Systems thinking is an entirely different way of managing your organization. A typical organization uses many different methods to market a product, buy merchandise, manage customer relationships, and so much more. By learning how to manage these procedures, you’ll be able to run your company more effectively.

While business managers and entrepreneurs use this style of thinking, it is also quietly growing in popularity in fields like cybernetics, biology, and others. Researchers take a systemic perspective when figuring out how techniques work and how they can be more proactive within them. If you can anticipate what will happen, you can shape the outcome you want and control the system.

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As the next few decades unfold, this form of thinking will become increasingly important. Within a global environment, managers will need to be competent in understanding and using the principles behind this innovative thinking style.

what is systems thinking

What Is Systems Thinking?

The concept of system thinking is a unique way of approaching methodic or systemic behavior. In essence, it is a different way of seeing and talking about the reality we live in each day. By understanding and thinking in this way, you’re also able to create a different set of tools for approaching each problem.

Ultimately, the goal is to understand the behavior of a key process. This, in turn, allows you to figure out how to manage them.

At a basic level, a system is a collection of interrelated or interdependent parts, which form a unified whole. These interacting parts have to interact, or they wouldn’t be a part of a system in the first place.

For example, a collection of pillows on your bed isn’t a system because they don’t interact. But what about a pile of decomposing wood chips? Because of the way the fungi and mold grow on the wood chips and feed insects in the area, this pile of chips would be an excellent example of a system in nature.

Systems thinking takes a holistic approach to how different parts of a methodology interrelate. In traditional analysis, people only looked at the separate elements in a system. By thinking in systems, you can understand the balancing and reinforcing processes which cause system behavior.

A reinforcing process is a behavior which, if left unchecked by a balancing process, can lead to the system’s collapse. This kind of behavior basically increases some kind of system component. Meanwhile, a balancing process works to maintain the system’s equilibrium.

With this type of thinking, it is important to pay attention to the feedback you get. For management systems, you may want to add workers to a project which is running behind schedule. In reality, adding workers may have slowed down previous projects because you had to train incoming team members.

If you are paying attention to this feedback, then you know adding new team members right now wouldn’t work. Instead of wasting resources, you’d seek out an alternative method. You might try removing a few steps in the process, scheduling more hours, or some other technique to accomplish the work on time.

With systems thinking, you can use diagrams, graphs, and computer simulations to illustrate and model systems behavior. Then, this information allows you to predict what will happen. The entire foundation of this thinking style began in 1956 with Professor Jay Forrester at the Massachusetts Institute of Technology.

systems thinking behavior over time graph
An example of a behavior over time (BOT) graph

While there are many tools for looking at a system, a behavior over time (BOT) graph and a causal loop diagram (CLD) are two of the most common. The CLD shows relationships between different elements in the system. In comparison, the BOT shows the actions of one or multiple variables over a set amount of time.

systems thinking causal loop
An example of a causal loop diagram (CLD)

For managers, a simulation model and a management flight simulator are extremely useful. The simulation model allows you to look at the interaction of different elements over time. Then, the management flight simulator helps you simulate how different management decisions will affect the system.

Systems Approach to Management

When you use system thinking in management and operations, it helps you to make the right business decisions. Basically, you analyze each business decision according to the systematic consequences it could have. If you wanted to buy a new manufacturing tool, this kind of thinking would make you analyze the cost of employee training, infrastructure, and business delay required.

Ultimately, the goal of thinking in systems is to help you avoid wasted time, money, and other resources. A systems approach to management thinks of the organization as a set of interrelated and dynamic parts. Each of these parts is a department and a sub-system within your organization.

Within these departments, there are even more subsystems. For the larger organization to reach its goals, all of these subsystems must have effective, continuous interactions. It is these mutually dependent parts and subparts working together which make the whole organization function properly.

The system approach involves integrating goals from different parts of the organization into the whole organization. This allows the system to maintain a balance and equilibrium. The system must also incorporate its own goals if it plans on growing.

