Systems archetypes at a glance

DENNISWRIGHT

Systems Thinking Basics

From Concepts to Causal Loops

Virginia Anderson AND Lauren Johnson

PEGASUS COMMUNICATIONS, INC.

Waltham, Massachusetts

© 1997 by Pegasus Communications, Inc. First printing March 1997

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Anderson, Virginia, 1947–

Systems Thinking Basics: From Concepts to Causal Loops / by Virginia Anderson and Lauren Johnson.

p. cm.

ISBN 1-883823-12-9

1. Industrial management—Case studies—Problems, exercises, etc.

2. Systems analysis—Problems, exercises, etc. 3. Decision making—exercises, etc.

I. Johnson, Lauren. II. Title.

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To the Reader: Why Use This Book? vii

SECTION 1 WHAT ARE SYSTEMS? 1

What Is a System? 2

Events, Patterns, Structure 5

L E A R N I N G A C T I V I T I E S 10 1: Identifying Systems 10 2: Reflecting on System Characteristics 13 3: Understanding System Feedback 14

SECTION 2 WHAT IS SYSTEMS THINKING? 17

The Principles of Systems Thinking 18

Systems Thinking as a Special Language 20

L E A R N I N G A C T I V I T I E S 22 1: Stretching the Timeline 22 2: The Shape of the Problem 25 3: Is Time on Your Side? 29 4: From Short Term to Long Term 30 5: In the Midst of a Problem 34

SECTION 3 UNCOVERING SYSTEMIC STRUCTURES: DRAWING BEHAVIOR OVER TIME GRAPHS 37

Formulating a Problem 38

Identifying Variables 40

Drawing Behavior Over Time Graphs 42

L E A R N I N G A C T I V I T I E S 45 1: The Problem with Price Promotions 45 2: The Case of the Energy Drain 46 3: The Case of the Audio-Electronic Roller Coaster 48

v

C O N T E N T S

SECTION 4 UNCOVERING SYSTEMIC STRUCTURES: BUILDING CAUSAL LOOP DIAGRAMS 51

Anatomy of a Causal Loop Diagram 52

Building a Causal Loop Diagram 58

About Multiloop Diagrams 64

L E A R N I N G A C T I V I T I E S 65 1: The Case of the Plateauing Profits 65 2: The Case of the Collapsing Banks 66 3: The “Organic To Go” Story 67 4: The Case of the Restricted Revenues 70 5: The All-for-One Cooperative 73 6: The Problem with Used CDs 75

SECTION 5 COMPLEX SYSTEMS 77

Characteristics of Complex Systems 78

The Strengths and Weaknesses of Complex Systems 79

ComputeFast: The Story of a Complex System 80

SECTION 6 FROM LOOPS TO LEVERAGE: APPLYING AND PRACTICING SYSTEMS THINKING 87

The Do’s and Don’ts of Systems Thinking on the Job 88

Practicing Life-Long Systems Thinking 91

The Learning Journey 94

APPENDIX A: ADDITIONAL LEARNING ACTIVITIES 95

APPENDIX B: LEARNING ACTIVITY KEY POINTS AND SUGGESTED RESPONSES 105

APPENDIX C: A PALETTE OF SYSTEMS THINKING TOOLS 119

APPENDIX D: THE SYSTEMS ARCHETYPES 123

APPENDIX E: A GLOSSARY OF SYSTEMS THINKING TERMS 127

APPENDIX F: ADDITIONAL RESOURCES 131

vi CONTENTS

T O T H E R E A D E R

Why Use This Book?

C ongratulations! By picking up this book, you’ve taken the first step in learning to use the powerful array of systems thinking tools. These tools offer a fresh, highly effective way to grasp the complexities of organi-

zational life and to address the stubborn problems that often confront us in the business world. Systems Thinking Basics: From Concepts to Causal Loops is designed to help you discover the principles of systems and systems think- ing and begin actually using systems thinking tools. There is a broad palette of systems thinking tools available; this book emphasizes two foundational devices: behavior over time graphs and causal loop diagrams.

