"A journey in the realm of systems"

Home Page

The Way
(Site Navigation


People, Purpose, Process, & Data.

The Way of Systems

People, Purpose, Process, & Data

A Necessary Unity

Business seems to have this relentless passion for seeking one dimensional answers to complex problems. I'm not sure that it's really one dimensional answers they seek as much as simple easy answers. American business has weathered the last five decades of management fads, each fad proclaiming to be "the Answer" to all that is sought. And yet, in a few short years each fad is declared to be flawed, and replaced by the next fad, in an apparently never ending sequence. All I have to say about this is, "If one looks for the answers in the wrong place then they shouldn't be surprised if they find the wrong answers." So where is the right place to look?

What follows will provide an elaboration of the meaningfulness implied in the following diagram.

When Alice asked the King of Hearts how to play the game he said, "Begin at the beginning, go until you reach the end, and then stop." For business the beginning is Purpose. Purpose being the reason why the business exists. As I talk with senior management about purpose I get all kinds of answers such as, to make money, to deliver service, to beat the competition, to be the best, to be number one or two in our industry, etc. Each of these statements of purpose is simply a distinct statement of Theodore Levitt's definition of the Purpose of any business, "To create and keep a customer." And this Purpose is fundamentally accomplished through the delivery of customer perceived value. Whatever the business sets out to accomplish is achieved through a specific response to this Purpose.

People should employ Data to create, or define, the purpose of the business. Businesses fail because they have no Purpose, have the wrong Purpose, or are not "on Purpose." Purpose provides the lens though which all the activity of the business should be focused in order to ensure the effectiveness of action.

People should continue to employ Data to determine if the Purpose is still appropriate. People should also use the Data to ensure the business is on Purpose. On Purpose implying that the actions of the business are in fact aligned with the Purpose, i.e. effective.

As a slight aside let me offer a few words about Data. We have evolved over the years from Data Management, to Information Management, to Knowledge Management, and I'm surprised someone hasn't started to hawk Wisdom Management by now. Data is the only thing that's real, information and knowledge are just interpretations of Data. The establishment of Purpose must be based on "real" Data, not the Data we select or the assumptions, conclusions, and beliefs we form from the Data. We need to focus on the "real" Data.

People should employ Purpose to define the Process(es) which enable the business to remain "on Purpose." Process(es) here refers not simply to Process(es) such as manufacturing, distribution, etc., but to every Process which defines activity within the business. Process essentially implies the design of the organization. Businesses with an appropriate Purpose fail because they are not "on Purpose." These organizations are essentially incoherent as activity within the organization is not aligned through the lens of Purpose. For activity to be "on Purpose" it needs to be creating customer perceived value, otherwise it's just overhead.

Once the Process(es) are defined People should employ the Process(es) to define the Data necessary to support the Process(es). Data which does not support the Process(es) or enable the People to ascertain whether the Purpose continues to be appropriate is simply noise. Noise which detracts the People in the organization from being "on Purpose."

In conclusion, what the above diagram represents is an identification of the four foundational components which must be integrated if a business is to be successful. The detail of how to integrate them will probably take a book or two.


  • Collins, James C. and Porras, Jerry I. Built to Last. HarperBusiness. 1994
  • Fritz, Robert. Corporate Tides. Berrett-Koehler. 1996
  • Goldstein, Jeffrey. The Unshackled Organization. Productivity Press. 1994
  • Levitt, Theodore. The Marketing Imagination. The Free Press. 1986
  • Scott-Morgan, Peter. The Unwritten Rules of the Game. McGraw-Hill. 1994


Date: Sun, Aug 18, 1996 4:31 PM EST
From: (Linda Dilliplane)

I just read your article. It was well written and easy to understand. The only thought that ran across my mind when I read it was after reading,

"For activity to be "On Purpose" it needs to be creating customer perceived value, otherwise it's just overhead."

