan) need to know? Whose opinion and experience would be helpful?
- - Who will make decisions on the project?
- - Who is supposed to be the executor of these decisions?
- - Whose active support is essential for the success of the project?
- - Who has the right to be a participant in the project?
- - Who can see a project as a threat?”
To answer these questions in relation to your situation, you need to include the following as stakeholders: (1) the participants of the situation you need as experts, (2) representatives of problem-solving systems, (3) representatives of problem- containing systems, (4) those desirable to have an assistant or ally in the project, (5) subjects legally related to the situation, and (6) those whose careless (nonimproving) intervention may have an adverse impact.
Though using any or all of the above tips will increase the completeness of your list of stakeholders, it will not be exhaustive. Perhaps, at later stages, it will be revealed that someone significant is missing from the list, and you may have to go back to this stage and add them to the list.
Questions and Tasks
- 1. Who are the stakeholders?
- 2. Does it mean that in the future we will only account for the interests of stakeholders and neglect interests of all others?
- 3. Do you remember hints helping you to make more complete list of stakeholders?