Principles of Systems Thinking Course Notes PDF

Principles of Systems Thinking Compiled by: Domingo, Iluminada Vivien R. Moñeza, Teresita G. Page 1 of 154 Course Code : INTE20049 Course Title : Principles of Systems Thinking Course Description : structure - often for the purpose of changing structure so as to improve performance. The final project of the course is the evaluation of a business system available in specific business category industries. Course Objectives: At the end of the semester, students must be able to: 1. Understand and appreciate the meaning of systems thinking in electronic business processes. 2. Be guided in their consideration of the business systems available among business companies. 3. Appreciate the uniqueness and nuances of implementing business systems processes on the web. 4. Be familiar with the infrastructure and technologies affecting the efficiency and effectiveness of systems on the web. 5. Be aware of the different management and technical issues in the development and implementation of a business systems. 6. Develop teamwork and cooperation among students in the evaluation of specific business systems. 7. Be aware of personal values as they affect their business objectives. 8. Evaluate an existing business system. TABLE OF CONTENTS: Page/s Chapter 1: Introduction 1.1 What are Systems: Identifying Systems 1.2 Reflecting System Characteristics 1.3 The Five Basic Disciplines of the Learning Organization Personal Mastery Mental Models Shared Vision Team Learning Systems Thinking Page 2 of 154 1.4 Understanding System Feedback 1.5 System Evaluation: Case Problems 1.6 Characteristics of simple and complex systems Chapter 2. System Thinking as a special Language 2.1 What is Systems Thinking: Principles of systems thinking: Stretching the timeline 2.2 Systems Thinking as a special language: The Shape of the Problem 2.3 Is Time on your side? 2.4 From short term to long term 2.5 In the midst of a problem 2.6 Systems Problem identification 2.7 Solving issues of business systems Case Analysis of Selected Business Systems Chapter 3: Systems Thinking as a Special Language 3.1 Uncovering Systemic Structures: Drawing Behavior over Time Graphs Identifying the problem: The problem with price promotions 3.2 Identifying the Variables: The case of energy drain 3.3 Drawing behavior over time graphs: The case of audio – electronic roller coaster 3.4 The what, why, when, where, and how of Systems Thinking 3.5 The Eleven (11) Laws of Systems Thinking Chapter 4: Guides to Systems Thinking 4.1 The Building Blocks of Systems Thinking 4.2 Uncovering Systemic Structures Building Causal Loop Diagrams: Anatomy of Causal Loop Diagram: The case of plateauing profits 4.3 Building a causal loop diagram: The case of collapsing banks 4.4 About multi loop diagrams: The “organic to go” story The case of the restricted revenues. More Case Problems: The All for one cooperative The Problem with used Cds Chapter 5: Designing Systemic Interventions 5.1 Characteristics of complex systems 5.2 The strengths and weaknesses of complex systems 5.3 System Archetypes as Structural Pattern Templates Chapter 6: Value Creation and Business Success 6.1 The Dos and Don’ts of systems thinking on the Job 6.2 Practicing Life-Long Systems Thinking: Palette of System Thinking tools 6.3 The Learning Journey: System Archetypes Appendices: Appendix A: Additional Learning Activities Appendix B: Learning Activity Key Points And Suggested Responses Appendix C: A Palette of Systems Thinking Tools Appendix D: The Systems Archetypes Appendix E: Additional References Page 3 of 154 Required Readings : 1. Systems Thinking Basics, Virginia Anderson and Lauren Johnson, eBook published by Pegasus Communication Inc. 1997. 2. Introduction to Systems Thinking, Antonio Perez, Asian Institute of Management, 2012 3. Systems Thinking for Social Change by Peter Stroh, 2015 4. Systems Thinking Made Simple by Dereck Cabrera, 2014 Course Requirements : 1. Lecture/Classroom discussion 2. Assignment/Seat works 3. Chapter presentations Evaluation Techniques : 1. Lectures/Class Discussion 2. Presentations 3. Quizzes 4. Case Analysis 5. Evaluation Examination 6. The course will have no final written exam and will be 100% based on the following continuing assessment components: Course Grading System : MidTerm FinalTerm Class Standing 70% Class Standing 70% Quizzes Quizzes Class Recitation Class Recitation Seatworks Seatworks Case Studies Case Studies Assignment Assignment Major Examination 30% Business Plan Presentation 30% FINAL GRADE = (MidTerm + Final Term) /2 Suggested Teaching Methodologies/Strategies : 1. Group Dynamics Page 4 of 154 2. Lecture/Class Discussion 3. Class Presentation se Samples/Analysis 4. Film Showing Required Readings : 5. Systems Thinking Basics, Virginia Anderson and Lauren Johnson, eBook published by Pegasus Communication Inc. 1997. 6. Introduction to Systems Thinking, Antonio Perez, Asian Institute of Management, 2012 7. Systems Thinking Case Problems via google search 8. Systems Thinking You Tube videos Class Policies: Aside from what is prescribed in the student handbook, the following are the professor’s additional house rules: 1. No make-up quizzes shall be given for missed quizzes, regardless of circumstances, unless extremely meritorious, to be determined on a case-to-case basis, upon the sole discretion of the course facilitator. Per College Policy, students who failed to take their midterm and/or final examination(s) on the scheduled date(s) may be given make-up examinations. The lesson coverage of said make-up examinations shall be the same as that of the regularly scheduled examination, but the make-up examination questions are designed to be more difficult and challenging. All make-up examinations must be taken no later than the prescribed deadline specified by the College. 2. All assignments, projects and other requirements must be submitted on the specified date provided by the course facilitator. Late submission of course requirements shall merit a corresponding deduction in points. The course facilitator reserves the right to determine the acceptability of reason(s) presented by the student. 3. Plagiarism is highly prohibited. 4. Cellphones must be on a silent mode or turned off inside classroom. 5. Student should seek permission from the professor before going out of the classroom. Observe classroom cleanliness and orderliness. Make sure that the classroom is clean every start and end of the class. Page 5 of 154 Page 6 of 154 CHAPTER 1 What Are Systems? elcome to the world of systems and systems thinking! W You may be asking yourself, why is it important to explore systems? One reason is that we live in and are influenced by systems all around us, from the natural environment to healthcare, education, government, and family and organizational life. Understanding how these systems work lets us function more effectively and proactively within them. The more we build our understanding of system behavior, the more we can anticipate that behavior and work with the system to shape the quality of our lives. This chapter introduces you to the idea of systems and what makes them unique. In the learning activities at the end of the section, you will have the opportunity to identify some major systems in your own work life and to think about typical system behavior. At the end of the chapter, the students would be able to: 1. Internalize the processes of a system into day-to-day activities. 2. Identify principles of business information systems Page 2 of 140 3. Recognize and enhance traits and skills in reflecting system characteristics. 4. Identify and suggest system ideas for viable business systems. CONTENTS: Chapter 1: Introduction 1.1 What are Systems: Identifying Systems 1.2 Reflecting System Characteristics 1.3 The Five Basic Disciplines of the Learning Organization Personal Mastery Mental Models Shared Vision Team Learning Systems Thinking 1.4 Understanding System Feedback 1.5 System Evaluation: Case Problems 1.6 Characteristics of simple and complex systems WHAT IS A SYSTEM? A system is a group of interacting, interrelated, or interdependent components that form a complex and unified whole. A system’s components can be physical objects that you can touch, such as the various parts that make up a car. The components can also be intangible, such as processes; relationships; company policies; information flows; interpersonal interactions; and internal states of mind such as feelings, values, and beliefs. In an organizational setting, for example, the R&D group is a system made up of people, equipment, and processes that create new products to be manufactured by the production system and sold by the sales system. The components of the R&D group have to interact with one another to perform their function and thus are interdependent. In turn, the R&D group interacts and is interdependent with other systems within the company. A system such as the R&D group always has a specific purpose in relation to an even larger system—in this case, the entire organization (Figure 1.1, “Interdependent Systems Within Interdependent Systems”). FIGURE 1.1 Interdependent Systems Within Interdependent Systems Sales C p y R&D People Page 3 of 140 Your body is another example. Within it, your circulatory system delivers oxygen, nutrients, hormones, and antibodies produced by other systems and carries waste to the excretory system. The circulatory system is made up of the heart, veins and arteries, blood, and a host of supporting elements. All of these components interact to carry out their purpose within the larger system—your entire body. Both of these examples raise an intriguing point about systems: We can think of all systems as nodes embedded in a giant network in which every- thing is connected. For example, the company described above, with its interdependent R&D, production, and sales systems, is itself a large system that is interdependent with an even larger system—industry as a whole. And industry is interdependent with an even larger system—the economy—and so on. The more we widen our view in this way, the more we see that everything—from the tiniest subatomic particle to the universe (and maybe beyond!)