The process of analyzing how a system's different parts interrelate and how systems work within the context of other bigger systems
Systems thinking is an approach to analysis that zeros in on how the different parts of a system interrelate and how systems work within the context of other, larger systems. It is a holistic approach that can be used in many areas of research. It can be useful in analyzing a variety of operational systems, such as medical, political, economic, environmental, and educational systems.
History of Systems Thinking
The concept of “Systems Thinking” originated in 1956, when the Systems Dynamic Group was created by Professor Jay W. Forrester at the Sloan School of Management at MIT. It utilizes computer simulations and different graphs and diagrams to illustrate and predict system behavior. Some of the popular graphics used in the analysis include the causal loop diagram, the behavior over time graph, the management flight simulator, and the simulation model.
Systems Thinking in the Workplace
When it comes to managing organizations, many find systems thinking an effective approach, as it sees how different complex entities interact and influence each other and make up the whole system. Different divisions or teams within an organization connect with and affect each other. Ideally, they work together toward a goal. Business leaders who are systems thinkers see “the big picture”, and that is what they focus on to maximize performance within the organization.
Aside from understanding how various components work with and affect each other, systems thinkers also consider how their actions in any component can affect the system as a whole. There’s also the concept of supply and demand, where systems thinkers know when and where their outputs will be needed, as well as the external factors that can affect demand. They also understand the capacity of their organization to meet the marketplace demand.
An essential component of systems thinking is focusing on feedback. Giving attention to relevant feedback enables business leaders to come up with solutions to problems and to avoid wasting resources. Maximizing operational efficiency is a primary goal of using systems thinking analysis.
When business leaders are systems thinkers, they veer away from the practice of just giving instructions and controlling the system. For example, systems thinkers recognize the importance of integrating the personal goals of employees with the overarching business goals of the company. Therefore, they employ a management style that puts emphasis on recognizing and rewarding employees’ individual accomplishments, and that seeks to keep employees well-informed regarding the company’s primary goals and how their contributions are each individually important in the achievement of those goals.
Creating a Systems-based Organization
Not all leaders gain a systems perspective, partly because of the organizational structure. In many cases, each division or team has its own manager, goals, tasks, budgets, and KPIs. As a result, teams only focus on tasks assigned to them. Also, many organizations function in a top-down, command-and-control format. In systems thinking, business leaders allow employees to understand how the organization works and encourage them to help improve processes to meet overall corporate goals.
Final Word
Are you a systems thinker? Taking a systems perspective is no easy feat. It involves not only the senior management – everyone in the organization needs to understand the business goals and what processes to implement to achieve them. It is essential to develop the practice of seeing the system as a whole and taking actions that will be beneficial for the entire organization.
Related Readings
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Years ago, I was working in the corporate organizational development office at an international electronics company in South Korea. I was at the beginning of my career and excited for the adventure of working for such a large company, in a foreign country, doing the work that I love. I was the only American in the division, and having lived and worked in South Korea for two years previously, I had developed relative fluency in the Korean language and familiarity with the culture.
Very early on in my time on the job, the division vice president asked me to work on a project related to gender equity issues at the company (perhaps because I brought an outside perspective). Being so young and a non-native speaker, I was worried about how I could possibly tackle such a complex and challenging issue at such a large organization. And I was concerned about how I could possibly convince executive leadership to take the steps that this young, naïve American would recommend.
Though I did not have the vocabulary for it at the time, as I reflect back on this experience, I realize that what I did was take a systems-thinking approach to organizational change and development. Additionally, I did not try to convince leadership to adopt my recommendations. Rather, I created a compelling and holistic case for striving for greater gender equity at the company, mapping out the interconnectedness and causality of various inputs and outputs, and I asked a series of probing and reflexive questions that guided leadership to ultimately arrive at the desired conclusions all on their own.
Overview Of Systems Thinking And Organizational Change And Development
Systems thinking has been gaining significant interest lately as a comprehensive approach to introducing organizational change and development. Through systems thinking, a number of core concepts and practical tools can be applied to better understand the complexity of each organization.
There are many competing definitions of systems thinking in the academic literature. As Ross D. Arnold and Jon P. Wade point out in their recent article, “Systems thinking is, literally, a system of thinking about systems.”
Organizational development “refers to the context, focus and purpose of the change while developing an organization.” Additionally, one recent definition of organizational development states: “Organizational development is a critical and science-based process that helps organizations build their capacity to change and achieve greater effectiveness by developing, improving, and reinforcing strategies, structures, and processes.”
In essence, good organizational change and development require a systems-thinking mindset and an interdisciplinary, holistic approach to tackling complex organizational challenges.
Six Themes Of Systems Thinking
Although systems thinking may be considered a talent, there is a lot of supportive theory and a stack of tools to use when applying it. Leyla Acaroglu, a systems-thinking educator, points out six key elements to creating a systems thinking mindset: (1) interconnectedness, (2) synthesis, (3) emergence, (4) feedback loops, (5) causality and (6) systems mapping.
Interconnectedness and synthesis relate to the dynamic relationships between various parts of a whole, the process of obtaining expected synergies between parts of the company. This includes the idea of circularity, which stresses the requirement of a mindset shift from linear to circular. Similarly, the concept of emergence relates to the outcomes of synergies that can come about as the elements of a system interact with each other in nonlinear ways. In the workplace, this often takes the form of the push and pull that happens due to organizational politics and competing priorities. Organizational leaders with a systems-thinking mindset will see this as an opportunity for enhanced collaborations and innovation.
Balancing and reinforcing feedback loops within an organization serve as guidance for making adjustments as we learn more about the interconnectedness of the elements of the system and their outcomes. Additionally, causality refers to the flows of influence between the many interconnected parts within a system. As we better understand the casualty and directionality of these elements, we will have an improved perspective on the many fundamental parts of the system, including relationships and feedback loops. In the workplace, a skilled systems-thinking leader will ensure that mechanisms for multiple feedback loops are established and effectively communicated to their employees. Furthermore, they will understand correlation versus causation as they use the data gathered from the feedback loops to enhance workplace practices.
Finally, systems mapping is a tool that systems thinkers can use to identify and visually map out the many interrelated elements of a complex system, which will help them “develop interventions, shifts, or policy decisions that will dramatically change the system in the most effective way,” as Acaroglu explains it. By visually laying out the key inputs and outputs, all of the stakeholders and the directions of the flows of information and influence, you can visually start to see and more deeply understand the nonlinear complexity of the given system, which can help you make appropriate adjustments to workplace policy, practice and associated systems in your organization.
Conclusion
Contemporary businesses operate in ecosystems full of interconnectedness and constant feedback loops. Mapping such complex systems helps organizational leaders navigate into adaptive strategies. The ultimate gain is the ability of organizations to be responsive to the changes in ecosystems and to be prepared to fine-tune and adapt parts of their organization on the fly. With this understanding, systems thinking provides clear benefits to organizations. It helps in framing complex problems, which are often being misdiagnosed when using linear thinking. It shows alternative directions for improvement with respect to the company’s inner and outer connections. It gives a significant advantage in increasing the organization’s capacity for change and, as a consequence, to fulfill the vision of business sustainability. Although it requires some talent and a deeper understanding of complexity and ambiguity, systems thinking can be successfully introduced and utilized to strengthen organizations.