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Systems thinking Series – Part 1

“Today’s problems come from yesterday’s solutions.”
~ Peter Senge

I have participated in countless workshops relating to systems, architectures, lean thinking, and design, and far too often, I have witnessed how a simple naive decision, as well-meaning as it may be, has rippled significant negative consequences through an entire organization, often lasting many years. To be blunt, this is purely a lack of not having systems thinking capability – period.  Systems thinking is not a new concept as it was first coined in the middle of the 19th century. Business executives focus much of their time on making important decisions, but the problem is that they assume because they use it, everyone in the organization knows how to use it. This phenomenon is called the “Curse of Knowledge”. But in reality, not everyone in the organization knows what systems thinking is and more importantly, the organization is not designed to foster the system thinking environment.

What is system thinking?

Systems thinking is a way of helping people view systems from a broader perspective which includes seeing overall structures, patterns, and cycles in systems rather than seeing only specific events.  In simple terms, viewing the big picture and having a holistic approach instead of just focusing on the short-term or localized benefits is what really underlines system thinking.

The human brain is a very sophisticated computational device, yet humans are forced to simplify complex problems to comprehend them. In our role, we deal with complex issues comprised of multiple variables that change both simultaneously and independently on a daily basis. For complex problems, traditional decision making is akin to solving multi-order differential equations in our head, so we are forced to simplify issues to the minimum of elements we believe best represents the issue at hand. Classically, we look to actions that produce improvements over a relatively short time horizon. However, when considered from a system perspective, short-term improvements often involve very significant long-term consequences. For example, a policy change to shift I.T. support funds to advertising in reaction to sluggish sales will usually result in increased sales in the short-term. Additionally, it may also result in the promotion of the executive who made the decision. However, as time moves forward, bringing with it inevitable leadership change, a new set of eyes can see that although increased advertising has equated to increased sales, it has also amplified the volume of customer complaints stemming from the initial decision to cut support cost in the I.T. departments.

Within an organization, thousands of decisions are taken by employees on a daily basis. If, however, systems thinking is not integral in the decision-making process, then although a decision may look beneficial in the short term, it can (and most likely will) be detrimental to the organization in the longer term, seriously affecting the company’s bottom line.

In the book The Fifth Discipline, Peter Senge (Author and senior MIT lecturer) analyses the cold war arms race between the Soviet Union and the United States and provides a prime example of systems thinking. In one instance, Americans observed the proliferation of Soviet weapons through espionage’s veil, which obscured the true information and confounded the already complex dynamics of the situation. Americans perceived the Soviet weapons as a threat to America, and in response, Americans built their own weapons. This is very logical liner thinking, depicted as:

While Americans saw the Soviets as a threat, the view from the Soviet leader’s perspective was very different. Similar linear thinking on the part of the Soviets can be depicted as:

Both perspectives were correct. Both the American and Soviet leaderships could quickly point to one another as the culprit of the arms race. However, a simplified system thinking perspective would have revealed that each nation directly impacted the outcome and that the actions of each nation directly affected the problem they faced. Depicted as a simple systems dynamics model, the cold war arms race looks very different:

This is a vicious cycle in which a single action feeds on the previous action, reinforcing the effect as the series of actions build on one another, inevitably causing them to spiral out of control. Whether it is nuclear arms proliferation or development problems at launch, there is a tendency to look outward and react to the problem from our unique vantage point.

Conclusion:

Systems thinking expands the range of choices available for solving a problem by broadening our thinking and helping us articulate problems in new and different ways. Simultaneously, the principles of systems thinking make us aware that there are no perfect solutions, and the choices we make will impact other parts of the system. By anticipating the impact of each trade-off, we can minimize its severity or even use it to our own advantage. Systems thinking, therefore, allows us to make informed choices.

I hope this helps you understand what systems thinking is and the consequences involved. Next week, I will list six easy ways for how an organization can improve systems thinking.

References:

Peter M. Senge, “The Fifth Discipline” (New York: Doubleday, 1990)

Dantar P. Oosterwal “The Lean Machine” (American Management Association)