Why Systems Thinking?

Why take time out of your busy schedule to read this book? Because systems thinking offers a valuable new perspective on our most persistent organiza- tional problems and our role in them. One of the major points that systems thinking makes is that everything—and everyone—is interconnected in an infinitely complex network of systems. When we begin to see the world— and one another—through this “lens,” we start seeing our circumstances in a new light, taking more responsibility for our own role in problems, and identifying more effective ways of addressing recurring difficulties. Systems thinking has a power and a potential that, once you’ve been introduced, are hard to resist. You’ll learn more about the benefits of systems thinking in Section 2.

How to Use This Book

The world of systems and systems thinking marks a dramatic shift from the more linear, analytic way of thinking that many of us are used to. It’s espe- cially challenging to convey the abstract characteristics of systems in print. Because systems themselves are so complex and so interconnected with everything around them, it’s also impossible to capture any one entire sys- tem on paper. For this reason, the tools and activities in this book are meant to offer primarily a glimpse into systems behavior.

We also hope you will see the book as the starting point to a long, learn- ing-filled journey. Systems research and theories are constantly evolving, and the concepts and tools in this book offer only one of many methods for looking at the whole. When you finish the book, you can continue your adventure into exploring systems thinking tools by using some of the resources listed in Appendix F.

In writing Systems Thinking Basics, we not only needed to decide what tools to include; we had to choose a plan for sequencing the sections. We

vii

viii TO THE READER ➤ Why Use This Book?

opted for a format that allows each section to build on the one that came before, because that arrangement seemed best suited for new systems thinkers. For this reason, we recommend that you read the sections in numerical order, although you are certainly free to choose a different order depending on your interests and your familiarity with the material. We also hope that you’ll work as often as possible with others on the readings and activities—it’s when people use systems thinking tools together that these tools are their most potent.

Your journey through Systems Thinking Basics will begin with an explo- ration of the unique characteristics of systems (Section 1), and then move on to a definition of systems thinking and an explanation of its importance, especially to organizational life (Section 2). In sections 3 and 4, you will have the opportunity to create your own diagrams of systemic structures, step by step. Section 5 then gives you a taste of complex systems. Finally, Section 6 answers the question, “What next?,” by offering advice on prac- ticing systems thinking in your day-to-day life.

About the Learning Activities

Mastering systems thinking tools requires practice with lots of real-life examples. Accordingly, each section in this book contains a wealth of illus- trations from the business world. Most sections then present a series of learning activities that challenge you to apply your new knowledge. The learning activities can be done as self-study or in groups, but again, we encourage you to work in groups as much as possible. We invite you to share with each other your responses to the activities and the insights you gain as you work with the activities.

The learning activities range from reflection and discussion to graphing and diagramming, and are filled with case studies adapted from recent analyses published in leading business journals, including The Systems Thinker™ newsletter. There is also a section (Appendix A) that offers extra learning activities should you desire additional practice. For the majority of the learning activities, you can check your responses against the “Learning Activity Key Points and Suggested Responses” in Appendix B. Remember, however, that there is no one right way to describe and diagram a system. These activities, and the suggested responses, are meant to spark your imag- ination and serve as a starting point for you to think about systems.

Acknowledgments

The work contained in this book is built on the prior work of many others. First, we acknowledge Peter Senge for introducing the concept of systems thinking to a broad management audience in The Fifth Discipline. In many ways, the tremendous success of his book is what made the writing of this workbook possible in the first place. We also acknowledge the many people who were involved in the development of systems thinking principles, con- cepts, and tools before they ever appeared in The Fifth Discipline, including John Sterman, Dennis Meadows, Dana Meadows, Michael Goodman, David Kreutzer, Jenny Kemeny, Jack Pugh, George Richardson, James Lyneis,

TO THE READER ➤ Why Use This Book? ix

Nathaniel Mass, Barry Richmond, and others. In addition, we thank all the systems thinking workshop participants and contributors to The Systems Thinker newsletter, who have given us valuable insights into understanding and applying systems thinking to organizational life. Finally, we honor Jay Forrester’s brilliance and insight in founding the field of system dynamics, which we believe has much to contribute to the practice of management.