Everyone in the organization needs to know, understand and be on the same wavelength as to what the purpose is and what it takes to be "On Purpose". This can mean many different things to different people.

While the above thought is very basic, and perhaps it is implied, sometimes it needs to be said.

I beleive most employees really try to do whatever their bosses ask of them but many times lack of coherent communication and/or feedback derails the best of intentions. I see this as a major problem in small and large businesses, large institutions, etc. Once everyone knows what is expected and the unwritten rules also reflect what is expected, then a united organization can do wonderful things that were impossible before.

Just my thoughts.
Linda Dilliplane

Date: Sun, Aug 18, 1996 7:04 PM EST
From: (Yogesh Malhotra)


Thanks for your response. You had inquired about my comments regarding the new archetype: "People, Purpose, Process, & Data: A Necessary Unity". Here are my thoughts, not necessarily presented in the most organized manner, but as they occurred to me while reading through your article. Further, these thoughts are a reflection of my existing 'system of constructs' and are based upon my construal of the various concepts that you have talked about in your article. Feel free to reject any of these thoughts as they do not map on your conceptualization.

First, Purpose, as discussed in your article seems to differ from the traditional concept of Goal. As mentioned very rightly by you, most businesses are fixated on the static interpretation of the Purpose in terms of the Products [and also Processes]. However, considering a dynamically and nonlinearly changing environment, it is difficult to pin down a specific goal or purpose. Hence, we hear a lot of talk of Learning Organizations and the need for a 'shared Vision'. Your interpretation of Purpose seems to relate to this notion of Vision which, as you have pointed out, must relate to the [extant or potential] customers.

Second, People should employ Data to determine if the Purpose is still appropriate. Let me thing through this!! One, we have argued that the business has a long-term Vision (Purpose) in terms of creation and sustenance of customers. Two, we realize that Data doesn't have any intrinsic information value, it is only through their individual interpretations ('constructions') that People assign meaning to Data. Third, Data may be suggestive about the past, but not so about the future. This relates to the ongoing debate about the 'death of Strategic Planning.' Also, it might be difficult to understand what is "real" Data. As long as Data is based on some aspect of Measurement, we would always be bound by the limitations of our Measures. Furthermore, most businesses are laying greater thrust upon Vision, Creativity, Insights, etc., etc. in competing in the hyperturbulent environment. Data, like history, is good for learning from the past, however, it may not necessarily help in projecting the future. Furthermore, consideration of historical Data for projecting the future may be responsible for the 'Success Trap' due to the 'Theory of Business' being out of alignment with dynamically changing Reality (see Drucker, Nadler). I think you are saying the same thing when contrasting 'Purpose' and "On Purpose".

A discontinuously changing future demands discontinuous strategies. Companies cannot compete by incremental improvements in any one aspect (such as cost or quality). They would need to focus on the complementarities (Porter) of business to devise discontinous strategies and anticipate the future. In that sense, the 'complementarity' of People, Purpose, Process & Data is certainly the touchstone for future competitive [or should I say co-operative (Moore)] survival. This is the emerging future of competition which will be less and less related to data and would need a greater emphasis on the dialectical processes of knowledge creation.


Date: Sun, Aug 18, 1996 8:37 PM EST
From: (jack hirschfeld)

Gene, I checked out your PPPD piece and have a few comments:

In general, I like this piece of work, which states some important ideas about purpose in a clear and easily understood manner. On balance I think it was worth a bit of sleeplessness. There are a few place where I think there could be some improvement from my perspective, and there are one or two things that are worth further discussion, in my opinion.

Regarding your preamble-- I disagree with your remarks about "business". What you say holds true enough for a certain group of corporate managers, but I have found that many managers don't know very much about the business of their companies. The stuff about fads is certainly not true for most entrepreneurs, who are very wary of business "gurus".