This kind of thinking also looks at the impact of current and future activities. Organizations must change in response to internal and external factors. Ideally, the organization will also be a market leader as it creates a competitive environment.

In a business environment, the system typically involves different fields of study like psychology, marketing, accounting, economics, and information systems. By using all of these fields of study effectively, the business can improve interactions between different parts. Through a systems perspective, the organization can frame policies, operate in a social environment, and promote business objectives successfully.

The 5 Advantages of Systems Thinking

While there are many advantages to the systems perspective in business, there are also some drawbacks. Critics believe this is only a theoretical approach, and it is hard to define the exact relationship between different components in a real organization.

One of the biggest drawbacks is how specific a systems approach is. It is impossible for the same exact system to exist in different organizations and departments. Because of this, the systems approach doesn’t offer a uniform concept which can work for all kinds of organizations.

However, there are a number of advantages to using the systems approach. By using this approach, you can make your workplace more efficient and take a holistic view. In addition, this approach may even be able to save your company money in the long run by simplifying your staffing needs and business operations.

1. Failure Can Be a Good Thing 

One common discovery system thinkers make is about failure. When you view everything as a system, you aren’t a failure. It is only the system which failed temporarily, not you or your organization.

While you ultimately want your business to become a success, some failures can be good things that teach lessons and lead to correct decisions being made in the future. If Thomas Edison gave up after making 9,999 failed inventions, he would have never succeeded. Instead, he famously kept trying and found success after the next attempt.

2. Optimization Is Key 

How are you going to develop a successful company? What will you do to improve your employees’ work processes? Does it seem like you are running out of ways to beat your competitors?

If you don’t know how your employees interact and how the system works, you can’t optimize your business processes. You must understand the entire system in order to make changes to simplify the steps involved. By using a systems perspective, you can remove unnecessary steps and find effective short cuts which can save your company money.

3. A 3D Perspective

When you work in a specific department, you tend to see solutions to problems in your own way. A carpenter looks for a nail to fix a problem, and an accountant reaches for their calculator. As a business manager, you don’t want to have such a narrow, department-specific focus on resolving issues as they will rarely need the same efforts to solve them.

Instead, you need to take a step back and look at the entire ecosystem and gain a transdisciplinary understanding of the system. This holistic view helps you unlock your creativity and find new ways to achieve your organizational goals.

4. Discover Interconnectivity

There are workplaces where people from different departments constantly bump into each other. The designers made these buildings to increase interdepartmental communications and cause the kind of serendipity which leads to unusual solutions.

With a systems approach, you realize everything is dynamically interrelated. Each person needs their co-workers to achieve success. The systems style of thinking gives you the tools to integrate interconnectivity, creativity, and productivity into your workplace.

5. Developing a Love of Problems

Most of the time, managers actively work to avoid problems. While you should probably work to minimize negative complications or issues with teamwork among your group, some problems are worth pursuing in extra detail. Solving an intricate problem could give you a better way of conducting business, a new invention or an entirely different approach to life.

Instead of avoiding complexity, a systems approach helps you see problems as exciting opportunities. These problems offer potential ways to innovate and develop your creativity. Rather than shy away from difficult issues, your employees turn into active problem solvers.

Adopting a Systems Approach in Your Workplace

No matter how large or small your organization is, it undoubtedly includes multiple systems which work together to achieve your objectives. When you only address one part of the problem, you will likely never find a long-term solution. By looking at the interconnected dynamics of the system, you can discover a better way of conducting your business.

Systems thinking can help you revolutionize your workplace across every vertical. If you put the systems approach to work in your company, a better and more efficient business could be right around the corner.
Learn more ways to boost your business processes by checking out the Teamweek blog!

Logan Derrick

Logan Derrick

Logan Derrick is a full-time business writer and content marketing strategist. For years, he has worked closely with several project management professionals, learning from them and increasing his own knowledge of the industry. Having held multiple management positions in fields ranging from customer service to marketing, Logan has found a passion for helping others learn about project management, marketing, and the powerful tools available to professionals today.
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