Applying Systems Thinking and
Common Archetypes to Organizational Issues
Module 6: Systems Archetypes
Example: "Acme Inc."
"Fixes That Backfire"
You have already seen an example of "Fixes That Backfire" in Module 1. The loops drawn here incorporate the components of language covered in Module 3.
Acme Inc.
Acme is a $200 million division of a Fortune 500 company. It sells an industrial product line to a wide range of customers. For more than a decade, Acme was a growth company with healthy profits. Delivery and billing proceeded smoothly.
Then, something happened. Sales slowed and took a downturn. Billing errors, customer complaints, and delivery problems became a continuous headache. The time to close a new account increased alarmingly, and profitability was sliding.
There was complete agreement that sales were down and that current customers were choosing other suppliers. There was also agreement that poor service was a significant contributor to lost customers. What was causing poor service? The service department didn't deny that there were problems, but they reported that they were swamped with "special orders." These included atypical billing arrangements and unusual delivery configurations. As a result, there were many fewer routine orders, increased administrative time to process and fulfill an order, and no additional service staff. This created an increasing burden on service, resulting in the documented pattern of poor service.
Where were these special orders coming from? When the sales manager was interviewed, he reported that the marketplace was vicious, and he applauded his sales force for coming up with creative ways to make the sale. He noted special pricing arrangements and expanded delivery as very attractive features to new customers. He also reported that these new features were a function of aggressively seeking new accounts to help meet Acme's sales targets.
View Possible Feedback Loop Diagram