Systems thinking utilizes habits, tools and concepts to develop an understanding of the interdependent structures of dynamic systems. When individuals have a better understanding of systems, they are better able to identify the leverage points that lead to desired outcomes. Systems thinking is an essential component of a learning organization. It provides a method of critical thinking by which you analyse the relationships between the system's parts in order to understand a situation for better decision-making. In the context of a business, a system is one consisting of many parts such as: employees, management, capital, equipment, and products, as well as external entities such as regulators, customers, suppliers and competitors. To see additional definitions of systems thinking, select "Definitions" in the menu.
The Systems Thinking Approach
The approach of systems thinking is fundamentally different from that of traditional forms of analysis. Traditional analysis focuses on the separating the individual pieces of what is being studied; in fact, the word "analysis" actually comes from the root meaning "to break into constituent parts". Systems thinking, in contrast, focuses on how the thing being studied interacts with the other constituents of the system - a set of elements that interact to produce behaviour - of which it is a part. This means that instead of isolating smaller and smaller parts of the system being studied, systems thinking works by expanding its view to take into account larger and larger numbers of interactions as an issue is being studied. This results in sometimes strikingly different conclusions than those generated by traditional forms of analysis, especially when what is being studied is dynamically complex or has a great deal of feedback from other sources, internal or external - for example, a business!
Examples of areas where systems thinking has proven its value include:
- Complex problems that involve helping many actors see the "big picture" and not just their part of it
- Recurring problems or those that have been made worse by past attempts to fix them
- Issues where an action affects (or is affected by) the environment surrounding the issue, either the natural environment or the competitive environment
- Problems whose solutions are not obvious