A New Wave to Management Thinking

The world around us is comprised of systems – organizational systems, business systems, political systems, family systems, inter-personal systems, biological systems, economic systems – and thus the list continues. It has been said that systems thinking is one of the key management competences of the 21st century. As our work becomes ever more tightly interwoven globally and as the pace of change continues to increase, we will all need to become increasingly “system-wise.”

But what exactly is a system? Most importantly, how can we manage our organizations more sustainably by understanding systems?

Elements and Interconnections

Elements and Interconnections

So, what is this system? It is a set – of things, people, clouds, molecules, or whatever – interconnected in such a way that they produce their own pattern of behavior over time. The system may be buffered, constricted, triggered, and driven by outside forces. But the system’s response to these forces is characteristic in itself, and is seldom simple in the real world. Thus, a system is not just any old collection of things but an interconnected set of elements that is currently organized in a way that achieves something. A system must consist of three kinds of things: elements, interconnections, and a function or purpose.

Key to understanding any system is to knowing its function or purpose either as a separate entity or in relation to a larger system of which it is a part. However, natural and social systems can be far more difficult to understand than non-living systems, because we can never know for sure, what the purpose or design is. As a result of this inability to truly know the purpose and design, we tend to take action in the systems without really understanding the impact of our action on the system. Here, Systems Thinking can be of help. According to Peter Senge,

“Systems Thinking is a way of thinking about, and a language for describing and understanding, the forces and interrelationships that shape the behavior of systems. This discipline helps us to see how to change systems more effectively, and to act more in tune with the natural processes of the natural and economic world.”

Earth: A global system

A global system

Once you graduate to true Systems Thinking, you see system behavior as the result of its feedback loops. Feedback loops are everywhere. However, most people (probably over 95%) are event oriented. They see the world as a rag tag collection of parts and events. Each event has a cause and if you want to solve a problem, you have to find its cause and fix that. Applying this mind set to the global environmental sustainability problem, people’s misbehavior can be seen as the cause of the problem.

Systems Thinkers, on the other hand, see the problem entirely differently. They see immense positive feedback loops causing swarms of agents to exploit the Earth for their own benefit and population growth. This mode becomes unsustainable when negative feedback loops finally start to push back as environmental limits are approached. They do not see people’s misbehavior as the core problem. Instead, they see the structure of the system causing that misbehavior. To solve the problem, the system structure has to be understood and changed, so that feedback loops can be redesigned to cause people to behave more sustainably as a natural part of their everyday existence.

If you would like to become a Systems Thinker novice, start with the book “The Fifth Discipline: The Art and Practice of the Learning Organization,” by Peter Senge or the book “Thinking in Systems: A Primer,” by Donella H. Meadows. Both books will shift your mind with an excellent introduction to systems thinking. And then, if you really want to get serious and become an expert, try John Sterman’s “Business Dynamics: Systems Thinking and Modeling for a Complex World” or the book “Systems and Models: Complexity, Dynamics, Evolution, Sustainability,” by Hartmut Bossel.

I believe that Systems Thinking is one of the key management competencies of the 21st century and the crucial discipline of organizational development and learning for sustainability. It offers you additional perspectives, language, and tools which will dramatically strengthen your ability to grasp complexity and help you to design a flourishing organization.

Enjoy reading and, as always, I am looking forward to receiving your feedback

This post was originally published on http://kutzschenbach.eu/a-new-wave-to-management-thinking.

3 thoughts on “A New Wave to Management Thinking”

  1. I completely agree regarding the systems thinking perspective. The only thing I would add is ‘outside-in’ systems thinking, working from the customer back to create a coherent organisational system to create and deliver relevant value , and at the right speed and frequency to be persistently relevant to customers, so that relationships endure and the firm becomes sustainable. I refer to this as being customer-adaptive.

    Thanks Michael


  2. Good stuff around System thinking but nothing new. I would have preferred how System thinking can enable BT specifically within the framework ENVISION, ENGAGE, TRANSFORM, and OPTIMIZE .

  3. Dear Pino,
    Thank you for your feedback. Are you interested in collaborating on the topic of Systems Thinking and Business Transformation?

    Kind regards,

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