Systems Thinking

Systems Thinking is a method for studying and managing complex feedback systems commonly found in business or other social systems. This method is at the heart of Peter St. Gee's five disciplines.

This method is about training to work with the whole in a dynamic process. Peter St. Gee's emphasis on this method requires people to change their thinking habits and look at the organization's development from a systems perspective.

This method leads people 

• from looking at the parts to the whole, 
• from looking at the surface of things to gaining insight into the structure behind their changes, and 
• from static analysis to recognizing the interplay of various factors and thus finding a dynamic balance. 

Looking at themselves and their behavior to find the causes of problems.

It is a theory and practice that integrates all other disciplines into one. This reinforces the different practices and constantly reminds us that the integration of the whole can be more effective than the sum of its parts.

This method is not just a personal mindset but also requires tools and methods that bring to the surface the mental models of team members and allow them to improve.

In business practice, cause-and-effect loop diagrams, computer modeling and simulation (future labs), and scenario planning are some tools and methods that have evolved to be effective in systems thinking.

Principles

Systems thinking originates from systems dynamics and is a development of the systems view of systems dynamics. It examines the objective world with the basic principles of systems methodology and has enriched systems methodology with its growth in the past years.

Nowadays, it is customary in the international system dynamics community to use the term to summarize the basic principles of systems methodology and its systems view.

The main principle of this method is to clarify that socioeconomic systems are dynamic and complex.

Its complexity depends primarily on the nature and complexity of the nonlinear relationships between the internal and external components of the System, the number and type of delayed links, and the combined drive and effect of internal and external dynamics and constraints of the System.

These factors will result in complex changes in the System's overall dynamic structure, function, and behavior patterns over time.

Several principles are at the heart of of this concept.

1. Holism: This type of thinking recognizes that a system is more than the sum of its parts. It emphasizes the importance of understanding the relationships and connections among the parts rather than focusing only on individual components.
2. Emergent: This approach brings to light that a system can behave as more than the sum of its parts. It recognizes that complex behaviors and patterns can emerge from the interactions between the parts of a system.
3. Feedback: This way of thinking emphasizes the importance of feedback loops, the ways in which information about the performance of a system is passed back to the System. Feedback loops can enhance or inhibit the behavior of a system.
4. Interdependence: This method recognizes that the parts of a system are interconnected and that the behavior of one part of a system affects the behavior of other elements.
5. Boundaries: This method recognizes that systems have boundaries and that systems do not go beyond these boundaries. Understanding the limits of a system is important for identifying the factors that influence its behavior.
6. Diversity: This method recognizes that diversity within a system is essential for its resilience and adaptability of the System.
7. Dynamics of the System: This System recognizes that the behavior of a system can change over time and that feedback loops and other factors can influence this change.

This systems approach can help individuals and organizations understand complex problems and design effective solutions by applying these principles.

Therefore, to determine the policy levers and points of action in the management of these systems, one must understand and grasp their "dynamic complexity" and see the main interactions and patterns of change rather than the "detailed complexity."

People must look beyond individual events, individual failures, or individual personalities. Instead, we must look deeper into the actions that affect us individually and the structures behind those actions that make them similar.

Only after seeing the interrelationships between actions and the time delays between actions and consequences will a new vision emerge that will allow for the right responses.

The Structure

This concept is used to analyze the interaction of various factors. Each element does not exist in isolation; the element has an impact on its surroundings, and the surroundings have an impact on the element.

The elements themselves can be seen as a system, and the various elements interact with each other to form a larger system. Likewise, the larger systems interact with each other to form larger systems, thus creating a hierarchy.

Systems thinking can provide a structured approach when complex systems need to be analyzed and understood. This approach usually includes the following steps:

1. Define the System: 
   Determine the boundaries of the System and the factors that influence its behavior.
2. Identify the components: 
   Identify the components or parts of the System and the relationships and connections between them.
3. Analyze the feedback loops: 
   Identify the feedback loops within the System and determine how they affect the behavior of the System.
4. Analyze dynamic behavior:
   Understand how the System changes over time and how feedback loops and other factors affect this behavior.
5. Identify leverage points: 
   Identify points in the System where small changes can affect the behavior of the System.
6. Develop interventions: 
   Identify the interventions or changes that can be made to the System to achieve the desired outcome.

Following this structured approach, individuals and organizations can better understand complex systems and design effective solutions.

This method is a systematic methodological structure for the analytical study and solution of dynamic and complex systems problems, with a materialistic systems dialectic at its core.

It is a holistic, dynamic thinking approach that analyzes and synthesizes feedback information inside and outside the System, nonlinear characteristics, and the impact of time delays.

It emphasizes a systemic, dialectical, and developmental perspective. That is, the interactions and evolving relationships among the parts of the System and between the System and the environment.

It allows us to see interconnected rather than single events, gradually changing forms rather than instantaneous scenes, i.e., it shows people a dynamic development rather than a static snapshot.

The structure and behavior of the System are dynamic, not static; the overall dynamic structure of the System, i.e., the degree of its soundness, matching, and coordination, mainly determines the System's functional and behavioral characteristics. 

Why we need System Thinking

Ideas can only be found if they are systematically organized to reveal pieces and omissions. It is difficult to see the gaps in other areas by analyzing one problem after another. Only by looking at them systematically can we find holes everywhere.