We’d like to thank the following colleagues who kindly reviewed the manuscript for this book. Each of them offered valuable insights and thoughtful suggestions that greatly strengthened the book:

Turina Bakken, MAQIN

Polly Bashore, General Motors

Dave Buffenbarger, New Dimensions in Learning

Lou Ann Daly, Innovation Associates

Richard Karash, Speaker, Facilitator, Trainer, “Towards Learning Organizations”

Daniel H. Kim, The MIT Center for Organizational Learning, and Pegasus Communications

Keith Perry, McClellan Air Force Base

Kellie Wardman O’Reilly, Pegasus Communications

Carol Ann Zulauf, Suffolk University

and, finally, all the folks at Coca-Cola:

Michael Canning, Connie Carroad, Dianne Culhane, Teresa Hogan, Scott Moyer, Cheryl Oates, and Rodolfo Salgado

We hope you’ll find your adventure into systems thinking stimulatingand rewarding on both a personal and a professional level. We also invite you to contact us with any comments, questions, or suggestions about using this book or about systems thinking in general.

Bon voyage!

Virginia (“Prinny”) Anderson (VRAnderson@aol.com) Lauren Johnson (scott-laurie@att.net)

S E C T I O N 1

What Are Systems?

W elcome to the world of systems and systems thinking! 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 fam- ily 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 section 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.

1

2 SECTION 1 ➤ What Are Systems?

WHAT IS A SYSTEM?

A system is a group of interacting, interrelated, or interdependent compo- nents 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; rela- tionships; 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 com- pany. A system such as the R&D group always has a specific purpose in rela- tion to an even larger system—in this case, the entire organization (Figure 1.1, “Interdependent Systems Within Interdependent Systems”).

Your body is another example. Within it, your circulatory system deliv- ers 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.

Equipment

People

Pr oc

es se

s

R & D

Production

Sales

Company

F I G U R E 1 . 1

Interdependent Systems Within Interdependent Systems

What Is a System? 3

And industry is interdependent with an even larger system—the econ- omy—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 sys- tems, 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 sys- tem. 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 chang- ing the essential nature of the collection of fruit.

However, in a system such as a company, imagine what would happen if the parts shifted around randomly—if, for instance, the accounting spe- cialists suddenly decided to work on the production line, and the produc- tion specialists decided to write marketing copy. Of course, people do change jobs within their companies, but only after training and much tran- sition time. Most companies function best when people are working in jobs

4 SECTION 1 ➤ What Are Systems?

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 pur- pose, 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 auto- matically 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 organiza- tion 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 expendi- tures 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 suppli- ers 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 rev- enue 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, imag- ine 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 make adjustments to correct the degree of your turn. The most important feature of feedback is that it provides the catalyst for a change in behavior.

What Is a System? 5

A system has feedback within itself. But because all systems are part of larger systems, a system also has feedback between itself and external sys- tems. In some systems, the feedback and adjustment processes happen so 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 prob- lems 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 finan- cially 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 per- sists, 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 this 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, struc- ture is invisible. (As we’ll see later, however, there are ways to draw our understanding of a system’s structure.)

6 SECTION 1 ➤ What Are Systems?

F I G U R E 1 . 2

The Events / Patterns / Structure Pyram

Events

Patterns

Structure

Why is it important to understand a system’s structure? Because it’s sys- tem 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.

