systems-thinking

What Is Systems Thinking? Systems Thinking In A Nutshell

Business / By / November 26, 2021

Systems thinking is a holistic means of investigating the factors and interactions that could contribute to a potential outcome. It is about thinking non-linearly, and understanding the second-order consequences of actions and input into the system.

Understanding systems thinking

Systems thinking is based on systems theory and is responsible for one of the major breakthroughs in the understanding of complex organizations. Systems theory studies systems from the perspective of the whole system, various subsystems, and the recurring patterns or relationships between subsystems. 

The application of this theory in an organizational context is called systems analysis – of which systems thinking is a primary component. In general terms, systems thinking considers systems in terms of their overall structures, patterns, and cycles. This broad and holistic perspective enables organizations to identify solutions that address as many problems as possible.

In systems thinking, these solutions are known as leverage points because they leverage improvement throughout the system. Prioritizing leverage points across an entire system is called whole systems thinking.

The approach differs from traditional analysis methods which study systems by separating them into their constituent parts. In addition to analyzing organizational complexity, systems thinking has also been used in medical, environmental, political, economic, and educational contexts.

Why use systems thinking?

By considering the system as a whole, systems thinking encourages organizations to broaden their perspectives and consider new or innovative solutions. This is particularly important for problems that are:

  • Chronic – that is, they are not a one-time event.
  • Familiar – or those that have a known history of repeated occurrences.
  • Complex – where people have unsuccessfully tried to find a solution in the past and failed.

Perhaps more profoundly, systems thinking promotes the idea that there is no perfect solution to any situation. Every decision the business makes will impact other parts of the system, so the “right” decision may be assumed to be any with the least severe negative impact. 

For project teams, systems thinking diagrams are also important in telling compelling user stories. Diagrams that deal with cause and effect force the team to develop shared pictures and stories that can be understood and communicated by every member.

Six key themes of systems thinking

Here are some of the key themes that comprise a systems thinking mindset:

  1. Interconnectedness – systems thinkers understand that everything is connected. Trees need carbon dioxide, water, and sunlight to thrive. Humans, in turn, can only survive by eating the food and oxygen that trees and other plants produce. Systems thinkers see the world as a dynamic, chaotic, and interrelated arrangement of relationships and feedback loops.
  2. Synthesis – in most cases, synthesis means the act of combining things to create something new. In systems thinking, synthesis means separating complexity into manageable parts to understand the whole and the parts simultaneously.
  3. Emergence – a term used to describe the natural outcome of things interacting with one another. Key characteristics of emergence include non-linearity and self-organization.
  4. Feedback loops – a natural consequence of interconnectedness are the feedback loops which flow between the elements of a system. There are two main types: reinforcing and balancing. Reinforcing feedback loops involve elements in the loop reinforcing more of the same, such as population growth in a large city. Balancing loops are comprised of elements in some form of harmony, such as the relative abundance of predators and prey in an ecosystem.
  5. Systems mapping – this is one of the key tools in a system thinker’s arsenal. There are many ways to map a system, including behavior-over-time graphs, iceberg models, causal loop diagrams, and connected circles. Whatever the method chosen, it should define how the elements within a system behave and how they are related. Insights can then be used to develop effective shifts, interventions, policy, and project decisions.
  6. Causality – systems thinking also encourages the individual to consider causality as a dynamic and constantly evolving process. Most people understand simple cause and effect, but relatively few can apply the concept to gain a deeper understanding of system feedback loops, agency, connections, and relationships.

Key takeaways:

  • Systems thinking is a holistic means of investigating the factors and interactions that could contribute to a potential outcome. In addition to analyzing organizational and project complexity, it is also used in medical, environmental, political, economic, and educational contexts.
  • Systems thinking promotes the idea that there is no perfect solution to any situation. This helps the organization choose the best course of action by anticipating the potential impact of each option.
  • The systems thinking mindset is comprised of six key themes: interconnectedness, synthesis, emergence, feedback loops, systems mapping, and causality.

Connected Business Frameworks

second-order-thinking
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and any eventuality. It also discourages the tendency for individuals to default to the most obvious choice.
first-principles-thinking
First-principles thinking – sometimes called reasoning from first principles – is used to reverse-engineer complex problems and encourage creativity. It involves breaking down problems into basic elements and reassembling them from the ground up. Elon Musk is among the strongest proponents of this way of thinking.
ladder-of-inference
The ladder of inference is a conscious or subconscious thinking process where an individual moves from a fact to a decision or action. The ladder of inference was created by academic Chris Argyris to illustrate how people form and then use mental models to make decisions.
six-thinking-hats-model
The Six Thinking Hats model was created by psychologist Edward de Bono in 1986, who noted that personality type was a key driver of how people approached problem-solving. For example, optimists view situations differently from pessimists. Analytical individuals may generate ideas that a more emotional person would not, and vice versa.
second-order-thinking
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.
lateral-thinking
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.
moonshot-thinking
Moonshot thinking is an approach to innovation, and it can be applied to business or any other discipline where you target at least 10X goals. That shifts the mindset, and it empowers a team of people to look for unconventional solutions, thus starting from first principles, by leveraging on fast-paced experimentation.
design-thinking
Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.
catwoe-analysis
The CATWOE analysis is a problem-solving strategy that asks businesses to look at an issue from six different perspectives. The CATWOE analysis is an in-depth and holistic approach to problem-solving because it enables businesses to consider all perspectives. This often forces management out of habitual ways of thinking that would otherwise hinder growth and profitability. Most importantly, the CATWOE analysis allows businesses to combine multiple perspectives into a single, unifying solution.

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