Systems thinking: the fifth discipline of learning organizations

“The problems we have created in the world today will not be solved by the level of thinking that created them.” -Albert Einstein

Although the field of systems thinking had not yet hatched at the time of this quote, it is clear that Einstein was already aware of systems thinking, even if he did not call it that. He was able to recognize that if we continually approached problems in the same way, we would continue to get the same results. Human beings are creatures of habit and often find it difficult to recognize patterns of behavior that are self-defeating. Systems thinking offers tools and processes that allow organizations to see patterns and connections, leading to increased productivity.

What is a system?

According Merriam Webster’s Collegiate Dictionary, Tenth Edition, a system is “a group of elements that regularly interact or are interdependent and form a unified whole”. The keywords in this definition are “interdependent” and “all unified.” A pile of rocks is not a system because they don’t interact with each other, and you don’t really change anything by adding or taking away from it. However, if you take that pile of rocks and create a stone wall, you now have a system. Adding or removing a stone can wreak havoc. This stone wall system is more than the sum of its parts; these stones work together to create something much bigger than a pile of rocks.

Systems can range from very simple (filling a glass of water) to extremely complex (climate change) and are constantly working to maintain a level of stability. They do this by creating feedback loops using inputs and outputs. To understand the systems in more depth, let’s take a look at a simple system: driving a car. The inputs into this system are the desired destination, driver actions, and driving conditions. The output is the car moving in the desired direction. As we drive, however, we get continual feedback. We may see a small child in a yard ahead, playing with a ball, and instinctively slow down. It starts to rain, we turn on our headlights and windshield wipers and slow down. We see another car on the freeway on-ramp as we approach, we quickly check our rear and side mirror, then move into the passing lane. All of these inputs influence the system, but because we have a clear goal in mind, we generally tend to stay on track.

Organizational systems are more complex than this. There are two distinct sections of an organizational system, the internal system and the external system. The internal system consists of a variety of parts, including the products or services produced, the personnel, materials and tools used to create products or services, the relationships people have with each other – this list could be endless. The external system is everything outside of the organization that influences it: competitors, the economy, the condition of the financial industry, the environment, regulations, the political landscape, and the community, to name a few. Both the internal and external systems not only interact within themselves, but also interact with each other. Observing and understanding these interactions is the crux of systems thinking.

What is systems thinking?

The discipline of systems thinking evolved from the field of system dynamics and is both a set of tools and a new way of thinking that involves a new language. In systems thinking, we look at the whole system instead of trying to break it down into individual parts; that is, we become expansive in our thinking instead of reductionist. By looking at the whole, we are better able to see interrelationships and patterns over time. We also begin to understand that the problem that is occurring may be a symptom of deeper problems within the system, so we begin to look for the root causes. By doing so, we move away from assigning blame and focus on the desired results.

Systems thinking is proactive and circular in nature, unlike linear thinking, which tends to be reactive. There are three key systems thinking concepts: reinforcing feedback, balancing feedback, and delays. Strengthening or amplifying feedback loops is what drives growth or creates decline in systems. They can spiral up or down, although they rarely occur in isolation. There are limits to both growth and decline. A simple example of a reinforcing cycle is how an organization’s productivity can influence growth which, in turn, influences financial rewards that come full circle to influence productivity. This loop can move in a positive or negative direction, but eventually stops at an outer limit.

Balancing or stabilizing feedback loops are those that try to maintain balance. These systems are goal oriented and will do whatever it takes to reach or maintain that goal. The above example of driving a car is a balance loop because the goal is to get to the desired destination. The driver will do whatever it takes to get to that destination safely and efficiently. In organizations, we run into a trade-off cycle when our attempts to make changes only bring us back to square one. We are encountering resistance to change because the existing system is trying to maintain a particular goal. That goal, however, may not be obvious; we may find that we need to discover the mental models that hold that system in place before we have any hope of changing it.

Delays are unavoidable in any system, but they often go unrecognized. Delays cause system instability, and aggressive action to compensate for delays will likely cause organizations to exceed or miss targets. To illustrate, let’s use the example of a thermostat. In these days of skyrocketing energy prices, many of us have developed the habit of adjusting the thermostat at night to save energy. On those particularly frosty mornings, it’s tempting to turn the temperature higher than necessary in the morning, but unlike a stovetop burner, turning the temperature higher will not produce more heat. There is a delay from when the heating is turned on until the room reaches the desired temperature. If the heat is set higher than necessary, then the room will overheat. In reaction to that, we turn the heat back on to cool the room, but then the temperature drops too low and we turn the heat back on. This could go on forever if we weren’t able to learn from our actions. In systems thinking, it is crucial to develop the patience to weather delays and not react too quickly to changes in the system.

What are the characteristics of systems thinkers?

According The systems thinking playbook(pp. 3-4), a systems thinker is one who:

• See the full picture.
• Change perspectives to see new leverage points in complex systems.
• Look for interdependencies.
• Consider how mental models create our futures.
• Pay attention and give voice to the long term.
• “Zooms in” (uses peripheral vision) to see complex cause-and-effect relationships.
• Find where the unintended consequences arise.
• Reduce the “waterline” to focus on structure, not guilt.
• It maintains the tension of the paradox and the controversy without trying to resolve it quickly.

Systems thinkers are those who think outside the box. They understand that there are no right answers, just different paths to the same results. They realize that quick fixes will probably get them back to square one, and so they develop patience with the idea that cause and effect are not closely related in time and space. They understand that things can get worse before they get better, but they have learned to take the long view. By doing so, they can tap into the creative synergy that exists in organizations.

How do organizations apply systems thinking?

As with the four disciplines above, there are a variety of ways to implement systems thinking within an organization, and each organization must find what fits well within the organizational culture. However, there are key aspects of systems thinking to consider. Here is a possible approach that includes these key aspects:

events: Begin the practice of systems thinking by telling the story of the current situation. It is important to hear as many perspectives as possible. However, don’t jump to solutions right away. It may be necessary to provide a quick fix, but do so with the understanding that it is a stopgap measure and not designed for long-term solutions. In the meantime, explore the nature of the event or problem in more detail.

Behavior patterns: Track the situation over a period of time. Look for patterns and trends that go below the surface. Go back to the story, if you have the data. Those patterns are key indicators for the system.

systemic structure: Look for interrelationships in the patterns and trends you have discovered. Look for balance and reinforcement feedback and identify delays in the system. Discover the mental patterns that are driving these patterns.

mental models: Create new mental models to introduce changes in the system. Be patient – there will be delays and things can get worse before they get better. Monitoring and evaluation of the effects of changes. Determine if there are any unintended consequences and decide what needs to be adjusted.

Although this may seem like a relatively simple process, it is far from it. There are many challenges to implementing systems thinking, the biggest of which are traditions and/or habits. Patterns of behavior are hard to recognize and even harder to change, and we often feel pressure to act quickly with little or no systemic information. Finding the balance between attending to the present and creating the future is never easy.

What are the benefits of systems thinking?

Systems thinking is the thread that unites the other four disciplines of organizational learning. Organizations that engage in systems thinking are able to:

• Develop new ways of looking at old problems.
• Integrate new information more easily.
• See interrelationships and cause and effect more clearly.
• Develop patience with the implementation of change and tolerance for delays.
• Move away from the blame game towards shared responsibility.
• See the whole instead of the parts.

Although mastering each of the above benefits can take an inordinate amount of time, the investment in developing systems thinkers is well worth the time and effort. Ultimately, organizations that practice systems thinking will be able to move to the next level of thinking to solve problems and create the desired future. They will have greater control over their destiny and will be more agile in responding to environmental changes. What better way to stay one step ahead of the competition?

In my final article in this series, I will focus on how to integrate all five disciplines to create learning organizations.