In my opinion, the phenomenon you have pointed to arises from a different habit of business people, namely, that they are always seeking to increase yield. Different people may be looking for different yields, but that is the desired outcome whether they are looking to reduce head count, improve performance, reduce cycle time, cut expenses, increase learning, "manage knowledge", capture market share, retain customers, or understand system dynamics.

I like the diagram a lot, but I fear the label "people" may be too generic.

As for your discussion of "data", I find myself disagreeing with your description of it. I think I understand your point of view regarding facts, but I do not share your opinion that opinions are not facts. People's assumptions, their analyses and their beliefs may, to my thinking, all be forms of data, depending on the context. We used to have a sign up in our office which said, "Without data, it's just another opinion.*" The asterisk took you to some fine print at the bottom of the poster which said, "Unless of course you're important enough for your opinion to be data."

Finally, the use of P words makes for easy commitment to memory, but generates some awkward alliterative effects in the paragraph that begins "People should employ process..."

Jack Hirschfeld

Date: Sun, Aug 18, 1996 11:22 PM EST
From: (Mike Bolan)


I read your purpose etc. material with interest.

To provide feedback I must disclose a different view of organization.

The following ideas are as things seem to me currently....

Business people usually try to devise purposes such as the ones that you identified. They are projecting their ideas and wishes onto the business.

As far as I can establish, no organization can survive for long unless the organizations environment co-operates in some way (derived from Beer's Viable Systems work)

Any organization, including schools of fish and swarms of bees, exist in some kind of relationship with their environment i.e. they strike an inter-dependent balance with their environment.

The balance struck always involves an exchange of various things with their environment. In the case of bees, their environment provides flowers which the bees use as a source of food. In so doing, the bees pollinate the flowers etc...

In the case of a business, the organization needs certain things from the environment, authority to operate, money, staff, premises and so on. The organization must provide certain things back to the environment in exchange....if it fails to do this then it will not be tolerated for too long (maybe decades, maybe a lot less)

I don't think that customer perceived value is always the key determinant (it often is in competitive situations) but monopolies for example can often survive for many years without delivering useful value. What would happen in the US if the IRS depended on voluntary contributions do you think? Try stake holder perceived value using Ackoff's stakeholder exchange ideas (Creating the Corporate Future p31) and I think you'll be closer.

I also worry about business "creating" customers. This doesn't ring true to me. People develop needs and wants, sometimes centered around marketing materials or products offered, and often not. Customers may flock to a business but I can't see how the business 'creates' the customers. (try the attached Action Logic diagram)

By looking at the exchanges that organizations must achieve to survive (I call them critical exchanges) we can see that whatever purpose statement is developed, it must allow focus on achievement of those critical exchanges.

Therefore the purpose of an organization is to deliver its outputs to a community in some competitive way (no more effective and available way of achieving the same result)

Built to Last (Porras) appears to support such a view.

>The establishment of Purpose must be based on "real" Data, not the Data
>we select or the assumptions, conclusions, and beliefs we form from the Data.
>We need to focus on the "real" Data.

We could talk a long time about what is "real" and I suspect we'd be forced to conclude that our perceptions were the only things that were "real".

I don't know that it is useful to think that everything is data. Try the diagrams in Bill Scherkenbach's book "Deming's Road to Continual Improvement" 1991 SPC Press pp 190 - 205 or so which graphically describes Demings idea of a "theory of knowledge".

When we lump everything together into one undifferentiated whole and call it all data, we lose the distinctions. What is the purpose of dropping the distinctions?

I agree about how purpose drives process and so on. Overall, I think the approach is useful and should be tested with inputs from viable organizations to see where any weaknesses exist.

And this is the diagram Mike sent along with his comments:

Best of luck

Mike Bolan

Date: Mon, Aug 19, 1996 12:11 AM EST
From: (Mike Bolan)

Hi Gene,

Here's a little more feedback on Purpose et al

According to Ackoff, a useful systems paradigm is (more or less):

1) Identify system of interest (SOI)
2) Identify the system(s) that contain the SOI
3) Show how the roles and functions of the SOI contribute to the containing systems purpose

This means that to develop a purpose statement we must iterate between 1) and 2) and that we must understand the next higher level of recursion in order to make sense of any SOI.

