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					Background Paper: Systems Thinking

A systems thinking approach (a) recognizes the interdependency of parts within the
system; (b) considers the potential impact of decisions, choices, and initiatives on what
is distant in time and space as well as what is close at hand; and (c) uses the tools and
methodologies of thinking to identify high-leverage opportunities for making significant
organizations change.

Strategic thinkers draw on both hard and soft data (for example, market research
emerging trends, intuition, informal learning, and interactions with others) as sources for
developing strategic direction, view strategy as dynamic rather than static, discover
future opportunities in day-to-day details, and involve others in contributing to the
process of shaping strategy on an ongoing basis.

System thinking embodies a worldview that looks at wholes, rather than parts, and that
recognizes the importance of understanding how the different segments of a system are
interconnected. An inherent assumption of the systems thinking worldview is that
problems are internally generated – that we often create our own worst nightmares.

For example: At some systems thinking courses, participants play a board game known
as the “Beer Game,” where they assume the position of retailer, wholesaler, distributor,
or producer. Each player tries to achieve a careful balance between carrying too much
inventory or being backlogged. When things go wrong, many people blame their supplier
(“I kept ordering more, but he didn’t respond”) or the buyers fickle consumers (“One day
they’re buying it by the truckload, the next day they won’t even touch the stuff”). In
reality, neither the buyers nor the suppliers are responsible for the wide fluctuations in
inventory – they are a natural consequence of the structure of the systems in which the
players are functioning.

The systems thinking “worldview” dispels the “us versus them” mentality by expanding
the boundary of our thinking. Within the framework of systems thinking, “us” and “them”
are part of the same system and thus responsible for both the problems and their

Systems Archetypes: Models of Common Behavior In Organizations

Systems archectypes give us a frame for thinking about behaviors in the organization
when trying to solve problems or achieve results. You will find many of them practiced in
the enterprise in which you work. You will find the following resources instructive.

Applying Systems Thinking and Common Archetypes to Organizational Issues, Pegasus
about.htm, November 8, 2009.

The System Archetypes, by William Braun. http://wwwu.uni- November 8, 2009.
Considerations for Systems Thinkers

Systemic structures are often invisible – until someone points them out. For example, at
a large bank cited by Senge et al. (1994) in The Fifth Discipline Fieldbook, whenever the
efficiency ratio goes down two points, departments are told to cut expenses and lay
people off. But when bank employees were asked what the efficiency ratio means, they
typically said, “It’s just a number we use. It doesn’t affect anything”. If you ask yourself
questions such as, “What happens if it changes?” you begin to see that every element is
part of one or more systemic structures.

Senge et al (1994, pp. 91-93) describe six expectations you should have as you practice
systems thinking:
    1. There are no right answers – Because systems dynamics illustrates the
       interdependencies within the current system, there is never a single right
       answer to any question. Instead the discipline reveals a variety of potential
       actions you may take: some high leverage and some low leverage. Each of
       these practices will produce some desired results and some unintended
       consequences somewhere else in the system. The art of systems thinking
       includes learning to recognize the ramifications and tradeoffs of the action you
    2. You won’t be able to divide your elephant in half – You can’t redesign your
       system (the “elephant”) by dividing it into parts; everyone must look at the
       whole together. Thus, you can’t practice systems thinking as an individual – not
       because the discipline itself is difficult, but because good results in a complex
       system depend on bringing in as many perspectives as possible. As you put
       together a team, make sure all necessary functions are represented, and gain
       clearance from top management to propose cross-functional solutions,
       regardless of sensitivities and politics.
    3. Cause and effect will not be closely related in time and space. Don’t look for
       leverage near the symptoms of your problem. Go upstream and back in time to
       ferret out the root cause. Often the most effective action is the subtlest.
       Sometimes it’s best to do nothing, letting the system make its own correction or
       guide the action. Other times the highest leverage is found in a completely
       unexpected source. Example:
       The founder of Cray supercomputer company, Seymour Cray, had originally
       assumed that his market was severely limited to a few supercomputer
       applications. By the early 1980s, to his surprise, customers with new kinds of
       needs began to appear. A systems thinking exercise showed that there would be
       unexpected leverage not in their proposed marketing strategy (advertising to
       technical audiences), but in promoting education for aeronautical engineering
       and movie animation, endeavors that would require supercomputers.
    4. You’ll have your cake and eat it too – but not all at once – In proposing
       systems solutions, make sure you take into account the necessary time delays.
       For example, if you propose a staff expansion, how long will it take to train new
       people? How much will that training drain the time of your existing staff? Time
       delays and other subtle aspects of the system only become apparent with time
       and experimentation. Commit to continually examining how the system is
   5. The easiest way out will lead back in – Beware the easiest, fastest solution.
      Most people prefer to intervene in a system at the level of rules, physical
      structure, work processes, material and information flows, reward systems and
      control mechanisms – where the elements are more visible and it requires less
      skill to work with them. But, as you move toward the more intangible elements,
      such as people’s deep-seated attitudes and beliefs, your leverage for effective
      change increases. You come closer to looking at the underlying reasons why the
      rules, physical structure, and work processes take their current form.
   6. Behavior will grow worse before it grows better – More often than not, as a
      systems effort makes underlying structures clearer, members of the group/team
      may have moments of despair. Jay Forrester , MIT professor, has called
      systems dynamics the new “dismal science,” because it points out the
      vulnerabilities, limited understandings, and fallibilities of the past, and the
      assurance that today’s thinking will be the source of tomorrow’s problems. But
      actually, things are finally getting better. People see formerly “undiscussable”
      problems rising to the surface. They realize how their old, beloved ways of
      thinking have produced their current problems. Their new awareness reinforces
      their sense of hope about leading an effective change.

For an example of what you can expect as you practice systems thinking, read: Targeted
Innovation: Using Systems Thinking to Increase the Benefits of Innovation Efforts.

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