No, performance isn't defined 94% by the system.

There's a persistent myth proliferating in the Agile space: allegedly, "94% of an organization's performance is attributed to the system, while only a mere 6% depends on the individuals." This widely circulated belief shapes perceptions about the dynamics of productivity, teamwork, and leadership in countless organizations - but: it's false. And here's why.

The 94% myth

Could it really be the case that we can hire individuals without ambition, experience, or talent and expect nearly identical results as we would from a team of motivated, skilled, and dedicated professionals? Does the concept of "systems over individuals" hold up in the real world of work, where unique skills, passions, and contributions of individuals often drive innovation and excellence?

The reality is more nuanced than the oversimplified notion of 94% versus 6% in performance. To understand what's going on, we must first trace back to the origins of this myth in the writings of W. Edwards Deming, the renowned statistician and quality management guru, and dig out the roots of this quote. In doing so, we'll discover that he wasn't making a case that individual performance is almost irrelevant - to the contrary!

What's the "System?"

Let's start by defining what "the system" actually is - let's take a look at what the systems thinker Russell Ackoff repeated on multiple occasions:

A system is never the sum of its parts; it’s the product of their interaction.

Russell Ackoff

Before we explore deeper, let's sprinkle in a quote from Dan Pink on organisational systems:

• Autonomy: the urge to direct our own lives.
• Mastery: the desire to get better and better at something that matters.
• Purpose: the yearning to do what we do in the service of something larger than ourselves.

These are the building blocks of an entirely new operating system for our businesses.

Dan Pink, "Drive"

While we can formidably argue whether Pink's statement is an assertion, anecdotal evidence or fact - what matters it that Dan Pink sees within the individual the building blocks for a better organisational system.

Out of the Crisis

Let's now explore what Deming actually wrote:

I should estimate that in my experience most troubles and most possibilities for improvement add up to the proportions something like this:

• 94% belongs to the system (responsibility of management)
• 6% special

W. Edwards Deming, "Out of the Crisis" (p. 315)

As you can see: what he mentioned isn't that performance is (almost) exclusively attributed to the system, but that most of the problems are systemic and require active management attention.

Untangling system and individuals

Let's use these definitions to untangle what "the system" is, versus what "individuals" are in our context:

The System

As Russell Ackoff aptly stated, a system is not simply the sum of its individual components; rather, it emerges as the product of their intricate interactions. In the context of organizational performance and management, "the system" encompasses the collective structure, processes, culture, and interdependencies that define an organization. It represents the holistic framework within which individuals operate, a complex web of relationships, rules, and practices that determine the organization's overall effectiveness and outcomes.

The Individual

Drawing from Dan Pink's insights, "the individual" embodies the human element within the organizational context. It's the unique person, with their aspirations, skills, motivations, and contributions. Within the organization, "the individual" serves as the driving force behind the building blocks of autonomy, mastery, and purpose. Autonomy represents the urge to self-direct, mastery is the pursuit of continuous improvement in meaningful skills, and purpose signifies the desire to contribute to something greater than oneself. These qualities collectively define the individual's role in shaping and enriching the organizational system.

The misconception

If '94% of the performance can be attributed to the system, and only 6% to the individual' -- then we could hire people without ambition, experience, or talent and get almost identical results as we would get from hiring people who care for what they do, know what they do, and are excellent at what they do. However, that's a massive misconception which is only possible due to a conflation of terminology which tries to separate "the system" from "the people making up the system" (which doesn't work!) - The people making up the system are the basis of the system! And a system comprised of autonomous, highly qualified, purpose-driven individuals has a different basis than a system where these are missing!

The System's Role

According to Russell Ackoff's definition, "the system" encompasses the intricate web of interactions and interdependencies within an organization. It includes organizational structure, processes, culture, and more. If we were to take the 94% attributed to the system at face value, it might suggest that the organization's performance is almost entirely determined by these systemic factors. This perspective can lead to the misconception that individuals are replaceable, and hiring decisions are inconsequential.

The Individual's Role

On the other hand, Dan Pink's insights highlight the critical importance of individual motivation, skills, and purpose in driving performance. If we consider individuals as mere cogs in the system, the statement implies that their personal qualities and contributions are almost irrelevant. However, if that were the case, that contradicts the notion that individuals require autonomy, mastery, and purpose within the organizational system!

Shaping effective systems

Great systems of work are shaped by motivated, gifted individuals who interact and collaborate to maximize the entire system's performance. They uplift one another, and won't tolerate being dragged down by someone who neither can, nor wants to contribute.

A high performing system of work is synthesized by optimizing the interactions of the individuals therein, while carefully paying attention that individuals wo have no place within that system don't get to negatively impact the Drive of those within.

Imperfection

Everyone can have a bad day. Even a bad week or month. And we all have our strengths and weaknesses. And nobody's omniscient. That's not what we're talking about.

But when you go out claiming that it doesn't matter whether people are qualified or motivated - you're sending an utterly destructive signal: It means that you don't respect those who put in the hard work, the learning, and the passion.

So: just don't.

You can only build great systems from people who pursue autonomy, mastery and purpose.
And you can't let people who have neither interfere with them.

Disagree?

Maybe you will disagree.

But unless you'd be fine getting major surgery from a belligerent teenager who doesn't even want to learn how to make a proper incision - I hope you're not seriously going to claim that most of the performance is in the hospital, and the surgeon themselves is neglegible to your health.