What is the next higher level of recursion for a business/organization. I have it that it is the community (or a community if it is confined in some way).

Useful purpose statements must therefore deal with the containing systems needs - the next level of recursion.

This same issue applies to data. Whether we represent it as data, information, knowledge or whatever, depends upon the level of recursion that we're working with. One man's data is another man's information and so on.

What do you think?

Mike Bolan

Date: Mon, Aug 19, 1996 1:06 AM EST
From: (Raed Muhammad Abdulla Shams)

Reading Linda's comment just reminds me of the Japanese wisdom that says: "Tell me and I'll forget. Show me and I may remember. Involve me and I'll understand".

Ra'ed Shams

Date: Mon, Aug 19, 1996 7:23 AM EST
From: (Brian G. Kelley)

Hello Gene

I think the article is right on target about the problems associated with management thinking. I do have a few points that I think are important. Rather than an apparently neverending sequence, I see it as a natural evolution and refinement as we incorporate mofe and more of your four foundational components into those models. I think that each of those new theories reflects an additional facet of the complexity involved in the complex of people, purpose, process and data you identify in your article.

An example would be THeory X and THeory Y Management, THeory X management (purpose/boss) developed as the shortest route to accomplishing a purpose through people, and worked well as long as the relationship with the people wasn't taken into consideration. When you take the relationship with the employees into consideration, Theory Y (employee/purpose) might become the theory of choice. THen, after encountering the shortcomings of Theory Y, and the inherent shortcomings of Theory X, a new model arose, Situational Leadership, (Theory Z?) to address the shortcomings of both. Situational Leadership went beyond the people/purpose relationship and is based on the purpose/people(boss+ees)/process vertex of the complex.

I think that each new model of management might be explained in terms of its focus on one of the multiple vertices in the model.

You are right about the material may require two or three or even more books.

Which brings me to my next point. The complexity of the system, based on the number of relationships within the system. If you have only one factor in the system you only have one factor to explore. When you add the second factor, you don't just have two factors, you now have three items, the first factor a, the second factor b, and the relationship between those factors a/b. Adding a third factor creates creates a complex of seven items: the original three factors, and the four relationships between those three factors***. The fourth factor creates a complex of 15 items, and so on. This is the level of your basic model: four factors,people, purpose, process, and data, and the eleven relationships between the factors. The actual formula is 2 raised to the Nth power, where N=the number of factors, minus one.

This is where the real complexity begins to develop. If we look at the people portion, we could further subdivide a corporation into all the stakeholders: the stockholders, the board, the executive committee, the management team, the supervisors, the employees, the suppliers, the customers, and society at large. By just expanding one of the original factors into subsets we now have the other three factors, purpose, process, and data, with the nine identified subsets, we create a complex of 2 raised to the 12th power minus 1 (4095) items. That occurs without considering the multiple processes, purposes, or data, that might be added to the mix.

***This is the nub of the problem and inherently suggests an approach for your future expansions. According to George Miller, we can only process approximately seven items at a time. If that is true, then if my hypothesis is correct, we can only present three factors at a time with any hope of other people understanding what we are talking about. One approach that Miller suggests is to chunk the information. Chunking is organizing information into aggregates of information that are processed as units. That is one of the reasons that I chose to use THeory X (one chunk or factor) and Theory Y (another chunk or factor) as examples. The combination of THeory X and Theory Y when added to process (the third chunk or factor), almost automatically leads to the model of situational leadership with its four quadrants.

If I go back to the people subsets, I could group them in a number of ways:

  • Inside the company and outside the company,
  • management, labor, and the public,
  • company, suppliers, consumers

Each subset that I pick has basic assumptions connected with it and if I understand your article, those assumptions would define (for me), the purpose of the company, the data I consider important and examine, the processes I use to accomplish the purposes of the company.

