Systems Thinking: What Is It?
By Matt Richter
BASIC DEFINITIONS OF A SIMPLE SYSTEM
Start by thinking of a system as a circle– or in this case, more precisely, an oval.
The items inside a system are the elements. They can be people, other events, activities, resources, etc.
One element will affect or influence another or several elements.
And of course, other elements can influence or affect that one which you may not even notice!
You can also have elements affect each other.
The way an element influences or affects another element is through processes. The input is the influencing element. For example, French regulations on how degree issuing schools can hand out diplomas is an input for me on how I design a course at the business school I teach at. That body of rules informs how I work with my students. The process is how the inputs engage with me. For me, my school's instructional procedures dictate HOW I build my course according to the rules -- and, -- and here is an incredibly important part of systems thinking– other inputs. Other inputs might include in this example, instructional design principles, my own experiences, other instructors and professors with whom I collaborate with on this course, and more.
You can also think of these interactions as WHATs– the elements in the systems and HOWs the methods by which they interact with each other.
Now, if we go back to our simple map… in reality, very often there is more interactivity, more interconnections than we anticipate, or assume. Sometimes, we assume that influence is just one-way.
Now, take the main focus of this simple system highlighted by the small circle. Note that only five of the elements directly input it. Those further away may only influence indirectly by influencing those more directly that influence our guy directly.
Phew!
You can start to see how this gets complex quickly.
AN IMPOLITE ILLUSTRATION
Let’s start off with a very important question. Do you know how a toilet works? Don’t think too hard about your answer. If you were at a cocktail party or at the pub and someone said… “Hey, do you know how a toilet works?”, what would you say?
If you are like most people, you would claim knowledge of toilet mechanics.
Are you like most people? I know, at least in the case of toilet expertise, I am. I am pretty confident I know how a toilet works!
But, unfortunately, like most positive claimants, I probably suffer from what psychologists, Dan Simons and Christopher Chabris call an illusion of knowledge (with a callout to Rebecca Lawson and her work on how people think they understand bicycles). Meaning, I have an overabundance of confidence that I know something, when I really don’t know much at all. I kind of know essentially what a toilet does and I know there is some water, a flush-y thing, and maybe a rubber thingie, as well.
(Please note that if you are a plumber… then this toilet metaphor is unlikely going to work for you!)
I am as expert at what makes a toilet work as much as Fido here, sitting on that toilet.
This is a simple toilet perspective looking into the tank. Don’t ask me what these things do, I have no clue. I’m like Fido, remember. But, if you are interested, here are two videos… one more simple than the other, on the inner workings of a toilet. https://youtu.be/hAxAyoSMQhI and https://youtu.be/UwoCeaHNhQk.
So, a toilet is an example what we call a system.
As mentioned more simply above, a system is a collection of parts and individual activities that collectively, interrelatedly, yield an outcome greater than those individual parts. In a good system, all the individual parts are needed at varying degrees for success. Take away that blue thingie, and the whole system will fall apart.
THOUGHT EXPERIMENT
Think about your job. In your head focus on a single task you do on a regular basis. What is it?
Say it out loud.
Good.
For me, I design courses on systems thinking (and other topics) for business schools (and others).
Now, ask yourself how this task fits into a bigger objective. A bigger picture.
For me, my courses fit into an MBA program curriculum.
What bigger objective, what process, what bigger picture does your task fit into?
Pause and say it out loud.
Welcome back.
For me, school is the system. My course on Systems Thinking is a part of that. My course is like that blue thingie in the toilet-- assuming it is an integral part of the curriculum.
Your big picture is the system in your world.
But systems… all systems… are a part of bigger systems. More complex systems.
BACK TO OUR TOILET
Your toilet (the very, very simple system) is a part of the plumbing system in the house (a more complex system). The plumbing system is a part of the greater sewage and water systems in your town (a much bigger complex system).
In other words your simple system… your toilet… is always going to be a part of something– actually many things– that are bigger than what you see.
As alluded to, this is called a complex system. A complex systems is a great number of related, but distinct elements-– parts– simple systems– toilets– with intricate relationships and interconnections. They are hard to see… hard to define… due to the dependencies, competitions, said relationships, and many other factors we will get into later. Navigating complex systems requires one to be skilled at systems thinking.