—is intertwined. We can also distinguish between natural systems and human-made, nonliving systems. Natural systems— a living being’s body, human societies, an ecosystem such as a prairie—have an enormous number and complexity of components and interactions among those components. They also have virtually an infinite number of connections to all the systems around them. Human-made systems—cars, for example—can also be quite complex, but these nonliving systems are not as intricately linked to systems around them. If a car breaks down, the impact of this event is not nearly as far- reaching as if a species were removed from a prairie ecosystem (although you may disagree if it’s your car that breaks down!). Put another way, human-made nonliving systems are more self- contained than natural systems, which we can think of as more open in their connections to sur- rounding systems. Defining Characteristics of Systems” Systems have several essential characteristics: 1. A system’s parts must all be present for the system to carry out its purpose optimally. If you can take components away from something without affecting its functioning and its relationships, then you have just a collection, not a system. For example, if you remove a cashew from a bowl of mixed nuts, you have fewer nuts, but you have not changed the nature of the collection of components. Therefore, a bowl of mixed nuts is not a system. Similarly, if you can add components to a collection without affecting its functioning and relationships, it’s still just a collection. So, if you add pistachios to your bowl of mixed nuts, you have more nuts and you have a different mix, but you still have just a collection of nuts. However, if you assign new tasks to an R&D group or redefine the job descriptions of its staff, you will likely change the group’s functioning and relationships—whether for the better or worse. The R&D group is not just an assortment of people, equipment, and processes; it is a system. 2. A system’s parts must be arranged in a specific way for the system to carry out its purpose. If the components of a collection can be combined in any random order, then they do not make up a system. For example, in a bowl of fruit, the oranges can go at the bottom, in the middle, or on the top without changing the essential nature of the collection of fruit. Page 4 of 154 However, in a system such as a company, imagine what would happen if the parts shifted around randomly—if, for instance, the accounting specialists suddenly decided to work on the production line, and the production specialists decided to write marketing copy. Of course, people do change jobs within their companies, but only after training and much transition time. Most companies function best when people are working in jobs that match their skills and experience, and when the staff is organized according to a specific plan. 3. Systems have specific purposes within larger systems. All systems have a specific purpose in relationship to the larger system in which they’re embedded, as we saw in the examples of the R&D department and human circulatory system above. Because each system has its own purpose, each is a discrete entity and has a kind of integrity that holds it together. In other words, you can’t force two or more systems together and get a new, single, larger system. Nor can you subdivide a system and automatically end up with two smaller identical, functioning systems. As the saying goes, if you divide an elephant in half, you don’t end up with two smaller elephants. And if you put two small elephants together, you don’t have a new, single, larger elephant (although some day you may end up with a new system—known as a herd!). 4. Systems maintain their stability through fluctuations and adjustments. Left to themselves, systems seek to maintain their stability. Your organization does its best to maintain a designated profit margin just as most human bodies work to maintain a temperature of about 98.6 degrees Fahrenheit. If you examined your organization’s revenues against expenditures every week or graphed your body temperature every five minutes, you would probably draw a wobbly, fluctuating line that nevertheless holds steady overall. Margins appear and disappear as a company pays its suppliers and collects checks from customers. Your body temperature rises and falls depending on your mood and your level of physical exertion. On aver- age, however, your body temperature remains stable. And, with reasonable management and no cataclysmic change, your organization’s margin also remains stable overall. Systems achieve this stability through the interactions, feedback, and adjustments that continually circulate among the system parts, and between the system and its environment. Let’s say a corporation receives an unusually large stack of suppliers’ invoices (external stimuli) in the mail. The accounts payable department responds by paying the bills. As the checks go out the door, the accounting department, alarmed, compares revenue versus expenditures and gives feedback to management: Expenditures are up and revenues aren’t covering them. Management then adjusts the system by reminding key customers to pay overdue invoices. Similarly, if you go for a run, your exertion warms your body. The sensation of heat is fed back to your sweat glands, which begin to work. Over time, sweating readjusts your temperature back to the norm. 5. Systems have feedback. Feedback is the transmission and return of information. For example, imagine that you are steering your car into a curve. If you turn too sharply, you receive visual cues and internal sensations that inform you that you are turning too much. You then adjust correct the degree of your turn. The most important feature of feedback is that it provides the catalyst for a change in behavior. A system has feedback within itself. But because all systems are part of larger systems, a system also has feedback between itself and external systems. In some systems, the feedback and adjustment processes happen so Page 5 of 154 quickly that it is relatively easy for an observer to follow. In other systems, it may take a long time before the feedback is returned, so an observer would have trouble identifying the action that prompted the feedback. For example, if you sunbathed a lot in your teens, you may develop skin problems after age 40— but because so much time passed between the two events, you may not recognize the connection between them. Finally, feedback is not necessarily transmitted and returned through the same system component—or even through the same system. It may travel through several intervening components within the system first, or return from an external system, before finally arriving again at the component where it started. For instance, imagine that the company you work for is suffering financially and decides to lay off 20 percent of the work force. That quarter, the layoff does indeed improve the looks of the financial bottom line. On this basis, the upper management might decide that layoffs are a reliable way to improve the financial picture. However, let’s say you survived the layoff; how would you describe your state of mind and that of your other remaining colleagues? Besides cutting costs, layoffs are also famous for damaging morale and driving people to “jump ship” in search of more secure waters. Eventually, as low morale persists, you and your colleagues might start coming to work late and leaving early and caring less and less about the quality of your work. Productivity could drop. In addition, everyone who leaves—whether voluntarily or by being laid off—takes valuable skills and experience with them, so the over- all capability of the work force goes down, further hurting productivity. Lowered productivity leads to expensive mistakes and lost sales from dis- gruntled customers. All these eats away even more at the company’s revenue, tempting management to think about having even more layoffs to cut costs. In this example, the feedback that made layoffs look like good policy was returned quickly—probably within one quarter. The feedback about the long-term costs of layoffs went through more steps and took a lot longer to return. Yet this information was essential for the management team to see the full impact of their decisions. EVENTS, PATTERNS, STRUCTURE In reading all this information, you may be wondering what actually gives rise to systems. Systems are built on structures that leave evidence of their presence, like fingerprints or tire marks, even if you can’t see them. But what is structure, exactly? The concept is difficult to describe. In simplest terms, structure is the overall way in which the system components are interrelated—the organization of a system. Because structure is defined by the interrelationships of a system’s parts, and not the parts themselves, structure is invisible. (As we’ll see later, however, there are ways to draw our understanding of a system’s structure.) Why is it important to understand a system’s structure? Because it’s system structure that gives rise to— that explains—all the events and trends that we see happening in the world around us. Perhaps the best way to grasp the role of structure is to explore the Events / Patterns / Structure pyramid, shown in Figure 1.2. Events We live in an event-focused society (Figure 1.3, “The Tip of the Pyramid”). A fire breaks out in the neighborhood; a project misses a deadline; a machine breaks down. We tend to focus on events rather than think about their causes or how they fit into a larger pattern. This isn’t surprising; in our evolutionary development as a species, this ability to respond to immediate events ensured our very survival. Page 6 of 154 But focusing on events is like wearing blinders: You can only react to each new event rather than anticipate and shape them. What’s more, solutions designed at the event level tend to be short lived. Most important, they do nothing to alter the fundamental structure that caused that event. For example, if a building is burning, you would want local firefighters to react by putting out the fire. This is a necessary and essential action. How- ever, if it is the only action ever taken, it is inadequate from a systems thinking perspective. Why? Because it has solved the immediate problem but hasn’t changed the underlying structure that caused the fire, such as inadequate building codes, lack of sprinkler systems, and so on. By uncovering the elusive systemic structure that drives events, you can begin identifying higher-leverage actions. The next step to comprehending systemic structure is to move from thinking at the event level to thinking at the pattern level. Patterns Whereas events are like a snapshot, a picture of a single moment in time, patterns let us understand reality at a deeper level (Figure 1.4, “Moving from Events to Patterns”). Patterns are trends, or changes in events over time. Whenever you see a pattern of events—for example, sales have been declining over the past few years, or two-thirds of the department’s projects have gone over budget in the last year, or several senior engineers have left the company recently, most of them in the last six months—you’re getting one step closer to grasping the systemic structure driving that pattern. FIGURE 1.2 FIGURE 1.3 FIGURE 1.4 The Events / Patterns / Structure Pyramid The Tip of the Pyramid Moving from Events to Patterns Events Page 7 of 154 In each of the above examples, you could draw a simple graph to represent the trend (Figure 1.5, “Graphs of Patterns”). What is the advantage of thinking at the pattern level, as opposed to the event level? Detecting a pattern helps you put the most recent event in the context of other, similar events. The spotlight is then taken off the specific event, and you can focus on exploring how the series of events are related and begin thinking about what caused them. In the end, to anticipate events and ultimately change a pattern, you need to shift your thinking one more time: to the level of structure (Figure 1.6, “The Complete Pyramid”). FIGUR E 1. 