Joining the Dots: How Systems Thinking Helps Leaders Drive Organisational Change

These days, it feels like everyone is in a continuous loop of organisational change - every leader I know is currently wrapped up in a restructure, operating model shift, digital transformation, or service delivery review.

Fair enough, too. Organisational change is an essential and inescapable part of growth and development. Now more than ever, we need our teams and businesses to adapt and transform to stay competitive. But balancing those change programmes with the complex reality of keeping our existing operations running is hard work. It needs strong leadership, strategic planning... and systems thinking.

Systems thinking has never been a more important tool for leaders who are serious about making things better - not just different. Otherwise, you risk messing up what's working now, replacing it with something worse, and alienating your people along the way.

When senior leaders have the skills to take a step back and view the complexity and interconnectivity of their organisations, they can orchestrate change that drives actual progress.

In this (long!) article, we look at:

• What systems thinking is
• Key principles of systems thinking
• The benefits of applying systems thinking to organisational change
• How to lead organisational change using systems thinking
• How to bring systems thinking into your work, and questions you should ask along the way.

What is Systems Thinking?

Systems thinking views organisations as complex interrelated systems, rather than separate silos. It's about understanding how things influence one another within a whole. In essence, it's 'joining the dots'.

Imagine you're doing a jigsaw puzzle. It has a lot of different pieces - edge pieces, bits of sky, and the main scene: a busy town square. If you want to put the puzzle together, you can't just grab a handful of pieces and start banging them together. You can't make a beautiful shopfront and a cobblestone path, and consider the job done. Instead, you look at the final picture on the box, and you start sorting: edge pieces first, then groups of similar sections. Carefully, piece by piece, you put the picture together, as you understand how the different colours and shades work together to create the final scene.

That's what systems thinking is all about. It means looking at the whole puzzle. When we talk about organisational change, we're changing the way a big group of people work together. With just one piece missing, the scene is incomplete.

If you want a better picture, you don't improve a few pieces of the puzzle - making the colours brighter, or the edges sharper. Do that, and none of the pieces will fit! Systems thinking requires a basic understanding that changing one part of the puzzle will have an impact on all of the other parts.

Key Principles of Systems Thinking

1. Holistic Perspective: Systems thinking encourages leaders to view the organisation as a whole rather than a collection of separate parts. It recognises that the behaviour of one component can impact the entire system, and vice versa.
2. Interconnectedness: Systems thinking acknowledges the interconnected nature of various functions, positions and departments. It emphasises the importance of understanding the relationships between these elements and how they contribute to the functioning of the system as a whole.
3. Feedback Loops: Feedback loops play a vital role in systems thinking. They involve a continuous flow of information and influence between different components of the system. Understanding feedback loops helps leaders identify which loops support change, and which detract from it.
4. Emergence: Systems thinking recognises that the behaviour of the system as a whole drives emergent properties that aren't seen when we only examining individual parts. Leaders need to be aware of these emergent properties to effectively drive change.

Benefits of Using Systems Thinking in Organisational Change

Applying systems thinking in organisational change is a game-changer for leaders grappling with tricky environments. Here are a few key advantages:

1. Deeper Understanding: When leaders use systems thinking, they understand their organisational dynamics on a deeper level. This helps to more accurately identify the underlying causes of issues, and make better decisions.
2. Leverage Points: Systems thinking helps leaders identify leverage points within the system. These are areas where making small changes can have big impacts. By focusing on leverage points, leaders drive transformative change with fewer resources and less disruption.
3. Anticipating Unintended Consequences: When leaders zoom out, they better anticipate unintended consequences of organisational change. Looking at how different parts interact will highlight danger areas or provide early warning of potential breakdowns.
4. Facilitating Collaboration: Systems thinking can help prevent 'best-practice' silos from hijacking change processes, encouraging teams to collaborate and co-operate across functions. With a systems approach, we see better communication, and more coordinated efforts (and less frustration)
5. Building Buy In: When leaders take a systems view, they do a better job of considering how people will be affected by changes in their organisation. They ask better questions, take a more collective approach, and support people to feel seen, heard and understood. This increases the odds of people staying motivated and engaged in change.

Leading Organisational Change Using Systems Thinking

When people are uncertain, they look to leaders for direction, reassurance and motivation. Systems leaders inspire confidence, and encourage people to lean in and try new ways of working together.

Here's a step-by-step guide to providing that leadership for your people:

1. Identify the Need for Change

Before you get excited and start plotting your next big change, take the time to work out why. What's changing? Where are you now? What's working? What's not? What needs to shift to position you for future success?

Without a compelling case for change, you'll have a hard time getting anyone on board.

2. Create a Vision for Change

You need to have an idea of the final picture on the box, before you get started.

