Excellence Plus - A Focus on Systems Thinking

The Power of Systems Thinking: Incorporating the Business Ecosystem

In today's interconnected world, it's becoming increasingly clear that success in any endeavour requires a holistic perspective. ?Organisations, irrespective of size or nature, must navigate a complex web of internal and external factors to stay competitive and achieve their goals. ?The internal business model needs to be aligned and agile, and increasingly it needs to be seamlessly aligned to the external ecosystem.

One powerful tool for achieving this perspective is Systems Thinking, a methodology that emphasises the interconnectedness of all things and the need to consider the larger system in which an entity operates.?

In this article, we'll explore the benefits of Systems Thinking and how it can be applied to incorporate the business ecosystem.

What is Systems Thinking?

The organisation is a system. ?The system comprises of processes, which are made up of all kinds of activities. ?A well-structured organisation will be organised in such a way that all its activities will contribute in an efficient and optimal way to the achievement of the organisation’s purpose.

At its core, Systems Thinking is a way of understanding and analysing complex systems by examining the relationships between their various parts and how those parts interact and influence one another. ?It involves taking a holistic view of an organisation, rather than focusing on individual components in isolation.

Systems Thinking recognises that systems are dynamic and constantly changing, and that changes in one part of the system can have ripple effects throughout the entire system. ?Unless an organisation is operating as a closed system, this extends to the external ecosystem.

Incorporating the Ecosystem

While Systems Thinking can be applied to any complex system, it is particularly powerful when applied to the external ecosystem. ?An organisation's ecosystem includes all the entities with which it interacts, including suppliers, customers, competitors, regulatory bodies, and the broader social and environmental context in which it operates. ?By taking a systems view of the organisation’s ecosystem, companies can gain a more complete understanding of the factors that influence their success and identify opportunities to improve their operations.

For example, a company that takes a systems view might recognise that its success is dependent not only on its own internal operations but also on the health of its suppliers and the communities in which it operates. ?By identifying potential risks and opportunities in these areas, the company can take steps to mitigate risks and leverage opportunities, ultimately improving its overall performance.

Some examples:

• Samsung manages its own business operating model, participates in the Apple ecosystem and is in competition with Apple in the smartphone market.
• A residential aged care provider will focus on service delivery to the residents and families of the residents. It also contributes to the aged care industry body to influence government regulations and certification, while also adhering to the regulations and interacting with the government for funding.

Benefits of Systems Thinking

One of the primary benefits of Systems Thinking is that it allows for a more comprehensive understanding of the organisation’s system and the ecosystem it operates within. By taking a holistic view and analysing the relationships between the various parts, Systems Thinking practitioners can identify patterns and trends that might not be immediately apparent from a narrower perspective. This, in turn, can lead to better decision-making, problem-solving, or opportunities that might have otherwise been missed.

Conclusion

In today's complex and interconnected world, Systems Thinking has become an increasingly important tool for achieving success in any endeavour. By taking a holistic view of complex systems, including the business ecosystem, practitioners of Systems Thinking can gain insights into how the system functions and how it might be improved or optimised. Companies that incorporate Systems Thinking into their operations can gain a competitive advantage by identifying potential issues and opportunities before their competitors do, ultimately improving their overall performance and achieving their goals.

A note to take away - the first rule of Systems Thinking:

Today's problems come from yesterdays "solutions"…

Solutions that merely shift a problem from one part of the system to another are not solutions at all!

By David Sikorski (Senior Consultant, Thrive35)

Upcoming events

LGEN: Intro to Systems Thinking - Q & A Session (Free)

Thursday 27th April 2023, 3:00pm - 5:00pm AEST (Virtual)

Registration here.

Systems Thinking - Align Your Organisation

Tuesday 16th and Tuesday 23rd May 2023, 9:00am - 5:00pm AEST (Virtual)

Registration here.