Ideas can only be organized systematically to sort out the hierarchy and sequence of problems.

Only with a macro view can we easily see which issues are the most important and which are less important, and which issues should be addressed first and which should be addressed later.

When ideas are organized systematically, they can be clearer, more coherent, fuller, and more developed. We can even make a more detailed analysis only under a systematic view.

Any enhancement loop has an external factor that continues to provide power (the speed depends on the magnitude of the force of the external pendulum). When the external factor stops, the System stops.

Any regulating loop must remain stable after reaching an equilibrium (the speed depends on the size of the inhibiting factor). If you want to break the equilibrium, you must break the inhibition factor's upper limit.

Barriers to Systems Thinking

The systems mentioned are highly distilled simplistically. The purpose is to understand the concept of the System more easily and to think systematically better. And the reality is that most things are more complex than they appear on the surface.

To learn to think systematically is to learn to explore the deeper things behind it.

1. Blame it on external causes

When things go wrong, individuals and organizations are often accustomed to looking for external causes. Unfortunately, blaming external causes is a by-product of limited thinking. It results from looking at the external world in a fragmented way.

When the effects of some actions hurt the company, they mistakenly believe that the problems are caused externally.

2. Focus on individual events

People have developed the habit of dealing with the problems around them in fragmented, focused individual events during their long life and production practices.

If one focuses on individual events, the most one can do is remedy them after they have occurred. It cannot be improved at the root.

3. Oblivious to slow change

Companies that disregard market competition and changes in the market environment do not have crisis awareness and early warning mechanisms and do not consider preventing problems before they occur.

Once the situation changes, the company will be caught off guard in the face of the changes. It may even have a serious crisis and go into decline or bankruptcy.

Many companies that were once famous have fallen from glory to the trough, often because they are not aware of the slow-onset threats.

4. The illusion of experiential learning

Direct experience is a great way to learn. Of course, it is suitable for organizations to learn from the past or the experiences of others. But more experience learning also creates an illusion that 'success can be replicated.' 

How to Think Systematically

Systems thinking is the effective response to complex systemic problem-solving. A scientific approach to making wise decisions helps to shape smart, time-tested decisions and avoid poor decisions.

For example, decisions that appear to close current loopholes but leave long-term pitfalls.

There are three modes of thinking: Dynamic, linear, and circular. Deep thinking, from focusing on individual events to insight into the inner structure of the System. Comprehensive thinking, from being limited to the local to looking at the whole picture.

1. Dynamic Thinking

It allows us to see not just the static pieces but the dynamics of the System and its ins and outs. And to recognize the subtle interactions between cause and effect.

Traditionally there has been a tendency to adopt an event-driven, reactive, linear mode of thinking. This is a problem-focused, immediate, "conditioned" way of responding. People assess the environmental situation compared to their goals.

If the actual situation differs from the expected situation, it is perceived as a problem, and measures or responses are taken.

When thinking dynamically, people can first use multiple cause diagrams to explore the nature of cause and effect and locate the cause.

Then the main causes are identified and structured. Finally, use cause-effect loop diagrams to discover the key feedback loops. This helps people break the loop and take steps toward improvement and change.

2. In-depth thinking

A famous iceberg model in systems thinking reveals the hierarchy of people's thinking, with events at the top of the iceberg and patterns and structures at the bottom.

To deeply understand this System, it is necessary to think one more layer deeper: "Why did this event happen?”; "What events will happen in the future?" To get these answers, you first need to connect the events in question to see if there are trends or patterns.

From there, you further analyze and sort out the cause-and-effect relationships behind these trends and patterns: what influences there are, what interconnections and feedback effects exist between them, and their paths of growth and dynamics of change.

These things we call the structure of the System, and the structure here does not refer to the logical structure or the reporting relationships between the members of the organization but rather to the critical influencing elements of the System and the interconnections between them.

When we think deeper, we can use behavior pattern diagrams to recognize the dynamics of system change. A behavior pattern diagram is a very basic and simple tool that consists of a horizontal axis (time) and a vertical axis (performance of variables).

In the diagram, a curve represents the evolutionary pattern of a problem or variable over time. Using a behavior pattern diagram, one can roughly infer the underlying structure of a system.

The most basic behavior patterns are exponential growth, seeking, and oscillations.

3. Thinking holistically

One of the fundamental requirements of systems thinking, which is holistic, is to sort out complex relationships in a well-organized manner to ensure that essential entities are not left out.

An aid to holistic thinking is the Entity Relationship Diagram, which shows all relevant topics in the System and the key feedback relationships between them relative to the System's constituent elements.

It typically includes two categories: 

1. entities and 
2. feedback between entities.

The most effective tool for profoundly representing system structure is the causal loop diagram, also known as the system cycle diagram. It is a basic tool for systems thinking.

A causal loop diagram consists of two types of elements: variables and connections, which form a series of closed loops that reflect the various key factors that influence the behavior of the System and their relationship to each other.

Any closed loop either enhances or regulates a loop, and the combination of different types of loops makes the system change in various dynamics.

Researched and authored by Zezhao Fang | LinkedIn

Reviewed & Edited by Ankit Sinha | LinkedIn

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