Leaders need to be able to paint an inspiring vision of the future, to serve as a guiding light, focus the many decisions that need to be made, and inspire people to rally behind the change effort.

When we know where we're going, we create a sense of purpose and direction, ensuring that everyone is aligned and working towards a common goal.

3. Develop a Strategy for Change

Once the need for change and the vision are established, leaders need to develop a comprehensive strategy - what levers do we need to pull, to achieve our big vision?

This strategy needs to be broad enough, and flexible enough, to cope with unexpected change, but focused enough to drive good choices around priorities, resource allocation, timelines, and potential risks.

4. Engage Stakeholders In Change

All change is people change. If we don't get key people on board at the beginning, we'll lost them by the end.

Smart systems leaders know they need to involve people throughout the entire change process, with open communication, opportunities to provide meaningful feedback, and proof their concerns will be acknowledged and addressed. This isn't just good for relationships, trust and ownership - it makes for better solutions.

5. Carefully Plan Change Initiatives

Implementing change initiatives requires careful planning and execution. When leaders don't take a systems approach, they overload their teams with unreasonable timelines, competing demands and unachievable change programmes.

Avoid initiative overload with a clear picture of your operational baseline, a comprehensive understanding of organisational dependencies and a realistic view of how much time, support and resource will be needed to make change stick. Then, once you're underway, keep your eyes and communication channels open - because every important change comes with unexpected obstacles and disruption.

6. Monitor and Evaluate Change Progress

At least half of the things you try, won't work. The earlier you know about that, the better. Continuously monitoring and evaluating progress helps leaders to gauge what's working, and what isn't.

Establish clear indicators of success ahead of time, keep a close eye on gaps, and trouble-shoot early and regularly. It's easier to turn a moving ship, as long as there's someone at the wheel.

Applying Systems Thinking in Organisational Change (plus, useful questions you can ask!)

Here's how to keep systems principles in mind as you roll out your next big thing:

Recognise Interconnectedness and Interdependencies

Every department, team and function within your organisation is connected and dependent on other parts to do their job. A change in one area has ripple effects across the entire system. Leaders need to consider the broader implications of their decisions and actions, understanding how different parts of the organisation are interconnected and how changes in one area can impact others.

By designing with this connectedness in mind, leaders see potential barriers or bottlenecks before they take hold, and can uncover hidden opportunities for collaboration, that can unlock positive changes across the entire system.

Question to ask: what do our connections and relationships look like, if we draw them on a map?

Understand Feedback Loops

Your organisation is one big communication and feedback loop. Information is flowing constantly from one part of the system to another, as decisions are made and implemented.

Positive feedback loops amplify change, driving the organisation towards its desired goals. In those loops, we use feedback to improve our process, and highlight success.

Negative feedback loops, on the other hand, act as stabilising forces, maintaining the status quo. In those loops, complaints and criticism operate quietly and behind the scenes, entrenching people in their existing positions.

Questions to ask: How can we visibly and proactively harness team and customer feedback on our change journey? How do we stay across unarticulated complaints?

Identify Systemic Leverage Points

Systemic leverage points are little golden pockets within your system where small changes have significant impacts across the board. By targeting systemic leverage points, leaders can achieve a domino effect, where a small change in one area cascades and triggers broader changes throughout the organisation. These points can be found at various levels, from individual processes to organisational policies and structures.

Questions to ask: Which policies and processes have the biggest impact on how people work? What small changes would unleash big results?

Consider Unintended Consequences

In complex systems, changes can often have unintended consequences. Leaders need to anticipate and consider these potential side effects ahead of time, and create contingency plans to deal with any unforeseen challenges along the way. Doing a change pre-mortem is a great way to bring some of those hidden risks to light.

Questions to ask: What might go wrong? How can we address that ahead of time? How will we respond to negative events and problems?

Embrace Complexity and Uncertainty

Organisational change is inherently complex and uncertain. Leaders need to embrace this reality and be comfortable operating in ambiguous environments. Systems thinking encourages a flexible and adaptive mindset by holding multiple potential futures in hand, and not being rigidly fixated on things going a particular way.

Questions to ask: How many different paths are their to our desired future? What are the signs we might need to change our approach?

Conclusion

Things have never been more up in the air. If you're a leader, you're leading change - and if you can do it well, you've unlocked an incredible competitive career advantage.

By embracing systems thinking, leaders gain a deeper understanding of their organisations and drive meaningful change that positively impacts the bottom line and the wellbeing and engagement of their teams.

So, if you're a leader looking to make a lasting impact, consider learning how you can master systems thinking in your change toolkit.

Even better, enrol in Not An MBA ! You'll learn simple but effective tools for applying systems thinking to everyday problems, and accelerate progress toward your most important strategic goals.