Change and Challenge 179effects of its new market strategy on them, it might have
avoided this mistake.
cause and effect
When you stop thinking too soon, as Gucci did, you have a
misleading straight line of cause and effect. This does not
show how the effect can be the cause of another effect that
may totally change the picture. For example, downsizing by
shedding jobs is an obvious way to reduce company costs –
but only if you think in straight lines. This logic ignores pro-
ductivity, which is likely to suffer, as is morale and the quality
of the work. Systems thinking looks for loops of multiple
cause and effect, not straight lines.
To follow the possible effects of this example further still,
having fewer people may lead to new procedures being
installed to cope with the increased workload and this may
lead to customers waiting longer, or higher prices, or lower
quality still (or all three). Customers then become dissatis-
fied and vote with their feet, drifting away to competitors.
This leads to another crisis and the company may decide
that they did not downsize enough last time and repeat their
mistake, heading into a downward spiral. Lowering labour
costs is not necessarily a good strategic move. There are
other ways to compete –through service, added value and in-
novation. Downsizing would only work here if everything
else stayed exactly the same – in other words, the remaining
people did the same quality and quantity of work that was
done before.
‘Everything else being equal’ is a deadly phrase. Every-
thing else is never equal. Whenever you hear that slippery
phrase, think again. It is never true. Whatever you change in
a system, there are always side-effects. Often, those effects in-
terfere with your proposed solution. Sometimes they actually
make the problem worse or, worst of all, the ‘solution’ be-
comes a bigger problem than the original problem.