Systems Thinking is simply how to make sense of the complexity.
The trick is we all too often don’t understand the simple system, or systems we engage in daily. We don’t understand how our part of the system fits in. More importantly we think we do, and that overconfidence can get us in trouble. Still more importantly, we neglect to see and comprehend how our simple systems fits into the bigger systems all around us. We fail to see the inputs, the outputs, the consequences, etc.
We are the horse with blinders on.
We are Fido sitting on the toilet.
Which is why we need systems thinking!
SYSTEMS THINKING IS HOW WE MAKE SENSE OF THOSE SYSTEMS WE WORK IN, CREATE, OR THAT RUB UP AGAINST OUR OWN.
Systems thinking is the discipline, the holistic process we will use to understand and expand our horizons. To hopefully make sense out of the overwhelming. To see the possibilities and the threats. To explore… to fail… to learn.
In the end, systems thinking, is the essence of organizational learning. It is making meaning out of seeming disorder. It is finding solutions to wicked problems. And more…
So the system makes things manageable. Complex systems make big stuff doable and possible. Systems Thinking is required to analyze… to see… to make order out of what is around us… to manage the inherent complexity of our lives.
A BETTER EXAMPLE
A great example of influencers in a system affecting the central part of that system is the great toilet paper debacle during COVID. (Thought I was done with toilets, huh? 😁)
While many assumed that the great 2020 toilet paper shortage in the US (Moore, 2020) was a result of supply-chain issues, this actually wasn’t the case. In fact, 99% of all toilet paper in the US is manufactured in the US. No international supply chain issues. The debacle actually has to do with inputs and outputs further out in the process influencing influencers. In 2020, grocers, who are the largest retailers of toilet paper are direct influencers in the system. Their process was to keep only a few weeks’ worth of paper in their stockrooms. But the end users (further out in the system changed their buying habits as a result of fear and the assumption toilet paper would be unavailable (a self-fulfilling prophecy, mind you). And since folks were staying home, the user demand for commercially bought toilet paper plummeted. Commercial toilet paper (TP for offices and other public places) is made typically in different factories. And of course with people staying home due to the COVID protocols, they were using more toilet paper at home than they typically would have done so.
In other words, an event (COVID) led people in the system (USERS) to change how they engaged in the system (BUYING TOILET PAPER) causing others in the system (RESELLERS) to have to notice the change in behavior of their buyers, leading them to put on new requirements of their suppliers– who were not set up to quickly adapt, and so forth.
But, this is my analysis (and that of several journalists) of what is called the system dynamics– the adaptive and organic shifts that often occur in a system– the changes that happen.
My analysis is one type of systems thinking.
As you can see, the narrative for what is going on is not just complex but perilously dependent on how accurate my data, my information, is about this system and the toilet paper shortage. And, an overly simplistic analysis can lead to very bad decisions. For example, if I went with the faulty assumption the shortage was internationally supply chain related, I might make a host of decisions that would lead to more problems.
Or, I might over complicate my analysis and over react in a different way.
OTHER FACTORS
THE KEY TO SYSTEMS THINKING IS TO DETERMINE HOW THE ELEMENTS IN A SYSTEM AFFECT EACH OTHER.
So, as we consider the interconnections of our events, we need to factor in three areas:
How the people in the system engage with each other. Those aforementioned RELATIONSHIPSamong the various elements in the system. Why? Because humans have a tendency to screw up everything!
THE HISTORICAL. We need to understand what happened in the past that got us here today.
And think tomorrow… but take a slightly negative view… think about what could go wrong. What are the risks we need to consider that can affect our system? RISK MANAGEMENT— or, future, potential problems.
But wait! There’s more to it!
Systems thinking– especially as we delve into the interconnectivity amongst the various elements requires us to become aware of many aspects of the relationships we may or may not think about in our own, personal considerations. In other words, the HUMAN FACTORS.
MOTIVATION
POLITICS
TRUST AMONGST PLAYERS IN THE SYSTEM
We need to consider the motivation of the different players. We need to understand why those involved do what they do. For example, a simple difference between their goals and yours can completely derail a system.