6 The Complete Pyramid Structure To move to this deeper level of understanding, let’s reconsider the above example of the senior engineers’ exodus. You might begin digging for the structure behind this pattern by asking, “What’s causing more and more senior engineers to leave?” In this case, suppose a change in corporate pol- icy has cut both the budget and the number of administrative assistants for the engineering group. The engineers’ workloads have ballooned, and they’ve begun grumbling more and more about their job pressure. Worse yet, as some of them leave, those left behind get even more upset as their workloads expand further. It’s a vicious cycle that you might sketch as shown in Figure 1.7, “The Engineering Exodus,” p. 8. Page of 140 7 FIGURE 1.7 The Engineering Exodus Whenever we ask questions like, “Why is this pattern happening?” or “What’s causing these events?” we are probing at structure. Thinking at the structural level means thinking in terms of causal connections. It is the structural level that holds the key to lasting, high-leverage change. Let’s return to our example about a house catching fire, to see how this works. To fight fires at the event level, you would simply react to quell the fire as soon as possible after it broke out. You would probably then repair any smoke and water damage and put the incident out of your mind. How would you fight fires at the pattern level? You would begin anticipating where. other fires are most likely to occur. You may notice that certain neighborhoods seem to suffer more fires than others. You might locate more fire stations in those areas, and staff them based on past patterns of usage. By doing these things, you would be able to fight fires more effectively by adapting to the patterns you have observed. However, your actions haven’t done anything to reduce the actual occurrence of fires. To address the problem at this level, you need to think about the structure that gives rise to the pattern of fires. At the systemic structure level, you would ask questions like, “Are smoke detectors being used? What kinds of building materials are least flammable? What safety features reduce fatalities?” Actions that you take at this deep level can actually cut down the number and severity of fires. Establishing fire codes with requirements such as automatic sprinkler systems, fire-proof materials, fire walls, and fire alarm systems saves lives by preventing or containing fires. Here’s where the real power of structural-level thinking comes in: Actions taken at this. Page of 140 level are creative, because they help you to shape a different future, the future that you want. Does this mean that high-leverage actions can be found only at the structural level? No—leverage is a relative concept, not an absolute. Our ability to influence the future increases as we move from event level to pattern-level to structural-level thinking, but sometimes the best action we can take must remain focused on the present, at the event level—for example, when a building is aflame, the highest leverage action in the moment is to react by putting out the fire. Any other action would be downright inappropriate. But, if that’s all we did, the actions would be considered low leverage from a long-term perspective. The art of thinking at the systemic structure level comes with knowing when to address a problem at the event, pattern, or structural level, and when to use an approach that combines the three. Figure 1.8, “Levels of Understanding,” depicts the richness of these three levels of understanding. FIGURE 1.8 Levels of Understanding Action Time Way of Questions You Mode Orientation Perceiving Would Ask “What’s the fastest React! Present Witness event Events way to react to this event now?” Patterns Measure or track “What kinds of Adapt! patterns of events trends or patterns of events seem to be recurring?” Create Future Causal loop “What structures are in Change! diagrams and place that are causing other systems these patterns?” thinking tools The Five Basic Disciplines of the Learning Organization Mental Models Personal Mastery Shared Vision Team Learning Systems Thinking Peter Senge’s Fifth Discipline precepts boil down to these assertions that people should put aside their old ways of thinking (mental models), learn to be open with others (personal mastery), understand how their company really works (systems thinking), form a plan everyone can agree on (shared vision), and then work together to achieve that vision (team learning). Let us describe each discipline. 1. Mental Models “Mental models” are deeply ingrained assumptions, generalizations, or even pictures or images that influence how we understand the world and how we take action … The discipline of working with mental models starts with turning the mirror inward, learning to unearth our internal pictures of the world, to bring them to the surface and hold them rigorously to scrutiny. It also includes the ability to carry on “meaningful” conversations that balance inquiry and advocacy, where people expose their own thinking effectively and make that thinking open to the influence of others. 2. Personal Mastery “Personal mastery is the discipline of continually clarifying and deepening our [the members of the organization’s] personal vision, of focusing our energies, of developing patience, and of seeing reality objectively.” 3. Shared Vision The practice of shared vision involves the skills of unearthing shared “pictures of the future” that foster genuine commitment and enrollment rather than compliance. 4. Team Learning The discipline of team learning starts with “dialogue,” the capacity of members of a team to suspend assumptions and enter into a genuine “thinking together.” The discipline of dialogue also involves learning how to recognize the patterns of interaction in teams that undermine learning. The patterns of defensiveness are often deeply engrained in how a team operates. If unrecognized, they undermine learning. If recognized and surfaced creatively, they can actually accelerate learning. 5. Systems Thinking Senge (1994) describes systems thinking as a “discipline that involves approaching problem solving and addressing issues, not by focusing on isolated events or parts of the whole but rather by looking at the patterns and Page 11 of 154 events as interrelated parts that effect and are affected by each other and that collectively make up a unified and inseparable whole.” https://leadtogether.org/tag/principles-of-learnign-organization/ A School as a Living Entity by Rea Gill To build an organization that can truly learn, that can continually expand its capacity to create its future, we/you need to master these five disciplines. Table 1. The Five Discipline of the Learning Organization DISCIPLINE What it means? What you need to do? Deeply ingrained assumptions that Bring assumptions to the surface and Mental influence actions question them. Develop alternative Models assumptions. The continuous personal growth Be a model. Commit yourself to your Personal Mastery and learning of individuals in the own personal mastery. organization A common aspiration among Encourages people to have their own Shared people in the organization personal visions and to share them. Vision Developing extraordinary Master the practices of dialogue and Team capacities for coordinated action. discussion among team members Learning A framework for seeing the See wholes instead of parts. See the Systems interrelationships rather than forest and the trees. Thinking things. 1.2. Principles of systems thinking (Concepts & Laws) Systems thinking is a discipline used to understand systems to provide a desired effect; the system for thinking about systems. It provides methods for “seeing wholes and a framework for seeing interrelationships rather than things, for seeing patterns of change rather than static snapshots.” The intent is to increase understanding and determine the point of “highest leverage”, the places in the system where a small change can make a big impact. According to Kinshau Rogers, there are six foundational principles that drive systems thinking methods, such as: 1. Wholeness and Interaction. The whole is greater than the sum of its parts (the property of the whole, not the property of the parts, The product of interactions, not the sum of actions of the parts) 2. Openness. Living systems can only be understood in the context of its environment. 3. Patterns. To identify uniformity or similarity that exists in multiple entities or at multiple times. Page 12 of 154 4. Purposefulness. What you know about how they do what they do leads to understanding WHY they do what they do. 5. Multidimensionality. To see complementary relations in opposing tendencies and to create feasible wholes with infeasible parts. 6. Counterintuitive. That actions intended to produce a desired outcome may generate opposite result. 1.3. The Systems Thinking View of Simple, Complicated, Chaotic, and Complex https://portal.netobjectives.com/pages/flex/systems-thinking-view-of-simple-complicated-chaotic-complex/. Understanding the challenges present in changing behavior is important. There are many models about complexity in the world of software development and what that means. simple, complicated, chaos and complex events. While discussed by many, some of these discussions ignore three salient points: The relationships are often not inherently the way they are but are that way because of limited understanding. Chaos is a result. We should be discussing ‘chaotic events.’ All of this needs to be taken from a system thinking point of view. Some quick definitions There are different types of relationships between different entities. These relationships are more or less easy to understand. The behaviors between the entities also change based on these relationships. While it is not really possible to define a relationship as specifically this or that, it is possible to define aspects of these relationships. We will use the following definitions: Simple means there is a well-defined relationship between an event and the resulting action from that. Dropping a pen and seeing that it will fall is a simple relationship. Or, if one wants more accuracy, there may be other factors (such as wind velocity) taking it out of the simple domain. Doing this in space may be a more complicated relationship. Hence, relationships may be simple but not in all contexts. Chaos is a result, not an event. Its definition is “complete disorder and confusion” as in “snow caused chaos in the region.” It can result from behavior so unpredictable as to appear random, owing to great sensitivity to small changes in conditions.” Chaotic event is an event that is unpredictable even if there is an underlying science. The “straw that broke the camel’s back” and the “butterfly effect” where a butterfly flapping it’s wings in Asia can theoretically cause a typhoon on the west coast of the US. These are often called “non-linear” events since a small change may cause a large change. Complicated systems are when there are several well-defined relationships between cause and effect. If all of these relationships are known then we can predict the outcome of the actions. Launching a rocket is an example of complicated. Page 13 of 154 Complexity means that the exact relationships between things are neither known and possibly unknowable. Complexity does not mean general predictions can’t be made, but that exact predictions cannot. For example, weather is complex, but there are patterns to weather we can learn. Raising a child is a complex endeavor. Difference between inherent nature and what we understand. Many things that appear complex in the past were really just events for which we had no understanding. For example of what appeared to be complex, was solved by someone, but couldn’t get it adopted because of the lack of understanding. Taking a Systems Thinking point of view Systems Thinking provides us with two main tenets: 1. We must recognize that all of the parts of a system are interrelated and that changing part of the system affects it all. Furthermore, the system is not the sum of the whole but exhibits its own behavior. Please read "What if Russ Ackoff Gave a TED talk." 2. The system affects the behavior of the people in it in a very significant manner. What this means is that a system likely exhibits all 4 types of events: simple, complicated, chaotic, and complex. And definitely all four if people are present in it as people’s behavior is complex. Please read: “ People Are Complex, Software Development Isn’t." How to manage chaos and complexity Chaos from chaotic events and complexity While chaotic events and behavior of complex systems, by their very definition, can’t be predicted, they can be controlled. In the case of business development where a goal is intended, feedback is essential. This enables the unplanned for actions that occur, such as misunderstandings and creating errors, to be attended too quickly. The negative impact of these unplanned actions can thereby be mitigated. Reducing delays between the incident and its mitigation is critical. Particularly in knowledge work and software development where a delay in detecting an error can cause a great amount of additional unplanned work. This is the driving force for quick feedback. We can always introduce errors into our system. If we can find them quickly, we can eliminate most of the impact of the error. Chaos from simple and complicated systems Chaos can result from simple and complicated systems as well. When systems are overloaded, that is, they have more work in process (WIP) than they should, this will introduce delays in workflow, feedback and using information. This alone will cause problems (new unplanned work) as well as exacerbate any challenges from the chaotic and complexity described above. Managing WIP is therefore very important. Two related articles are: Manage Work-in-Process Controlling Work-in-Process Page 14 of 154 Predictability vs. repeatability in complex systems There is a difference between predictability and repeatability. But before discussing those, let’s look at two types of predictability – micro and macro. Micro-predictability refers to a particular event while macro-predictability refers to the result over time. Consider that one can’t accurately predict the result of a coin flip but can predict that over time a fair coin will come up heads as often as tails. If the coin isn’t fair, it’d be a good bet that the results of the second thousand flips will match the results of the first thousand flips – hence macro-predictability. While complex systems are inherently unpredictable, it is possible to constrain them so as to increase predictability of an aspect of the system. This can result in repeatable results. For example, automated testing and lowering technical debt can greatly increase the predictability of changing code. Repeatability of results in complex systems requires: explicit workflow full visibility of work managing work-in-process alignment across the value stream attending to feedback It is important to understand that achieving repeatability is one thing and maintaining it is another. It is easy to fall back into past habits before predictability was achieved. This is why management and teams must work together with regular retrospectives to ensure the continued predictability. As understandings change so must systems. These retrospectives must be geared toward continued improvement – systems are either improving or decaying, there is no stasis. It is also important to remember that achieving repeatability does not mean the system is predictable when new changes are attempted. Complex systems by their nature are not predictable. We can work with them, but when people are involved, complexity will always be present. When a transition to new methods is attempted, the actions being attempted become part of the system. This is why one should consider the effect of following a particular approach will have on your organization. That is, include people’s reaction to Scrum, Kanban, Kanban Method, SAFe, FLEX, DAD, LeSS, etc. The method you are using becomes part of your system. This should be accounted for in the design of your approach. Many approaches take a different attitude about how they will/should affect the system. For example, Scrum suggests that impediments to doing Scrum should be removed. This works in some contexts, but not so well in others. Lean suggests taking a systems thinking point of view so that any adjustments to your workflow must consider the value streams being affected. Page 15 of 154 These activities can be done either by yourself or with a group. For self-study, you might consider starting a systems thinking journal, and doing the following learning activities over the course of a week or two. However, you approach them, take plenty of time to think about each activity. Be honest, too. No one else will see your notes or your journal! If you are helping a group to do the activities, have them read and think about the material ahead of the meeting time. Then go over it when you meet, answering questions and looking for additional examples to help illustrate key points. D E N T I F Y I N G SY STE M S ACTIVITY 1 Purpose: To identify systems and their components To recognize interrelated systems Outcome: Recognition of systems within your organization, their interrelationships, and their purposes Insights about intangible and possibly powerful components of systems that affect what hap- pens in your organization. Instructions: Identify three systems in your organization, including at least one that includes some important but intangible components. Example  Informal information system Purpose: To supplement the “official” information system so people feel they can make more informed decisions. The informal system may also help defuse tension by offering an avenue for chatting or gossiping. Components: People, the electronic mail system Intangible components: Information or “gossip,” time to communicate, motivation to share information. Larger system: The overall information system, which also has a formal communication system 1. List your three systems below: 2. In the spaces provided below, fill in the following information: The name of your system The purpose that your system fulfills within the larger system. The components that make up your system The intangible components of your system The larger system of which your system is a part. Your First System: Purpose: Components: Page 16 of 154 Intangible components: Larger system: Your Second System: Purpose: Components: Page 17 of 154 Intangible components: Larger system: Purpose: Components: Intangible components: Larger system: Page 18 of 154 ACTIVITY 2 R E F L E C T I N G O N SY STE M C HA R A C T E R I S T I C S Purpose: To think about the behavior of the systems you see around you To identify patterns of behavior over time, and think about what causes that behavior. Outcome: Simple graphs of observed behavior patterns Awareness of the forces that drive behavior patterns. Instructions: Write your answers to the following questions in the space provided. QUESTIONS 1. Identify a chronic problem or ongoing issue that you wrestle with at work (for example, “Sales do well for a while, then drop, then pick up again”; or “Every year more and more people get laid off”). 