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, solu- tions 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 think- ing perspective. Why? Because it has solved the immediate problem but hasn’t changed the underlying structure that caused the fire, such as inad- equate 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

id

F I G U R E 1 . 3

The Tip of the Pyramid

Events

F I G U R E 1 . 4

Moving from Events to Patterns

Events

Patterns

Events, Patterns, Structure 7

F I G U R E 1 . 5

Graphs of Patterns

Time Time Time

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% P

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O ve

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F I G U R E 1 . 6

The Complete Pyramid

Events

Patterns

Structure

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.

In each of the above examples, you could draw a simple graph to repre- sent 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”).

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.

As we saw earlier, all systems are systems, so it’s impossible to capt entirety on paper. Nevertheless, t depicting parts of systems in a dia glimpse how a system works and its behavior. One such way is to c diagram, or CLD. (Figure 1.7 is an kind of drawing.) These diagrams place for discussing and thinking events or patterns, and for openin addressing problems differently. I help you gain insight into system they identify ways you might cha behavior. After all, it is changes m level, rather than at the pattern o often prove to be the most long-l sustaining.

It’s important to remember, h representations of systems are jus

8 SECTION 1 ➤ What Are Systems?

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 struc- tural 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.

Engineers’ Workloads

Morale

Engineers Leaving

Administrative Assistants Laid Off

$ $ $ Budget for

Engineering Group

X X budget cuts lead to

which increases

which damages which leads to

which adds even more to

F I G U R E 1 . 7

The Engineering Exodus

part of larger ure any system in its here are ways of gram, in order to

how you might alter reate a causal loop example of this provide a starting about problematic g the door to

n particular, they ic structures, and nge the system’s ade at the system r event level, that asting and self-

owever, that graphic t that: representa-

A NOTE ABOUT DIAGRAMMING SYSTEMS

tions. As you will see later in this book, there is no one right way to draw a causal loop diagram or even to describe an entire system. Any diagram that you draw reflects your own assumptions about the system, and is limited to what you define as the most pertinent part of the system you’re studying. This is why working in groups is so beneficial—you gain insights from the multiple perspectives.

Later in this book, you’ll have the opportunity to practice drawing CLDs. As with all the activities in this book, we encourage you to work as a group whenever possible in creating CLDs. A causal loop diagram generated by a group is especially valuable because it reveals the interplay of each group member’s perspective on the system in question. The process of constructing the drawing encourages group members to share their assumptions and under- standings about the issue at hand. The more this kind of sharing happens, the more insights get sparked.

Events, Patterns, Structure 9

F I G U R E 1 . 8

Levels of Understanding

Events

Patterns

Structure

Action Mode

React!

Adapt!

Create Change!

How would you fight fires at the pattern level? You would begin antici- pating 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 effec- tively 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 actu- ally 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 level are creative, because they help you to shape a dif- ferent 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.

Questions You Would Ask

Way of Perceiving

Time Orientation

“What’s the fastest way to react to

this event now?” Present Witness event

“What kinds of trends or patterns of events seem to be recurring?”

“What structures are in place that are causing

these patterns?”

Measure or track patterns of events

Causal loop diagrams and other systems

thinking tools Future

L E A R N I N G A C T I V I T I E S

These activities can be done either by yourself or with a group. For self-study, you might con- sider 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 mater- ial ahead of the meeting time. Then go over it when you meet, answering questions and looking for additional examples to help illustrate key points.

ACTIVITY 1 I D E N T I F Y I N G S Y S T E M S

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 impor- tant 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:

10 SECTION 1 ➤ What Are Systems?

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:

Intangible components:

Larger system:

Your Second System:

Purpose:

Components:

Learning Activities 11

Intangible components:

Larger system:

Your Third System:

Purpose:

Components:

Intangible components:

Larger system:

12 SECTION 1 ➤ What Are Systems?

ACTIVITY 2 R E F L E C T I N G O N S Y S T E M C H A 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?

