The Bigger Picture

Do you wonder why the same problems recur no matter how efficiently solved? Why 'winning' strategies fail or fall short? Why new ideas and innovations are limited no matter how much direction and resources are given? Why projects that meet targets are often short-lived or prove misaligned with strategic objectives? Why your organization is in a constant state of urgent reactiveness to market disruptions?

In times of accelerating change and increasing complexity, traditional linear problem-solving and strategizing often fall short. The complexities of today's challenges demand a more holistic perspective. Systems thinking, which centers on the interconnectedness and interdependence of organizational elements, suggests another lens. One that helps leaders grasp and address complexity, fostering more resilient, adaptive, and innovative organizations.

What is Systems Thinking?

Systems thinking recognizes what enables an organization to adapt and grow without controls that limit its innate capacity for stability, creativity, and innovation.

The dynamics of organizations mirror those of complex adaptive systems in the natural world. Complexity science has for decades described how systems—biological, technological, and organizational, among other types—must be enabled rather than controlled in order to thrive and realize their potential.

Systems thinking is a holistic approach to influence and decision-making that focuses on how an organizational system's constituent parts interrelate and regulate themselves before the leadership arrives. It involves recognizing patterns, interconnections, and people dynamics, and aims to identify root causes rather than symptoms.

One of my clients is a senior executive for a leading life insurer overseeing a company-wide transformation initiative. He had been profoundly frustrated that the initiative was floundering despite the clear scope, direction, guidelines, guardrails, and deadlines given the project team along with a large budget and well resourced program management office. The objective of the project was to reimagine the firm's customer experience and product delivery—to leapfrog the competition with an innovative new-to-the-industry approach to customer engagement. Yet there was little room for the team's imagination amidst the top-down driven, structure-heavy conditions the team worked under. The emphasis on process discipline thwarted the creative energy, motivations, and outcomes possible in more organic and unleashed conditions. Conditions that would enable the talented and carefully selected team to function as a self-regulating system already equipped to produce ideas and design for a modernized value proposition.

My client would ask, "Why can't this experienced and capable team get this done when they are given all the direction and structure possible?" My response? "Your question answers itself!"

What is Systems Thinking about?

Awareness that system elements are interconnected and that changes in one part of the system influence others. The leader anticipates broader ramifications of decisions rather than being surprised by ‘unintended consequences.'

Seeing the organization as holistic, rather a collective of individual units or functions. The cost/benefit implications for the whole enterprise are the best measure of an individual decision or initiative.

Embracing complexity (not complicatedness) vs. reductionism, enabling capacities and conditions across the organization as deliberately as ‘transactional’ problem-solving. Focusing on the problem-solving capacity of the organization more than whack-a-mole fixes.

Facilitating dynamic interactions and non-linear relationships more than ‘proven’ static processes. Aligning and de-siloing teams makes an organization more resilient and effective, and the leader more leveraged and influential.

Recognizing feedback loops that self-regulate or destabilize the system. Consistent good judgement over where to course-correct or stay-the-course in response to disruptions and new insights promotes confidence in the leader and the well-being of followers.

Identifying leverage points where discrete and selective influence can produce disproportionate improvements. Striking the right balance between enabling and steering the organizational system is the 'big rock' of systems thinking. Recognizing and practicing this balance is more important than its perfection.

Striking the right balance between enabling and steering the organization is the 'big rock' of systems thinking

How does Systems Thinking make leaders better?

Decision-making

Ambiguity and uncertainty are uncomfortable for many leaders. Yet these unavoidable and unsolvable realities of complexity and change must be embraced.

Systems thinking reveals a bigger picture, consisting of more variables and their interactions. This holistic perspective leads to more informed and strategic decisions. Understanding feedback loops and interaction dynamics helps leaders to improve at anticipating consequences of their actions, and at reducing the risk of counterproductive outcomes.

Problem-solving

Yes, we need to solve problems, often urgently and fast. Systems thinking demands looking below the surface to the root causes, and leads to more sustainable solutions and conditions. By considering the whole system, novel insights and innovative solutions can emerge that might not be exposed with linear thinking.

Collaboration and teamwork

Systems thinking encourages a shared understanding of organizational goals and challenges. This shared perspective enhances collaboration and teamwork across units. By emphasizing interdependencies, systems thinking breaks down organizational silos and fosters cross-functional cooperation and communication.

Strategic planning and implementation

Systems thinking promotes a long-term perspective. How decisions made today will impact the organization in the future. Understanding how different parts of the organization interact, alignment of influence and initiatives with strategic objectives is tightened.

Organizational adaptability

Systems thinking promotes adaptive confidence and culture. Assessing outcomes holistically, organizations can adapt and evolve more productively. Understanding the complexities of interactions helps helps build resilience, enabling the organization and its leaders to more 'routinely' adapt to changes and challenges.

How is Systems Thinking applied?

Innovation and growth

By identifying leverage points within the system, leaders can focus their innovation efforts where the impact value is greatest. Systems thinking helps decision making by balancing short-term gains with long-term goals.

Change management

Systems thinking demands more integrated impact assessment across the organization, for anticipating resistance and planning effective mitigation strategies. Engaging stakeholders across the organization in the change process gains buy-in and support.

Crisis management

Systems thinking aids holistic response planning that addresses immediate needs in a crisis and long-term recovery and resilience. Post-crisis, systems thinking prompts reflection and learning from crises, helping organizations improve preparedness and response strategies for future situations.

Is this just empowerment by another name?

No, and partly. Getting out of the way of your people is one element of systems thinking, but not the central idea. More than awarding trust and autonomy, systems thinking requires leadership's invested action to architect and manifest conditions that will enable the organization to fully function as the system it already is without leadership influence. Within this paradigm, the impact of judicious leadership is amplified.

Are there challenges with applying Systems Thinking?

Obtaining the benefits comes with predictable execution challenges. Systems thinking may initially overwhelm those anchored to linear thinking. Leaders and team members may need education and training to develop a systems thinking mindset and skills. A cultural shift may be necessary for the organization, which can take time and willingness to fail on the path to benefits–investments worthy of the expected returns.

No matter how strategic their philosophy, most organizations have little appetite for long-term operating investments without quantifiable return expectations. Nevertheless, it is notable how many types of complex adaptive systems in our world that are models for organizations. How much leadership does a school of fish, swarm of bees, or flock of geese require to operate perfectly as a functioning system? However, imagine the possibilities for an organizational system that is both enabled and judiciously influenced.

Conclusion

Systems thinking serves organizational success and sustainability in an increasingly complex and interconnected world. A holistic perspective helps leaders enhance decision-making, solve problems more effectively and durably, improve adaptivity, promote collaboration, and unlock creativity and innovation. Understanding and leveraging the dynamic interactions across the organization enables leaders to navigate complexity and build resiliency. Systems thinking equips leaders to both manage current challenges and shape the future of their organizations. Try thinking more about that system around you when you make decisions, and enjoy the results.