2. Try drawing a graph of what seems to be happening. (Tip: Ask yourself, Is the pattern going up? Going down? Oscillating over time? Going up or down and then leveling off?) 3. Looking at your graph, what do you see? 4. Is there any way that actions taken to solve the problem might actually be making things worse? If so, how? U N D E R S T A N DI N G SY STE M F E E D B A C K ACTIVITY 3 Purpose: To begin using simple diagrams to show how components of a system are related and how feedback is returned through the system. Outcome: Diagrams of the three systems you identified in Activity 1 Instructions: For each system you identified in Activity 1, draw a map or diagram of how the parts are related and how one part gives feedback to another. You may find there are many or only a few feedback connection. You may also find that some feedback travels through multiple steps before arriving back at its original source. Example  Figure 1.9, “The Informal Information System,” shows the system discussed in Activity 1. FIGURE 1.9 The Informal Information System In this diagram, the dotted arrows represent feedback. The number of people who want to share information, the amount of information to share, and the amount of time available are all related to the level of information sharing. The amount of information sharing or its value to people can determine how much interest everyone has in using the electronic mail system to share information. This level of interest then influences how many people share information and how much time they spend doing it. Page 19 of 154 Now try diagramming your three systems: Your First System: Your Second System: Your Third System: Finally, try trading diagrams with someone else. Take turns explaining the diagrams and your understanding of the systems you drew. References: 1. https://us02web.zoom.us/j/82206269624?pwd=WHNPRjN4YUhtbXhOZ0dSV3RiWDEvdz09 2. https://bigthinking.io/6-principles-of-systems-thinking/ Kishau Rogers Page 20 of 154 Chapter 2 What Is Systems Thinking? T Page 21 of 154 here are many ways of looking at systems thinking. It offers not only a set of tools, but also a framework for looking at issues as systemic wholes. For some people, it can even become a way of life! Systems thinking is a language, too, that offers a way to communicate about dynamic complexities and interdependencies. Most Western languages are linear— their basic sentence construction, noun-verb-noun, encourages a worldview of “x causes y.” Because of this, we tend to focus on linear causal relationships rather than circular or mutually causative ones. Yet many of the most vexing problems confronting managers and corporations today are caused by a web of interconnected, circular relationships. To enhance our understanding and communication of such problems, we need a language and a set of tools better suited to the task. This is where systems thinking comes in. In this chapter, we examine the foundational principles of systems thinking in more detail and explore the special qualities of systems thinking as a language. The learning activities at the end of the section will let you begin actually practicing systems thinking. At the end of the chapter, the students would be able to: 1. Enumerate and relate principles of systems thinking to daily business activities. 2. Integrate principles of systems thinking to business processes 3. Recognize and issues and concerns in business problems. 4. 4. Identify and suggest system ideas for viable business systems. Chapter 2. System Thinking as a special Language. 2.1 What is Systems Thinking: Principles of systems thinking: Stretching the timeline. 2.2 Systems Thinking as a special language: The Shape of the Problem 2.3 Is Time on your side? 2.4 From short term to long term 2.5 In the midst of a problem 2.6 Systems Problem identification 2.7 Solving issues of business systems Case Analysis of Selected Business Systems THE PRINCIPLES OF SYSTEMS THINKING In general, systems thinking is characterized by these principles: thinking of the “big picture” balancing short-term and long-term perspectives recognizing the dynamic, complex, and interdependent nature of systems taking into account both measurable and non-measurable factors remembering that we are all part of the systems in which we function, and that we each influence those systems even as we are being influenced by them. Page 22 of 154 The “Big Picture” During stressful times, we tend to focus on the immediate, most pressing problem. With this narrow focus, we can perceive only the effects of changes elsewhere in the system. One of the disciplines of systems thinking, however, involves being able to step back from that immediate focus and look at the bigger picture. As you know, whatever problem you’re involved in right now is part of a larger system. To discover the source of a problem, you have to widen your focus to include that bigger system. With this wider perspective, you’re more likely to find a more effective solution. For example, imagine that you work for a regional appliance distributor that is experiencing growing delays in providing timely service to its customers. As a manager in this company, you might be tempted to focus first on the service technicians, perhaps on the service order-taking system, or even on service-order dispatching. But take a step back. What if you knew that about six weeks before the service crisis started, the sales group had implemented an incentive program that included free set-up and installation of new appliances? To sell more appliances, the sales force encouraged customers to make service appointments as soon as their delivery dates were set. Then a service person could come out to install the appliance and make all the electrical and water connections. However, because the customer ser- vice department had not been informed of the incentive program, it had no opportunity to add staff to handle the installation incentive. With this wider view, you might conclude that the delays in providing customer ser- vice do not come from the customer service department, and you might choose a different path to solving the problem. Long Term, Short Term How often does your organization expect to see results of its activities? In a year? A quarter? A week? In addition to checking the health of the company at these kinds of intervals, some businesses also make major strategic changes—such as cost-cutting campaigns, layoffs, new hiring, production increases—every time they check how the business is doing. Yet systems thinking shows that behavior that leads to short-term success or that is prompted by short-term assessments can actually hurt long- term success. However, the point is not that the long-term view is “better” than the short-term view. After all, if a little boy runs out into traffic, grabbing him by the arm at risk of injuring his shoulder or startling him makes far more sense than moving slowly or speaking softly while a bus speeds down the street. In thinking about any decision, the best approach is to strike a balance, to consider short-term and long-term options and to look for the course of action that encompasses both. At the very least, try making your decisions by first thinking through their likely ramifications— both short term and long term. Here’s an example: As a business grows, it may use consultants to handle its human resource and training functions. In the short run, this sensible business decision can bring in a high level of professional expertise. If the company decides that consulting help is getting too expensive, how- ever, it will eventually move to develop its own in-house HR and training department. To balance the long and the short term, the company could phase in internal expertise at certain levels of revenue, sales volume, or staffing, and overlap internal and outside resources while the new staff members get their bearings. Whether you’re focusing on the long term or the short term, the key is to be aware of all the potential impacts of whichever strategy you choose. Dynamic, Complex, and Interdependent When you look at the world systemically, it becomes clear that everything is dynamic, complex, and interdependent. Put another way: Things change all the time, life is messy, and everything is connected. We may know all this. However, when we’re struggling with an over- whelming problem or an uncertain future, we tend to want to simplify things, create order, and work with one problem at a time. Systems thinking doesn’t advocate abandoning that approach altogether; instead, it reminds us that simplification, structure, and linear thinking have their limits, and can generate as many problems as they solve. The main point is that we need to be aware of all the system’s relationships—both within it and external to it. Measurable vs. Non-measurable Data Some organizations value quantitative (measurable) over qualitative (non- measurable) data. Others are just the opposite. Systems thinking encourages the use of both kinds of data, from measurable information such as sales figures and costs to harder-to-quantify information like morale and customer attitudes. Neither kind of data is better; both are important. Page 23 of 154 Systems thinking also alerts us to our tendency to “see” only what we measure. If we focus our measuring on morale, working relationships, and teamwork, we might miss the important signals that only statistics can show us. On the other hand, if we stay riveted on “the numbers,” on how many “widgets” go out the door, we could overlook an important, escalating conflict between the purchasing and the production departments. We Are Part of the System One of the more challenging systems thinking principles says that we usually contribute to our own problems. When we look at the big picture, over the long term, we often find that we’ve played some role in the problems facing us. Unintended consequences. Sometimes the connection is simple—the problem plaguing us today is an unintended consequence of a solution we implemented yesterday. For example, to control costs, a bank manager decides to limit the number of tellers on Thursday evenings and Saturday mornings. Eventually, the manager notices that— surprise! —other banks seem to be getting all the customers who rely on having access to the bank during evenings and weekends. Assumptions. Sometimes our assumptions are what get us into trouble. Imagine, for example, that you’re the manager of Frank’s Steak House, a restaurant that specializes in affordable family dining. You’ve noticed that business at the restaurant has flagged a bit for two or three months in a row. You conclude that this is an enduring trend, because you’ve read essays in the newspapers about a possible resurgence in the health of the national economy. People are feeling freer to dine at more expensive restaurants, you