Systems Thinking Powers Actionable Solutions in Three Easy Steps
The Past Is No Playbook for the Future
Issue 76: Oct 6, 2022
If by chance you have been asleep for the past three decades, you may have missed the success of a systems thinking strategic model. Everyone who understands climate change realizes that we (all of us, sentient and non) live in a closed-loop, interconnected system. That understanding is based on the ability to look at life holistically, connecting the parts to the whole and recognizing that every action causes ripple effects throughout the system. We’ve just seen one possible interconnected outcome of global warming with hurricane Ian slamming into Florida – and there was plenty of warning.
What does this have to do with running and operating an organization? Everything! Our organizational constructs mimic the natural order, and one major misstep throws the system off balance. How do we know? We are finding that organizations when they are in trouble seek to assess their traditional models (governance, board, policies, bylaws, charters, management) to guide them in the development of a new strategy. But evolution of an actionable plan is not possible without understanding how all the parts across the interdependent systems connect. The internal system is important of course but fixing an internal system without an understanding of the external system and how the external system influences some or all an organization’s parts – not the least of which is understanding if the market environment has changed — comes with a cost now and in the future.
We repeat popular sayings from time to time to coach ourselves personally or in context of our professional roles. For example, we have “Three strikes and you’re out; you only get one chance at life so make the most of it; and just do it.” Those sayings may be relevant from time to time for a given situation, or they may be cliches. Sayings are not strategies.
In a dynamically changing marketplace where business models continue to be upended and consumer wants, needs and behaviors continue to change — and even where public discourse remains sharply divided — simple luck or doing something out of context or off step comes with consequences an organization may not be able to recover from.
Take One Step, In Step, at a Time.
When unpacking a problem, it is wise to take logical, sequential steps to reveal how various aspects of the problem are in relationship to one another. Typically, we forge ahead and tackle the problem based on the obvious, which is inevitably a short-term fix. If your organization is perceptually or truly broken, it is assuredly the result of many parts of the system that are broken. Some may be performing well but the desired results are lackluster. Broken parts feed the perception (or reality) of larger breakdowns and the failure to see the overall problem exacerbates the dysfunction. Critical thinking is the tool to identify and assess the real problems; holistic and structured thinking is the key to unlocking the systemic path forward.
To Think Systemically, or Not
A word about systems thinking. If you ask Wiki, “Systems thinking is a way of making sense of the complexity of the world by looking at it in terms of wholes and relationships rather than by splitting it down into its parts. It has been used as a way of exploring and developing effective action in complex contexts.” If you ask Study.com, “Systems thinking is an essential component of the decision-making process within an organization’s management team.” If you ask educator Dr. Marie Morganelli, “Systems thinking is a holistic way to investigate factors and interactions that could contribute to a possible outcome. A mindset more than a prescribed practice, systems thinking provides an understanding of how individuals can work together in different types of teams and through that understanding, create the best possible processes to accomplish just about anything.” And a simpler way to telescope the whole discipline of systems thinking is defining it as a three-dimensional mindset that is needed to think and work in circular systems. Sociologist Leyla Acaroglu adds that systems thinking has a specific vocabulary; words like synthesis, emergence, interconnectedness, and feedback loops are part of the working language.
Bringing it back to the parallel between organizations and the natural world, systems thinking “requires a shift in mindset, away from linear to circular. The fundamental principle of this shift is that everything is interconnected. We talk about interconnectedness not in a spiritual way, but in a biological sciences way. Essentially, everything is reliant upon something else for survival. Humans need food, air, and water to sustain our bodies, and trees need carbon dioxide and sunlight to thrive. Everything needs something else, often a complex array of other things, to survive,” according to Acaroglu.
In terms of organizational dynamics and problem solving, we need to rely on the fact that each interdependent part influences, impacts or even compromises the other parts. Here’s an example: An organization identifies, based on face value and/or assumptions, that marketing must be the cause of failing customer acquisition. The marketing team makes changes independently. But that may not be the answer. In actuality, the organization has failed to see that their offerings aren’t in demand. You can’t solve the problem with better marketing tactics for products or services no one wants. The real problem may be a broken value proposition — a disconnect with market needs or competitors in the marketplace, and therefore offering what customers don’t want. It’s a recipe for disaster.
Let’s take a closer look at the language of systems thinking, and you’ll see how it is relevant to organizations facing challenges – adapted from Acaroglu’s work.
- “In systems thinking, the goal is synthesis, as opposed to analysis, which is the dissection of complexity into manageable components. Analysis fits into the mechanical and reductionist worldview, where the world is broken down into parts. But all systems are dynamic and often complex; thus, a more holistic approach leads to understanding phenomena. Synthesis is about understanding the whole and the parts at the same time, along with the relationships and the connections that make up the dynamics of the whole.”
