Systems Thinking in Business Organizations

Systems thinking is a process that incorporates the crucial elements of strategic planning, management and leadership development, team building, and other principles of organizational change in the effort to create positive change within an organization.

The process of systems thinking works by expanding an issue to evaluate how an item is interacting with everything around it, instead of isolating the item in itself. Incorporating systems thinking into an organization requires discipline. Gene Bellinger lays out an approach that includes several steps to take a traditional organization towards thinking systemically.

"Define the situation" - Lay out the situation as it is currently seen. What is the problem and why could it be a problem. Don't be concerned with solutions at this point; they will come from a narrow point of view.

"Is Systems Thinking appropriate?" - Systems thinking requires a high level of effort. Bellinger lays out several instances of that would require the high level approach, they are:
• There are multiple perspectives on just what the situation is, and how to deal with it.
• Things seem to oscillate endlessly.
• A previously applied fix seems to overshoot the goal, has created problems elsewhere, or the problem returns in time.
• Over time there is a tendency to settle for less.
• The same fix is used repeatedly.
• There is a tendency to allow an established standard to slip.
• Growth slows over time.
• Partners for growth become adversaries.
• Limitations experienced are believed to result from insufficient capacity.
• There is more than one limit to growth.
• Limited resources are shared by others.
• Growth leads to decline elsewhere.
(Systems Thinking: A Disciplined Approach, 2004)

These examples provide insight into issues that would benefit from systems thinking. Traditional thinking obviously has not evaluated enough factors to make a significant change.

"Develop patterns of behavior" - Collect historical data and plot behaviors over time. The reference information can provide useful insight into long-running issues.

"Evolve the underlying structure" - Develop an understanding of your systems, link them together to provide behavioral patterns and issues between multiple systems. Keep it simple by focusing on relevant system relationships.

"Simulate the underlying structure" - Use simulation tools or software to run through processes and evaluate outcomes, a simulation can be manipulated to provide information over time or react to influences from outside sources.

"Identify the leverage points" - Leverage points are certain influences on a system that, either large or small, can greatly impact the whole system. Sensitivity analysis is a useful tool to uncover leverage points and evaluate the impact they will have on the system.

"Develop an alternate structure" - Leverage points can help to pinpoint where a shift in structure can provide desirable results. Other research information will also help to augment the structure in a way that creates the desired results as well.

"Simulate the alternate structure" - Test the new structure to identify any new leverage points and provide insight into how the structure will perform over time.

"Develop an adoption approach" - Create a plan that will transition the old structure to the new structure smoothly and in a way that will positively impact production.

Each step brings the whole system into consideration, not just the specific issue. Not only will this help to fix the problem, but may help to uncover potential issues. For a start-up organization, systems thinking can be an outstanding tool to utilize. While the original structure is being developed, the organization can put the above elements in place to keep focus on a systems thinking strategy.

A new organization would begin by evaluating the behaviors of other organizations to get an idea of how similar organizations have performed. Developing a new structure will include identifying leverage points and maximizing the positive impact they can have on the structure. Utilizing systems thinking from the beginning will allow a new organization to have the proper frame of mind to evaluate structures in a much wider capacity than in just supplying quick fixes to nagging issues.