decide. To prepare Frank’s to weather the new trend, you lay people off. However, demand bounces back a few months later, and you’re forced to scramble to bring workers back. Some of these workers are rehired at higher pay than before, some on overtime. These kinds of assumptions about how the world works (also known as mental models) are powerful drivers of the decisions we make. Values and beliefs. Deeply held values and beliefs can lock us into counterproductive ways of making decisions. The Cold War is a perfect example: As long as the U.S. and the former U.S.S.R. each firmly believed that the other was intent on annihilating its ideological enemy, the arms race was inevitable. Even worse, the longer the conflict continued, the harder it was to call it off. Both nations were highly invested in justifying their “saber-rattling” in the past, present, and future. In this case, too, mental models played a major role. SYSTEMS THINKING AS A SPECIAL LANGUAGE As a language, systems thinking has unique qualities that make it a valuable tool for discussing complex systemic issues: It emphasizes looking at wholes rather than parts and stresses the role of interconnections. Most important, as we saw earlier, it recognizes that we are part of the systems in which we function, and that we therefore contribute to how those systems behave. It is a circular rather than linear language. In other words, it focuses on “closed interdependencies,” where x influences y, y influences z, and z come back around to influence x. It has a precise set of rules that reduce the ambiguities and miscommunications that can crop up when we talk with others about complex issues. It offers visual tools, such as causal loop diagrams and behavior over time graphs. These diagrams are rich in implications and insights. They also facilitate learning because they are graphic and therefore are often easier to remember than written words. Finally, they defuse the defensiveness that can arise in a discussion, because they emphasize the dynamics of a problem, not individual blame. It opens a window on our mental models, translating our individual perceptions into explicit pictures that can reveal subtle yet meaningful differences in viewpoints. To sum up, the language of systems thinking offers a whole different way to communicate about the way we see the world, and to work together more productively on understanding and solving complex problems. Language has a subtle, yet powerful effect on the way we view the world. English, like most other Western languages, is linear—its basic sentence construction, noun-verb-noun, translates into a worldview of “x causes y.” This linearity predisposes us to focus on one-way relationships rather than circular or mutually causative ones, where x influences y, and y in turn influences x. Unfortunately, many of the most vexing problems confronting managers and corporations today are Page 24 of 154 caused by a web of tightly interconnected circular relationships. To enhance our understanding and communication of such problems, we need a language more naturally suited to the task. Elements of the Language Systems thinking can be thought of as a language for communicating about complexities and interdependencies. In particular, the following qualities make systems thinking a useful framework for discussing and analyzing complex issues: Focuses on “Closed Interdependencies.” The language of systems thinking is circular rather than linear. It focuses on closed interdependencies, where x influences y, y influences z, and z influences x. Is a “Visual” Language. Many of the systems thinking tools—causal loop diagrams, behavior-over-time diagrams, systems archetypes, and structural diagrams —have a strong visual component. They help clarify complex issues by summing up, concisely and clearly, the key elements involved. Diagrams also facilitate learning. Studies have shown that many people learn best through representational images, such as pictures or stories. A systems diagram is a powerful means of communication because it distills the essence of a problem into a format that can be easily remembered yet is rich in implications and insights. Adds Precision. The specific set of “syntactical” rules that govern systems diagrams greatly reduce the ambiguities and miscommunications that can occur when tackling complex issues. Example: In drawing out the relationships between key aspects of a problem, causal links are not only indicated by arrows, but are labeled “s” (same) or “o” (opposite) to specify how one variable affects another. Such labeling makes the nature of the relationship more precise, ensuring only one possible interpretation. Forces an “Explicitness” of Mental Models. The systems thinking language translates “war stories” and individual perceptions of a problem into black-and-white pictures that can reveal subtle differences in viewpoint. Example: In one systems thinking course, a team of managers was working on an issue they had been wrestling with for months. One manager was explaining his position, tracing through the loops he had drawn, when a team member stopped him. “Does that model represent your thinking about this problem?” he asked. The presenter hesitated a bit, reviewed his diagram, and finally answered, “Yes.” The first man, evidently relieved, responded, “After all of these months, I finally really understand your thoughts on this issue. I disagree with it, but at least now that we are clear on our different viewpoints, we can work together to clarify the problem.” Allows Examination and Inquiry. Systems diagrams can be powerful means for fostering a collective understanding of a problem. Once individuals have stated their understanding of the problem, they can collaborate on addressing the challenges it poses. And by focusing the discussion on the diagrams, systems thinking defuses much of the defensiveness that can arise in a high-level debate. Example: When carrying on a systems discussion, differing opinions are no longer viewed as “human resources’ view of our productivity problem” or “marketing’s description of decreasing customer satisfaction,” but different structural representations of the system. This shifts the focus of the discussion from whether human resources or marketing is right to constructing a diagram that best captures the behavior of the system. Embodies a Worldview that looks at wholes, rather than parts, that recognizes the importance of understanding how the different segments of a system are interconnected. An inherent assumption of the systems thinking worldview is that problems are internally generated—we often create our own “worst nightmares.” Example: At systems thinking courses, participants often play a board game known as the Page 25 of 154 “Beer Game,” where they assume the position of retailer, wholesaler, distributor, or producer. Each player tries to achieve a careful balance between carrying too much inventory or being backlogged. When things go wrong, many people blame their supplier (, “I kept ordering more, but he didn’t respond”) or the buyers (, “fickle consumers—one day they’re buying it by the truckload, the next day they won’t even touch the stuff”). In reality, neither the buyers nor the suppliers are responsible for the wide fluctuations in inventory—they are a natural consequence of the structure of the system in which the players are functioning. The systems thinking worldview dispels the “us versus them” mentality by expanding the boundary of our thinking. Within the framework of systems thinking, “us” and “them” are part of the same system and thus responsible for both the problems and their solutions. Learning the Language Learning systems thinking can be likened to mastering a foreign language. In school, we studied a foreign language by first memorizing the essential vocabulary words and verb conjugations. Then we began putting together the pieces into simple sentences. In the language of systems thinking, systems diagrams such as causal loops can be thought of as sentences constructed by linking together key variables and indicating the causal relationships between them. By stringing together several loops, we can create a “paragraph” that tells a coherent story about a particular problem under study. If there were a Berlitz guide to systems thinking, archetypes such as “Fixes that Backfire” or “Shifting the Burden” would be listed as “commonly used phrases.” They provide a readymade library of common structures and behaviors that can apply to many situations. Memorizing them can help you recognize a business situation or problem that is exhibiting common symptoms of a systemic breakdown. Of course, the key to becoming more proficient in any language is to practice—and practice often. When reading a newspaper article, for example, try to “translate” it into a systems perspective: take events reported in the newspaper and try to trace out an underlying pattern that is at work, check whether it fits one of the systems archetypes, or if it is perhaps a combination of several archetypes, then try to sketch out a causal loop or two that captures the structure producing that pattern. Don’t expect to be fluent in systems thinking right away. When sitting in a meeting, see if you can inform your understanding of a problem by applying a systems perspective. Look for key words that suggest linear thinking is occurring— statements such as “we need more of the same” or “that solution worked for us the last time this happened, why not use it again?” You can also create low key practice sessions by working with a small team of colleagues to diagram a particular problem or issue. Becoming Fluent We say that someone is fluent in a language when they begin to think in that language and no longer have to translate. But fluency means more than just an ability to communicate in a language; it means understanding the surrounding culture of the language—the worldview. As with any foreign language, mastering systems thinking will allow us to fully engage in and absorb the worldview that pervades it. By learning the language of systems thinking, we will hopefully change not only the way we discuss complex issues, but the way we think about them as well. The Language of Systems Thinking Page 26 of 154 Linear Thinking Focuses on the immediate cause and effect of events. Cause and effect are assumed to occur together. Systems Thinking Focuses on the interrelationship and dynamics among system components. Cause and effect are separated in