- From a systems perspective, “larger things emerge from smaller parts: emergence is the natural outcome of things coming together. In the most abstract sense, emergence describes the universal concept of how life emerges from individual biological elements in diverse and unique ways. Emergence is the outcome of the synergies of the parts; it is about non-linearity and self-organization, and the term emergence describes the outcome of things interacting together.”
- Since everything is interconnected, there are constant feedback loops and flows between elements of a system. “The two main types of feedback loops are reinforcing and balancing. A reinforcing feedback loop is not usually a good thing. This happens when elements in a system reinforce more of the same bad behavior, strategy, or models. A balancing feedback loop, on the other hand, is where elements within the system balance things out. Nature basically got this right: if you take out too much of one animal from an ecosystem, the next thing you know, you have a population explosion of another, which is the other type of feedback — reinforcing.”
- Cause and effect are common concepts. “Causality as a concept in systems thinking is really about being able to decipher the way things influence each other in a system. Understanding causality leads to a deeper perspective on agency, feedback loops, connections, and relationships, which are all fundamental parts of systems mapping.”
Overcoming the Odds
So, Let’s get back to the matter at hand: organizations attempting to solve problems using legacy systems and tools. By using systems thinking, it is possible to identify what the real problems are. We suggest a three-step plan to kickstart the process. The three steps appear to be simple, but we find that many organizations struggle with them because they discover what they don’t want to know and may reluctantly determine that change or transformation is needed. Change and transformation causes anxiety. The pathway ahead is unclear, fraught with challenges and the outcome is uncertain. We don’t like change, we don’t want to change, and we don’t want to put ourselves in a construct that is uncomfortable, different from how we currently define ourselves, our roles and contributions, and how we see the organization. Although we are comfortable with set ways, they reflect the past. And remember, the past is the past, it is informative but not indicative of the present or the future. Being stuck isn’t a good roadmap for transformation and change.
The Three-Step Organizational Problem-Solving Framework
The three steps reveal the interdependencies within the systems and will also reveal a reality that is different than assumptions and perceptions.
- Conduct a market assessment to identify the opportunities and the competitive forces at play in your space. The tools are data and analytics, and the skillsets are transforming information into meaningful intelligence.
- The market assessment will inform what strategy is possible, what strategy makes sense and acts as a reality check in terms of what can be achieved. The tools are critical thinking, and the skillsets are thinking holistically, factoring in all aspects of the organization and its stakeholders.
- Completing the first two steps feeds into conducting a governance and management review to determine if the current organizational model will fulfill the strategy or if an overhauled organizational model is required to move forward. The tools are synthesis and seeing the situation systemically; the skillsets are active listening, empathy, and shared purpose.
Execution on these three steps will avoid the temptation to latch onto the obvious problem assuming it will solve the overall situation. As we said, that could be a short-term fix, but doesn’t ensure sustainability for the long term. Context cannot be overlooked. Without understanding the context of how the market may have changed, what it now expects, or what the opportunity is — before establishing a new strategic direction, you will run around in a circle ending up in the same dysfunctional place you started. The path forward is to honestly examine your assumptions. Is there something inherently wrong with the organizational structure? Or is that a scapegoat for the real issues. Do you assume your audience is out there and will simply engage with you come if you do something different? Do you assume your workforce is aware of and informed about the issues and understands how it fits into the solution? False assumptions are the killer to meaningful solutions and have no place in systems thinking.
A Holistic Solution
Not falling back on the tried-and-true solutions requires analyzing and/or defining a new value proposition. Viewing the problem holistically is really using common sense. Think of the language of systems thinking: What has emerged that has changed the situation? What feedback loops are you using to solve the problem? What will be the causes and effects of your new direction to all your stakeholders?
It all boils down to your shared value proposition. Is it relevant? Does it consider your appropriate market orientation? Does it factor in customers? What about the workforce? Today, generational influences also play into any value proposition. It is easy to land on a solution for a problem that may represent an older demographic mentality and not the next-gen’s outlook, values, and skills. As we have said many times, next gens want a seat at your table, and if you don’t give them one, they’ll sit down anyway.
We have worked with organizations of all sizes to help them take the three steps as a method to create a framework to define a market orientation, revealed by data and analytics, resulting in an evolved value proposition, supported by a shared purpose – all glued together by systems thinking. The past may be prelude to the future, but it certainly is not the playbook for the present. If your organization is stuck in the past, try shifting into systems thinking and reinvent your model and your future.
Get “The Truth about Transformation”
The 2040 construct to change and transformation. What’s the biggest reason organizations fail? They don’t honor, respect, and acknowledge the human factor. We have compiled a playbook for organizations of all sizes to consider all the elements that comprise change and we have included some provocative case studies that illustrate how transformation can quickly derail.