Learning Activities 13

4. Is there any way that actions taken to solve the problem might actually be making things worse? If so, how?

ACTIVITY 3 U N D E R S T A N D I N G S Y S T E M F E E D B A C K

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 connections. 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.

F I G U R E 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.

14 SECTION 1 ➤ What Are Systems?

People Time

Information

Information Sharing

Interest in Sharing

Information

Now try diagramming your three systems:

Your First System:

Your Second System:

Learning Activities 15

Your Third System:

Finally, try trading diagrams with someone else. Take turns explaining the diagrams and your understanding of the systems you drew.

16 SECTION 1 ➤ What Are Systems?

S E C T I O N 2

What Is Systems Thinking?

T 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 lan- guage and a set of tools better suited to the task. This is where systems thinking comes in.

In this section, we examine the foundational principles of systems thinking in more detail, and explore the special qualities of systems think- ing as a language. The learning activities at the end of the section will let you begin actually practicing systems thinking.

17

18 SECTION 2 ➤ What Is Systems Thinking?

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 nonmeasurable 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 influ- enced by them

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, how- ever, 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 per- spective, 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 cus- tomers. 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 installa- tion 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.

The Principles of Systems Thinking 19

Yet systems thinking shows that behavior that leads to short-term suc- cess 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, grab- bing 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 mak- ing 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 han- dle its human resource and training functions. In the short run, this sensi- ble 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 think- ing 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. Nonmeasurable 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 fig- ures and costs to harder-to-quantify information like morale and customer attitudes. Neither kind of data is better; both are important.

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, escalat- ing conflict between the purchasing and the production departments.

20 SECTION 2 ➤ What Is Systems Thinking?

We Are Part of the System

One of the more challenging systems thinking principles says that we usu- ally 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 coun- terproductive 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-rat- tling” 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.

Systems Thinking as a Special Language 21

• 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 comes back around to influence x.

• It has a precise set of rules that reduce the ambiguities and miscommu- nications 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 defen- siveness 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 per- ceptions into explicit pictures that can reveal subtle yet meaningful dif- ferences 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.

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!

ACTIVITY 1 S T R E T C H I N G T H E T I M E L I N E

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.

22 SECTION 2 ➤ What Is Systems Thinking?

L E A R N I N G A C T I V I T I E S

3. Make a mark on the paper to symbolize the present, and name the issue in one or two words. For example:

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.

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.

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.”

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.

X Sales

dropping New product

late to market

PRESENTBEGINNING

Mistakes made in product

development

EARLIER BEGINNING

6 months10 months

X Sales

dropping New product

late to market

PRESENTBEGINNINGEARLIER BEGINNING

6 months10 months

X Sales

dropping New product

late to market

PRESENTBEGINNING

6 months

X Sales

dropping

PRESENTBEGINNING

6 months

X Sales

dropping

PRESENT

Learning Activities 23

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?

X Sales

dropping New product

late to market

PRESENTBEGINNING

Mistakes made in product

development

EARLIER BEGINNING

6 months10 months

Not enough product

developers

EARLIEST BEGINNING

1.5 years

24 SECTION 2 ➤ What Is Systems Thinking?

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 T H E S H A P E O F T H 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

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

Learning Activities 25

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.”

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.”

26 SECTION 2 ➤ What Is Systems Thinking?

F I G U R E 2 . 2

The Circle Expands

Training: Work

Overload

New Hires

Managers

Instructors

Administrators Developers

Sales People

Production Workers

Training: Work

Overload

F I G U R E 2 . 1

The Center Circle

4. If there are any other connections beyond what you’ve already drawn, map them in. The con- nections 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.”