time and space. Detail Complexity Characterized by many variables and complex arrangements. Cause and effect occur together. It is the basis for linear thinking. Dynamic Complexity Created by system structural interrelationships and dynamics. Cause and effect are separated in time and space. It is the basis for systems thinking. Convergent Problems A quantified and optimal solution is possible. Linear thinking usually provides acceptable solutions to these problems. Divergent Problems No best solution can be determined, and many solutions are possible. Long-term solutions to these problems usually require a systems approach. Circles of Causality Every event or happening is both a cause and an effect. Examples of circles of causality: CAUSE EVENT EFFECT Unemployment Poverty Government Spending Government Taxes Consumer Spending Spending Feedback Observed patterns of behavior or results of actions taken. Leverage Highly focused actions that can change system structure. In this section, each learning activity focuses on one or two systems principles. As with the Section 1 learning activities, the exercises here can be done either by yourself or with a group. If you are working with a group, focus on the activities that highlight principles you consider the most valuable for your organization. Keep in mind that some of the activities are active exercises; some are meant for individual reflection and group discussion—try to use a mix. Finally, remember that there is no one right response to the exercises. The idea is to use your imagination, and to have some fun! Page 27 of 154 S T R E T CHIN G TH E T I M E L I N E ACTIVITY 1 Purpose: To think in “big picture” terms To consider both short-term and long-term perspectives on a problem To practice seeing patterns and trends in a problem To identify the roots of a current problem Outcome: A timeline showing the history of a current problem Insights about recurring patterns in an organization Number: Minimum 1; maximum about 15 Equipment: For self-study: A white board or a couple of flip-chart pages and colored markers For a group: Colored yarn, pushpins or tape, several pairs of scissors, and a large wall or floor space OR long sheets of flip-chart paper, three or more colored markers for each person Space: For a group, enough wall or floor space so that pairs or trios of people have at least six feet to themselves STEPS 1. Lay your flip-chart paper on its side, horizontally, and position yourself near the far-right end of the page. (You might even want to tape two flip-chart pages together horizontally, to give your- self lots of writing space.) If you are working at a white board, adapt the directions accordingly. 2. Identify a current problem or issue facing your immediate work group or department. If nothing comes to mind, use a problem within your family or community. Choose a moderate-size issue with which you have direct personal experience. 3. Make a mark on the paper to symbolize the present and name the issue in one or two words. For example: P0RESENT X Sales dropping 4. To the best of your knowledge, when did this problem start? Pick a distance to the left across the paper that represents the amount of time you think has elapsed since the problem began. Mark the beginning point with your marker. Draw a line between the beginning point and the present. Write in the time span. BEGINNING PRESENT X Sales dropping 5. Now project yourself back in time to the “Beginning” point. To the best of your knowledge, what was happening around that time to cause the beginning of the problem? Write your answer as a brief phrase, as shown in the example below. Page 28 of 154 BEGINNING PRESENT X New product late Sales to market dropping 6. With a new marker color, extend your timeline even farther back in time, as shown below. Add a time span between “Earlier beginning” and “Beginning.” 6 months EARLIER BEGINNING BEGINNING New product late to market Page 29 of 154 PRESENT X Sales dropping 7. Now project yourself back once more, to “Earlier beginning.” Think of what was happening at that point that led to the problem you wrote under “Beginning.” Name it and mark it on the timeline in a third color. EARLIER BEGINNING BEGINNING PRESENT X 6 months Mistakes made new product Sales in product late to market dropping development 8. Continue the process one more time, by adding “Earliest beginning” as shown below. Add what was happening at that time and fill in a time span between “Earliest beginning” and “Earlier beginning.” 9. Now imagine yourself present at any of the three beginning points you have identified. Is there anything else going on at that time that resembles the original problem you chose? Or is there another kind of problem that alternates with yours? Is there another problem going on in parallel to yours right now? (In the timeline boxes above, for example, maybe there was a hiring difficulty going on at the “Earliest beginning” stage of the problem.) If you can identify a parallel problem, add it to your timeline as a parallel line, using a distinctive color. 10. Now try one more step with your timeline. Instead of projecting backward in time, project for- ward. Given the sequence of events you’ve drawn, what do you expect to happen in the future if nothing is done about the problem? Add another piece of flip-chart paper if necessary and extend your timeline to the right. Using a new marker color, add your thoughts about the future to this new part of your timeline. QUESTIONS 1. What was it like to create a visual image of the time and events surrounding the current problem you identified? Any surprises? Any insights? Write your thoughts below. If you worked on this activity with a group, discuss your insights together. 2. What did you learn? 3. If you were able to identify parallel problem timelines in Step 9, what did you learn? 4. If you were not able to trace back to earlier beginnings, what did you learn? 5. What helps you to see the “big picture” of your problem? 6. What obscures it? ACTIVITY 2 TH E S HAP E O F TH E P R O B L E M Purpose: To explore the connections and interdependencies among the components of a problem To discover the intangible aspects of a problem To practice widening your view of a problem To see the complexity within a problem Outcomes: A map of the connections and interdependencies of a problem Insights about the structure of the problem Page 31 of 154 Number: Minimum 1; maximum 20 Equipment: Flip-chart paper and three or four colored markers per person Space: For groups, enough wall, floor, or table space for everyone to lay out a flip-chart page and draw STEPS 1. Identify a problem or an issue currently facing you or your immediate work group. (Your work group might be your department, division, unit, and so forth.) In the center of your flip-chart paper, draw a circle and write in the name of your group. Write one or two words to identify the issue you chose, as shown in the example in Figure 2.1, “The Center Circle.” FIGURE 2.1 The Center Circle Work 2. Who else outside your group is directly involved in or affected by this issue? Write your answers within their own circles in a ring around your central issue. Connect each outer circle with the middle circle, similar to Figure 2.2, “The Circle Expands.” 3. Who is touched by each of the individuals or groups you identified in Step 2? Who is indirectly connected to your issue or problem? Don’t forget families, friends, and other groups that can be affected when people are stressed, working overtime, excited by their successes, or receiving bonuses. Draw these people or groups into the picture and connect them to the appropriate circles, as in Figure 2.3, “Even More Connections.” Page 32 of 154 FIGURE 2.3 Even More Connections New Departments Production Hires Workers Managers Customers Training: Sales Group People Overload Instructors Other Courses Administrators Developers Maintenance Accounting Department Department 4. If there are any other connections beyond what you’ve already drawn, map them in. The connections are not limited to human beings. They can include items such as “Revenues” or “Other Groups’ Work.” Your map can have as many circles or layers as make sense to you, as shown in Figure 2.4, “The Final Picture.” QUESTIONS 1. In your diagram, what happens to the outer circles when things are going well in the center circle? When they’re not going well? Examples? Page 33 of 154 2. What happens to the center circle when things are going well in the other circles? When they’re not going well? Examples? 3. Looking at the interconnections, can you see any ways in which something you do in the center circle causes a change in a connected circle that then comes back and affects the center circle? Examples? 4. Did you find it difficult to add many circles to your original circle? If so, what are some possible reasons for this difficulty? 5. If you worked on your map with others, discuss your insights together. If you worked with others, but each of you made your own map, exchange your maps and share the insights about the maps. ACTIVITY 3 I S TIM E O N Y OU R S IDE ? Purpose: To think about how your organization sets goals, and how frequently it measures results To explore the impact of the time cycles involved in setting goals and measuring results Outcome: Insights about how time frames influence what we pay attention to and what we accomplish Number: Minimum 1; maximum as many as desired Equipment: Flip chart and markers (optional) Instructions: Reflect on the following questions and discuss them with others if possible. QUESTIONS 1. What is your organization’s stated goal or mission? What is it trying to achieve? (State the mission as simply as possible. “Organization” can refer to your immediate work group, your division or department, or the overall organization.) 2. Is there a desired time frame for achieving the goal or mission? If so, what is it? 3. What results does the organization measure or pay attention to? (Examples: sales volume, revenue, meals served, passenger miles, return on assets, return to shareholders) 4. How often does the organization measure those results? (Examples: sales volume per quarter, meals served per week, passenger miles per vehicle, return on assets per year) 5. What goals does the organization have regarding what it measures? (Example: 2 percent sales growth per quarter) 6. How long does the organization take to produce, create, or deliver what is measured? (Examples: selling groceries takes 5–10 minutes; selling a car takes 1 hour–2 weeks; selling a house takes 1 day–1 year; selling a large management-information system takes 6–18 months) 7. What do you notice about the time frames for your organization’s mission; for its target results; for its measurements; and for production, service, or delivery? 