Politics is defined as the interplay between two or more people engaged with each other. Politics is by itself neither good or bad, but can be applied ethically, amorally, procedurally effectively or ineffectively. Navigating the politics within your system is essential because if you just rely on the logic of the procedures used within the system, you may miss why there is a failure. In other words, politics is the human component of the formula that makes up a system.
Ok… I know… trust is inherently a component within the realm of politics. But it is a BIG ONE! So, let’s call it out separately for kicks and giggles. A lot of behavior is often driven by trust or a lack of trust. But, as a systems thinker, do you know the various factors that embody trust? Well, that'll be a different article... but do keep trust in mind.
A failure to understand the interplay these human factors play can fully derail your system.
TWO MAJOR ACTIVITIES IN SYSTEMS THINKING
I’m a big fan of James Burke’s CONNECTIONS programs. I highly recommend them when you have some time. Burke is a science journalist who explores the interconnections of something very disparate from something else. He then shows how the two are connected by one event in the past leading to several in the future that lead to more events and still more. That you don’t get where we are today– your system, without building on what came in the past. Burke states that people only know what they know at the time. They have no idea ultimately where their actions will lead. Predictions and forecasts are merely conjecture. And rarely are we aware of how we got where we are.
Why does this matter? Because it is the argument for us to engage to two activities.
The first is ROOT CAUSE ANALYSIS– something we will dive into deeply in a future article. Root cause analysis is the study of exactly what Burke claims most of us don’t understand. How we got where we are. It is the study of why something actually is happening and the factors that support (or undermine) it continue. Good systems thinkers become good root cause analyzers.
What this means is that a big part of systems thinking is problems solving, and more importantly, critical thinking.
And the other tool we will use as we explore how the various elements in our system interconnect isRISK MANAGEMENT. A risk is a potential problem. It hasn’t happened yet. Our job is to forecast the likelihood a potential problem will happen and if it does, the impact that problem will have on our system.
Risks are people oriented… so remember those motivational, political, and trust-based factors.
They are operational… risks associated with the processes, resources, and other systems that affect ours going awry.
And of course, there are the ever-important financial risks.
For our purposes here, these risks tend to be either input or output oriented.
When forecasting risks, we need to see as many as possible. If we don’t, we won’t be hit by the ones we do see, we will be hit by the ones we miss. So, the more we can see, the better! Once we identify those risks, we rank them according to impact and likelihood. The dangerous ones require a mitigation plan (how we will avoid it) and contingencies plans (what we will do if the risk turns into a problem).
CONCLUSION... FOR NOW
One final thought on systems and their various components. I have mostly been talking about single systems-- the toilet, the more complex sewage systems in the beginning of this article, and the toilet paper conundrum later on. The graphics I shared in this article represent just one system, or at least one complex system.
Complex systems are big “things” made up of multiple systems. French society is a complex system. The university of Rochester (my alma mater) is a complex system. The MBA program where I teach is a complex system. Your work environments are complex systems. The way you may input your time at work is likely a simple system that is a part of the bigger payroll system that is a part of the bigger HR system that is a part of that company system. But it is essential for you to first understand how a simple system works.
So… more to come! A lot more!
REFERENCES
Cabrera, D. and Cabrera, L. (2018). Systems Thinking Made Simple: New Hope for Solving Wicked Problems. Plectra Publishing, New York.
Chabris, C, and Simons, D. (2010). The Invisible Gorilla: And Other Ways Our Intuitions Deceive Us. Harmony, New York.
Lawson, R. (2006). The Science of Cycology: Failures to Understand How Everyday Objects Work.Memory and Cognition 34: 1667–1775.
Meadows, D. (2008). Thinking in Systems. Chelsea Green Publishing, New York.
Moore, A. (2020). How the Coronavirus Created a Toilet Paper Shortage. College of Natural Resources News. https://cnr.ncsu.edu/news/2020/05/coronavirus-toilet-paper-shortage/
Rutherford, A. (2023). The Systems Thinker: Essential Thinking Skills for Solving Problems, Managing Chaos, and Creating Lasting Solutions in a Complex World. Independently published.