By suggesting that people engage in a process of examining multiple subsets of each of the four factors, you will help them create a multi-faceted perspective of the company or organization, which will be more useful in determining any actions to be taken.

After I read it last night, I wanted to sleep on it, and give you your feedback without studying it again. After I examine it again I will probably give you some more feedback, but this time in more measured form.

Thanks for writing it and giving me a chance to ramble, it is a great way to start a day.


Date: Mon, Aug 19, 1996 9:04 AM EST
From: (Barry A. Clemson)

I have to react to your characterization of data vs information etc.

One person's data is merely noise to another person, and vice versa. As Jack Herschfield points out, the only real data we have is our individual perceptions... even with something as "objective" as length or counting, all we really have is a set of conventions and a perception of those conventions being properly or improperly applied to, for example, count the number of beans (is this a bean or a pebble?) or measure the lenght of the board.

As soon as we start to deal with organizations, the situation becomes enormously complicated precisely because everybody THINKS they are in more agreement on the conventions and perceptions than they really are. Paradoxically, there are also areas wherer there is more agreement than anyone realizes.

Barry Clemson
Center for Organizational Systems Engineering

Date: Sun, Aug 25, 1996 8:24 AM EST
From: (frank billot)


A few words about your PPPD work.

The Data part of it has already brought much commentaries, I will try to bring my (small) contribution to your beautiful job.

As we all know, data are not facts, facts are not information, information is not knowledge... In my opinion, there is no real data, even on the perception level. Out there, it seems that we are just having electromagnetic phenomenas. From those we pick only a part, through our sense limitations (for example, we can only hear and see a limited set of frequencies), and even through our cultural and personnal filters.

Even raw perception is not a certainty. For example, about 20% of the visual information we receive in the brain comes from the eye, the rest seemingly comes from other parts of the brain.

On top of that, most of the data treated by our organism does not reach our consciousness.

We are constructing our reality. From the context, we use one frame of reference or another to attribute a meaning to elements of the "background", making them appear as separate, and becoming the "foreground". As state it the Gestaltists, people tend to perceive the simplest form consistent with the available "informations".

In other words, we have to cut the world into separate elements, it does not appear to us as a continual flow of signs. Hence, we developp ourselves through internalization of models, that prevent us from having to deal with direct experience.

I propose to consider ourselves and the world as a system having three parts : -

  • the world -
  • our representation of the world -
  • ourselves (to simplify, because we may wonder of what is left if we throw our representations, but it would be too long to discuss)

We actually only deal with the world through our representations, that is why it matters so much to expand our mindsets.

In this regard, "noise" in the sense of incomprehensible data (or out of purpose), can become a source of future understanding. A metaphor of this, is the story of a women that realizes after years, that her husband did spend his hours of outwork with another woman; then all the forgotten clues become significant, and help redraw the behaviour of the husband.

When noise is transformed into information, that is relevant data, disorder is reduced and new meanings can be found.Reaching negative entropy is not through eliminating noise, rather through finding a pathway to integrate them into a larger picture. The idea behind this is to provide more choices, more "power". Cherishing noises from the viewpoint "If I know that I don't know, I have a chance to let it be known". This set of mind helps encountering change and complexity, inducing curiosity and enthousiasm for the unknown or incomprehensible, rather than frustration and stiffness.

That being said, I agree with your idea that purpose is fundamental in business.

I would expand it to any human activity, under the word "meaning". The way we build meanings from a world of insignificant signs (does anyone think that they do have a meaning in themselves, separately from the observer ?) can be enlightened by the systems approach.

to be continued... if you feel like, because these thoughts are just gathered from here and there; Associates, forgive by advance the "affirmativeness" of my talks, there are mostly due to my lack of ease in english

theWay of Systems * Feedback * Musings
Copyright © 2004 Gene Bellinger