Learning Activities 27

F I G U R E 2 . 3

Even More Connections

Training: Group

Overload

New Hires

Managers

Instructors

AdministratorsDevelopers

Sales People

Production Workers

Customers

Departments

Other Courses

Maintenance Department

Accounting Department

F I G U R E 2 . 4

The Final Picture

Training: Group

Overload

New Hires

Managers

Instructors

AdministratorsDevelopers

Sales People

Production Workers

Customers

Departments

Other Courses

Maintenance Department

Accounting Department

Quality

Revenues

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 cir- cles, as in Figure 2.3, “Even More Connections.”

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?

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.

28 SECTION 2 ➤ What Is Systems Thinking?

ACTIVITY 3 I S T I M E O N Y O U R S I D E ?

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 mis-

sion 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, rev- enue, 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)

Learning Activities 29

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 F R O M S H O R T T E R M T O L O N G T E R M

Purpose: To discover which aspects of your work are short term and which are long term

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

30 SECTION 2 ➤ What Is Systems Thinking?

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?

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?

Learning Activities 31

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?

32 SECTION 2 ➤ What Is Systems Thinking?

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?

Learning Activities 33

11. When you made your list, was there a point at which your vision of what you want to accom- plish 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 T H E M I D S 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.

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.

34 SECTION 2 ➤ What Is Systems Thinking?

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 communi- cating 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?

Learning Activities 35

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?

36 SECTION 2 ➤ What Is Systems Thinking?

S E C T I O N 3

Uncovering Systemic Structures: Drawing Behavior Over Time Graphs

I n sections 1 and 2, we introduced the idea that systemic structures gen- erate patterns of behavior and are therefore at 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

Section 4 then takes you through the next step in identifying systemic structure: building causal loop diagrams.

As you read Section 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 apply- ing systems thinking in real life is often messy and leads to lots of twists and turns. Thinking systemically always involves an iterative process of

37

38 SECTION 3 ➤ Uncovering Systemic Structures

Time

Oscillation

Time

An increase that then levels off

F I G U R E 3 . 1

Patterns of Problem Behavior

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.

FORMULATING A PROBLEM

Let’s say you’ve just finished a course on systems thinking and have identi- fied 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 clas- sic 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

TimeTime

Time Time

Intervention

A steeply rising increase A steeply falling decrease

No change evident after specific interventions

Sharp ups and downs or “boom and bust” cycles

Formulating a Problem 39

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 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 cam- paigns, 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 develop- ing 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 analy- sis 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, pro- ceed with two or three formulations of the problem and learn from the dif- ferent 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 ques- tions, share your perspectives on the issue, and revise your problem state- ment several—sometimes many—times.

Here are some examples of problem statements:

• In our blood lab, errors in sample analyses have doubled over the last eight months.

• Customer-service problems have increased 25 percent over the last year.

• Before our last two training conferences, we failed to return one-third of the registration confirmations to our customers on time.

Problem statements often include the following components (though they don’t have to):

• the behavior (example: customer-service problems)

• a description of the behavior over time (example: the problems have increased)

40 SECTION 3 ➤ Uncovering Systemic Structures

• a measurement of how the behavior has changed over time (example: the problems have increased 25 percent)

• the time frame of the behavior (example: the problems have increased 25 percent in the last year)

IDENTIFYING VARIABLES

Once you formulate the problem, it’s time to identify its key variables. (Remember, variables are the components of the problem whose value can vary over time; that is, go up or down.) To begin this process, tell the story of the problem briefly. Telling the story means building on your problem statement—fleshing out some of the details so that you have a fuller picture of the issue and the variables involved.

Example ➤ The Case of A-to-Z At A-to-Z, a semiconductor company, we’ve been puzzling over a series of events that occurred in our most recent quarter. We posted record sales for the quarter, with the majority of our sales force meeting or exceeding sales quotas. All products scheduled for release were launched, with additional products ready for early release in the next quarter. At the same time, however, our profits actually declined for the first time in our company’s history, as overhead costs as a percentage of sales reached an all-time high.

What are the pertinent variables in A-to-Z’s story? Here’s the list that A-to- Z’s managers identified after some discussion: