Month: June 2013
So, what is ‘systems thinking’ and why should CEOs view it as their next competitive edge for years to come?
System dynamics is an approach to understanding the behaviour of complex systems over time. It deals with internal feedback loops and time delays that affect the behaviour of the entire system.What makes using system dynamics different from other approaches to studying complex systems is the use of feedback loops and stocks and flows. These elements help describe how even seemingly simple systems display baffling nonlinearity.
Companies often make a conscious decision to not innovate. Why do companies choose to do this? Why is it so hard for their employees to innovate?
Why failure? Because they are the unforgiving anchors around which society changes directions.
In the U.S. we are now witnessing a record number of failures taking place. Just look around. Failed businesses, failed systems, failed jobs, and failed marriages.
Some failures are easily predicted, where a known problem looms larger and larger until a solution is found. Most, however, are not so easy. In many respects, failures are nature’s own system for checks and balances.
Understand system dynamics, system thinking, systemic approach, system example, applying System Thinking in IT environment.
Why System Dynamics?
The general approach is to always think in a single dimension and sequentially. Most of the time, time is spent addressing single elements without understanding relationship and impact with other areas and elements of the system.
The dynamics within which a system operates (time and space) are not clearly understood undermining system performance. Emerging properties that are generated are not considered or not properly understood.
From a business perspective: extensive investments are made but no real efficiency and effectiveness improvements are derived, productivity objective are not achieved.
* Efficiency doing more with less, generating more revenue with less costs
* Effectiveness generating more profit
System perspective is not just relevant to an organization but it is in everything. Some examples of systems:
- Car door sub-system : part of car system
- Business organization
- European Union Economic System
- Human body is a system
- Formula 1 Motor racing
In the above examples one must always maximize the system rather than the individual elements. The dangers of focusing on individual elements and not understanding emerging properties can result in the following.
Senge’s 11 Laws of Systems
In The Fifth Discipline: The Art and Practice of the Learning Organization, Senge suggests 11 laws of systems that support that essential understanding:
- Today’s problems come from yesterday’s solutions. Leaders are happy to solve problems, but don’t always think about intended and unintended consequences. Too often our solutions strike back to create new problems.
- The harder you push, the harder the system pushes back. Humans have a stubborn tendency to bully our way through tough situations when things are not working out as we would hope. We charge ahead without taking time to think through solutions to find better alternatives. Sometimes we solve problems; more often, especially in the current environment, we find ourselves up to our ears in more problems.
- Behavior grows better before it grows worse. Short-term solutions give temporary improvement at best but never eliminate fundamental issues and problems. These underlying problems will make the situation worse in the long run.
- The easy way out leads back in. Leaders often have a few quick fixes in their “quiver” of solutions that have brought quick and easy success in the past. Too often, the easy way out is retrofitting these fixes to any situation without regard to the unique contexts, people and timing.
- The cure can be worse than the disease. Often, the easy and familiar solution is not only ineffective but addictive and dangerous. It might even induce dependency.
- Faster is slower. At the first taste of success, it is tempting to advance at full speed without caution. Remember that the optimal rate of growth or change is far slower than the fastest growth or change that is possible.
- Cause and effect are not always closely related in time and space. We are good at finding causes, even if they are just symptoms unrelated to root causes.
- Small changes can produce big results — but the areas of highest leverage are often the least obvious. The most grand and splashy solutions — like changing company policy, vision, branding or tagline — seldom work for transforming change. Small, ordinary but consistent and repetitive changes can make a huge difference.
- You can have your cake and eat it too — but not all at once. Rigid “either-or” choices are not uncommon. Remember that this is not a dilemma if we change our perspective or the “rules” of the system.
- Dividing an elephant in half does not produce two small elephants. As a leader, you can fail to see the system as a whole at your peril.. This flaw in perception and vision often leads to suboptimal decisions, repeated tasks, lost time and energy, and maybe even losing followers.
- There is no blame. People and organizations like to blame, point fingers and raise suspicions about events, situations, problems, errors and mistakes. Sometimes we even believe the blame we throw around. In reality, we and the cause of events, situations, problems, errors and mistakes are part of the system.