8. What do you think are the effects of those time horizons? ACTIVITY 4 FRO M S HOR T TER M T O L ON G TER M Purpose: To discover which aspects of your work are short term and which are long term Page 34 of 154 Outcome: Timelines of short-term and long-term events or outcomes Number: Minimum 1; maximum as many as desired Equipment: Flip-chart paper, tape, and markers OR lined paper and pens or pencils Round 1: Your organization—Short Term or Long Term? Instructions: Write your answers to each question in the accompanying box. QUESTIONS 1. What is the shortest-term discrete product, service, or other deliverable from your organization? How long does it take to produce or deliver it? Examples  A soft drink / 90 seconds to fill and serve A tank of gas / 5 minutes to fill. A consultation / 1 hour An express package / 15 hours from pick-up to delivery A house / 4 months from ground-breaking to finished siding. Shortest-term deliverable: How long? 2. What is the longest-term product, service, or other deliverable from your organization? How long does it take to produce or deliver it? Examples  A bridge / 3 years A communication system / 18 months A new management competency / 12 months Longest-term deliverable: How long? 3. What, if anything, falls into a middle-term length of time? How long does it take to produce or deliver it? Middle-term deliverable: How long? Page 35 of 154 4. How much of your routine work is spent on the short-term end of the spectrum? At the long- term end? % Short-term: % Long-term: 5. Looking at your answers, how would you define “short term” and “long term” in your organization? 6. How do you think your organization’s sense of short and long term compares to other organizations’? How does this sense differ? How is it similar? 7. Where is the emphasis in your organization—long term or short term? Why? What drives that focus? Round 2: You—Short Term or Long Term? Instructions: In the space provided, jot down your responses to the following questions. 1. What do you want to accomplish today? 2. This week? 3. This month? 4. This year? 5. Within five years? 6. Within 10 years? 7. By the time you’re very old? 8. Looking at your answers to the above questions, how would you define “short term” and “long term in your own life? At what point is short term differentiated from long term? 9. How do you think your sense of short and long term compares to your organization’s? How does this sense differ? How is it similar? 10. What do you emphasize in your own life—long term or short term? Why? What drives that focus? 11. When you made your list, was there a point at which your vision of what you want to accomplish shifted? If so, where, and how? 12. Do you think this kind of shift happens within your organization, too? If so, at what point in the timeline? ACTIVITY 5 I N TH E MIDS T O F A P R O B L E M Purpose: To gain familiarity with the concepts of interconnectedness or interdependency To recognize the human tendency to assign blame Outcome: Insights about our role in the problems we experience Number: Minimum 1; maximum as many as desired Instructions: Write your answers to the following questions in the space provided. QUESTIONS 1. Briefly describe a situation in which you knew that an individual or group having a problem was contributing to the problem, but wasn’t aware of their contribution. Page 36 of 154 Example  I used to work with someone, Valerie, who swore a lot at the office—really rough language. One day, she came in upset because her eight-year-old daughter, Nina, had been sent home from school for swearing. Valerie couldn’t understand where Nina picked up this behavior! It was so obvious to the rest of us, but she just couldn’t see it. 2. Now describe a situation in which you or your work group turned out to be contributing to your own problem. Example  I was experiencing deteriorating communications with a senior project team leader, Alan. I tried to clarify the relationship—I left him voice mails and got no response. I sent him memos and heard nothing back. Projects came up that I was perfect for, but Alan didn’t include me. I was furious with him. When I finally managed to meet with him, I discovered that he was communicating less with me because he felt confident about our relationship and had other problems to take care of. My deluge of voice mails and memos made him think I was under a lot of stress, so when it came time to staff demanding projects, he decided to give me a break and leave me off. At the same time, though, Alan was beginning to wonder if I was becoming unreliable. 3. Consider a persistent, recurrent, or chronic problem you are experiencing now. Tell or record the story of the problem very briefly: 4. Now ask yourself: A. Is there any way you or your group may be causing or contributing to the problem? If so, how? B. Is there anything you did in the past that has generated an unintended consequence? If so, what? C. What might happen if you were to focus on the short-term aspects of the problem and ignore the longer term? D. Sometimes feedback comes to you slowly or in roundabout ways. What, if any, aspect of the problem might stem from delayed or indirect feedback? 5. Do you now have any new insights into your problem? If so, what are they? 6. What, if any, difference does it make to see the part you are playing in a problem? References: https://www.thoughtexchange.com/blog/the-11-laws-of-systems-thinking-and-stakeholder-engagement/Jamie Billingham https://thesystemsthinker.com/author/michael-goodman/ Page 37 of 154 I Chapter 3 Uncovering Systemic Structures: Drawing Behavior Over Time Graphs Structures generate patterns of behavior and are therefore at n Chapters 1 and 2, we introduced the idea that systemic is the root of many of our problems. In this section, we explore several steps for uncovering these structures: 1. Formulating the problem 2. Identifying the key variables in the situation; in other words, the main actors in the systemic structure 3. Graphing the behavior of those variables over time It takes you through the next step in identifying systemic structure: building causal loop diagrams. As you read Chapter 3, remember that thinking systemically is an experimental process involving trial and error. The guidelines and the examples in this book may look orderly and straightforward, but applying systems thinking in real life is often messy and leads to lots of twists and turns. Thinking systemically always involves an iterative process of formulating problems with care, creating hypotheses to explain what is going on, tracking and revising the reasoning behind your explanations, testing possible solutions to problems, and reformulating the problem based on new understandings. At the end of the chapter, students must be able to: 1. Experience formulating a problem. Contents: Chapter 3: Systems Thinking as a Special Language 3.1 Uncovering Systemic Structures: Drawing Behavior over Time Graphs Identifying the problem: The problem with price promotions. 3.2 Identifying the Variables: The case of energy drain 3.3 Drawing behavior over time graphs: The case of audio – electronic roller coaster 3.4 What, why, when, where, and how of Systems Thinking 3.5 The Eleven (11) Laws of Systems Thinking FORMULATING A PROBLEM Let’s say you’ve just finished a course on systems thinking and have identified a problem you want to address. Could you apply systems thinking tools to figure it out? Of course! All problems have systemic origins; the key is to choose one that is appropriate and significant to you. Here are some tips: Guidelines for Identifying Systemic Problems 1. The problem is chronic and recurring. 2. The problem has been around long enough to have a history. 3. You or someone else may have tried to solve this problem, but your attempts either did not work at all or stopped working after a while. 4. You haven’t been able to identify an obvious reason for the pattern of behavior over time. 5. The pattern of the problem’s behavior over time shows one of the classic shapes in Figure 3.1, “Patterns of Problem Behavior.” Another reason for doing a systems thinking analysis is that the problem is important to you or to your organization, and is worth spending time and effort on solving it. Maybe the problem is currently under discussion, or you have a hunch that an old problem is about to strike again. Here are some examples of problems that show typical systemic behavior: We’ve been having trouble getting our refrigerators assembled fast enough to fulfill customer orders. So, we reconfigured the flow of materials on the manufacturing floor to try to improve the assembly process. However, after we made this change, the assembly process actually took more time than before. Somehow, the change seems to have made everything worse. We introduced a line of high-grade investment portfolio products two years ago, but our agents continue to sell the older products. We’ve tried changing the incentive schemes, and we’ve put out Page 52 of 154 stacks of marketing and information materials, but nothing seems to motivate agents to focus on the newer line. Every six months we go through another round of cost-cutting campaigns, from laying off workers to lengthening maintenance intervals to simplifying marketing. Costs go down for a while but then start rising again. Guidelines for Formulating the Problem Once you’ve targeted a problem for a systemic approach, work on developing a clear, succinct statement of the problem. This is often the toughest part of systems thinking, but it’s very worthwhile. The more clearly and specifically you can state your issue, the more focused your systemic analysis will be. Be sure to brainstorm with other people who can contribute their views of the issue as well as their knowledge of its history. If necessary, proceed with two or three formulations of the problem and learn from the different views. Don’t get discouraged! It’s natural—even beneficial—for this stage of the process to take a while. You and your group will generate the most insights into the problem by taking the time to ask lots of probing questions, share your perspectives on the issue, and revise your problem stat

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