Introduction

to
Systems Thinking
The significant problems we face today
cannot be solved at the same level of
thinking at which they were created.

Albert Einstein
A system is a group of interacting, interrelated, and interdependent
components that form a complex and unified
whole. R. Ross

A system is a perceived whole whose elements hang together because

they continually affect each other over time and operate
toward a common purpose. A. Kleiner

A system is an entity that maintains its existence and functions as a

whole through the interaction of it parts. J. OConnor and I.
McDermott

Systems thinking is a discipline for seeing wholes, recognizing patterns

and interrelationships, and learning how to structure those
interrelationships in more effective and efficient ways. P.
Senge and C. Lannon-Kim

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 WHAT IS SYSTEMS THINKING?
Founded in 1956 by MIT professor, Jay Forrester.
System thinking allows people to make their understanding
of social system explicit and improve them in the same
way that people use engineering principles to improve their
understanding of mechanical system.

It is use to:-

Examining how we create our own problems

Seeing the big picture
Structure influences performance
 A system is something that maintains its existence and functions
as a whole through the interaction of its parts. (a system of
people is an organization). Systems have input processes, outputs
and outcomes, with ongoing feedback among these various
parts. If one part of the system is removed, the nature of the
system is changed.

Systems range from very simple to very complex. There are

numerous types of systems. The human body is a good example
of a system. There are biological systems (the heart, etc.),
mechanical systems (thermostat, etc.), human/mechanical
systems (riding a bicycle, etc.), ecological systems (predator/prey,
etc.), and social systems (groups, supply and demand,
organization etc.).

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Complex systems, such as social systems, are comprised of
numerous subsystems, as well. These subsystems are integrated
to accomplish the overall goal of the larger system. Each
subsystem has its own boundaries of sorts, and includes various
inputs, processes, outputs and outcomes geared to accomplish an
overall goal for the subsystem.

Is A pile of sand a system ?

It is not a system. If one removes a sand particle, you still have a

pile of sand. However, a functioning car is a system. Remove the
carburetor and you no longer have a working car.

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 SYSTEM THINKING APPROACH
Traditional 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
Systems thinking, in contrast,
focuses on how the thing being
studied interacts with the other
constituents of the systema set
of elements that interact to
produce behaviorof which it is a
part.
Examples of area System 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
 Systems Thinking
Learning to see the world systemically
Encourages us to see the whole as well as the parts.

WHOLE PARTS
Holistic Thinking

!!!

?? ??
Multiple (often)
restricted views
 Systems Thinking
Learning to see the world systemically

Systems thinking focuses on how the thing being studied interacts

with the other constituents of the system. 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.

The nature of systems thinking makes the approach very effective

for the most difficult types of problems to solve: those involving
complex issues, those that depend a great deal on the past or on the
actions of others, and those stemming from ineffective
coordination among those involved.
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 Systems Thinking
Helps us explore interdependencies and looking for patterns.

Max Barret Webecoist.com

 Systems Thinking
Helps us understand feedback structures that
change systems over time.

River Fractal - Hctor Garrido

 Systems Thinking
Helps us understand results of our decisions

http://www.systems-thinking.org/theWay/theWay.htm
System
A system is an interrelated set of business procedures
used within one business unit working together for a
purpose
A system has (six to) nine characteristics
A system exists within an environment
A boundary separates a system from its environment
System Components
Interrelated Components
Boundary
Purpose
Environment
Interfaces
Input
Output
Constraints

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Characteristics of a System

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Systems Thinking
Important System Concepts

Decomposition
-- The process of breaking down a system into smaller
components
-- Allows the systems analyst to:
Break a system into small, manageable subsystems
Focus on one area at a time
Concentrate on component pertinent to one group of users
Build different components at independent times

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Systems Thinking
Important System Concepts

Modularity
Process of dividing a system into modules of a relatively uniform size
Modules simplify system design

Coupling
Subsystems that are dependent upon each other are coupled

Cohesion
Extent to which a subsystem performs a single function

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Systems Thinking
Important System Concepts

Logical vs. Physical Modeling

Logical System Description
-- Portrays the purpose and function of the system
-- Does not tie the description to a specific physical
implementation

Physical System Description

Focuses on how the system will be materially constructed

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A (Partial) List of the Laws of Systems Thinking

Today's problems come from yesterday's

"solutions" !
For example a new Manager is told to control high inventory costs.
He solves the problem except that the sales team is now spending 20%
more time responding to angry complaints from customers who are
waiting for late shipments, and the rest of the time trying to convince
prospective customers that they can have any color they want so long as
its black. As a result sales are down.

Solutions that merely shift the problems from one part of the system to
another often go undetected because those who solved the first
problem are different folks than those who inherit the problem.

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A (Partial) List of the Laws of Systems Thinking

The harder you push, the harder the

system pushes back!
Another systems term for this is compensating feedback.
Most of us have experienced compensating feedback - the
harder we work to improve something, the more effort seems to
be required.

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A (Partial) List of the Laws of Systems Thinking

The easy way out usually leads back in !

We typically prefer to intervene in a system at the level of rules such
as information flow, organization structure, reward and control
systems. These elements are more visible and are easier to work.

However, if we look at interrelationships within systems such as

peoples deep-seated beliefs and attitudes, our leverage for effective
change increases. We then come closer to seeing the underlying
reasons why rules organizational structure and work processes take
their current form.

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A (Partial) List of the Laws of Systems Thinking

The cure can be worse than the disease!

Often the easy or familiar solution is very ineffective. Systems

thinking refers to short-term improvements leading to long-term
dependency as shifting the burden.

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 SYSTEMS THINKING TOOLS

Causal Loop Diagrams

A useful way to represent dynamic interrelationships

Provide a visual representation with which to

communicate that understanding

Make explicit one's understanding of a system

structure - Capture the mental model
Components of Causal Loop Diagrams
Variables - an element in a situation which may act or be
acted upon
Vary up or down over time (not an event)
Nouns or noun phrases (not action words)

Links / Arrows - show the relationship and the direction

of influence between variables

S's and O's - show the way one variable moves or changes
in relation to another
S or + stands for "same direction
O or - stands for "opposite direction

or B - Balancing feedback loop that seeks equilibrium

or R - Reinforcing feedback loop that amplifies
change
 Types of Causal Loop Diagrams
Reinforcing Loop

Structure Behavior Over Time

Employee
Supportive
Performance Perf. Behavior
S Level

Unsupportive
Supervisors
Behavior
Supportive
Behavior Time
 Types of Causal Loop Diagrams
Balancing Loop

Structure Behavior Over Time

Desired S
Discrepancy
Inventory
O Actual Inventory

100 ++
S
Desired Inventory
Actual Inventory 100

Inventory Adjustment 100 - -

S

Time
 SYSTEMS THINKING ARCHETYPES

A class of tools that capture the "common

stories in systems thinking

Powerful tools for diagnosing problems and

identifying high leverage interventions that
creates fundamental change
List of System Thinking Archetype

1. Fixes that Fail / Backfire

2. Limits to Growth/Success
3. Shifting the Burden / Addiction
4. Tragedy of the Commons
5. Drifting Goals
 1. Quick Fixes that Fail
S Behavior Over Time

Problem Fix
Symptom

O
Delay

S S
Time

Unintended
Consequences
 1. Fixes that Fail
Example:
An example would be fixing problem of a squeaky
wheel. Imagine someone who knows nothing about
mechanics, mistakenly grab a can of water and
splash it on the wheel. With great relief the
squeaking stop for a while, it will
return more loudly as
the water join forces
to rust the joint.
 1. Fixes that Fail
Prescriptive actions:
Increase awareness of the unintended
consequences
Cut back on the frequency with which you apply
the fix
Try to minimize the undesirable consequences
Reframe and address the root problem, give up the
fix that works only on the symtom
Breaking fixes that fail merely alleviating a
symptom, not really solving the problem. A two
pronged attack of applying fix and finding
fundamental solution will help to break the
problem.
 2. Limits to Growth

Structure Behavior Over Time

Burnout
S

Target Growing Action Perf.

Level
S Diminishing
O Returns
S
Corrective Positive
Action Reinforcement
Actual Performance
S

Time
2. Limits to Growth
 2. Limits to Growth
Example:
At the beginning of a quality improvement campaign,
significant gains in quality and productivity were
achieved. Once this achieved, the level of
improvements plateaus.
The next wave of improvements
are more complex and tougher to
manage. Later the lack of
organization-wide support leads to
limited/diminishing quality and
productivity of the whole organization (it becomes
stagnant or diminish).
 2. Limits to Growth
Prescriptive actions:
Beware of doing more of what worked in the past.
If your growth has stalled, look at both reinforcing
and balancing loops to try to find interrelationships
between your success strategies and potential
limits.
Look for other potential engines of growth.
The real leverage in limits to growth scenario lies in
its early phases.
The choice between plateauing or peaking often
depends on length of balancing loop delay and our
response to it.
 3. Shifting the Burden
Quick fixes Behavior Over Time
+
_ + Efforts Quick fix
_
Problem symptom
Problem/symptom Side effects
+
_ Capacity of system
_ to fix itself

+
Time
Source of problem
/Root cause _
 3. Shifting the Burden
Apply Patches Behavior Over Time
+
_ + Apply patches
_
Damage of road
Damage of Road Feeling of Okay
+
_ Proper road
_ construction

+
Proper Road Time
Contruction _
 3. Shifting the Burden
Example:
Problem of pot holes on the road. The problem is
handled by applying patches with immediate effect,
thereby solving the problem for a while. The primary
source of the problem is overlooked, that is the
overall quality of the road construction.
The origin of the problem
should be identified and
solved in the long-term run
or else the quality of the
road will be further
diminished.
 3. Shifting the Burden
Prescriptive actions:
Strengthen the long-term solution.
If possible, support only long-term solution. If
you must address the symtoms right away, do so
with restraint.
As you strengthen long-term capability, do what
you can to reduce dependency on the short-term
fix.
 4. Tragedy of the Commons

Net Gains
S
for A
S Resource A
As Activity S Limit
S S
O
Gain per Time
Total Activity Individual
S Activity
S B
Bs Activity
S
Net Gains
S Time
for B
 4. Tragedy of the Commons
Fixed S Investment
Budget in features
S

O Success from
Product
Investment O A
Investment S
in Integration
S Perceived Time
DELAY Success from
Integration
Investment
in Integration S B
Success from
Product O
O Investment
Time
S
Fixed Investment
S
Budget in features
 4. Tragedy of the Commons
Example:
Traffic jam in Kuala Lumpur. Everyone wishes to avoid
traffic jam will use the highway. At first there is room
for everyone, but after sometimes critical threshold has
been reached, each driver brings about
decrease in average speed.

As individuals each person feels he or

she is a victim of traffic but in effect
they all conspired as a group to create
traffic jam.
 4. Tragedy of the Commons
Prescriptive actions:

In any of the tragedy situations, there must be an

overriding legislation for common good.
To protect common resources some form
of regulation should be introduced.
Re-evaluate the nature of the commons to determine
if there are ways to replace, renew or substitute the
resources before it becomes depleted.
 5. Drifting Goals

Goal Pressure to
Lower Goal

S
S Goal

Gap
Time
S
O

Actual Corrective Action

Delay
 5. Drifting Goals

Perceived Desired Tolerance for

Temperature Temperature

O
S

Temperature Temp
Gap

S Time
O

Hop Out
 5. Drifting Goals
Example:
If you put a frog in cold water and slowly bring
the water to boil the frog will jump out when it
gets uncomfortable or even died in the boiling
water
If you put a frog in boiling water,
it will croak IMMEDIATELY.
 5. Drifting Goals
Prescriptive actions:

Establish a clear transition plan from current reality

to the goal including realistic timeframe to achieve
the goal.
Determine whether the drift in performance is the
result of conflicts between the stated goal and
implicit goals in the system.
Anchor the goal to an external frame of reference
(benchmarking).
Systems Thinking
Case Study

Crop Damaging by Insects

Reducing Crop Damage by Insects:

When an insect is eating a crop, the conventional

response is to spray the crop with a pesticide
designed to kill that insect.
Putting aside the limited effectiveness of some
pesticides and the water and soil pollution they can
cause, imagine a perfect pesticide that kills all of the
insects against which it is used and which has no
side effects on air, water, or soil.
Is using this pesticide likely to make the farmer or
company whose crops are being eaten better off?
 Reducing Crop Damage by Insects:
If we represent the thinking used by those
applying the pesticides, it would look like this:

Pesticide O Insects
Application Damaging Crops

1. The letter indicates how the two variables are related: an s means they
change in the same direction - if one goes up then the other goes up, and
an o means they change in the opposite direction - if one goes up then
the other goes down (or vice versa).
2. This diagram is read a change in the amount of pesticide applied causes
the number of insects damaging crops to change in the opposite
direction.
3. The belief being represented here is that as the amount of pesticide
applied increases, the number of insects damaging crops decreases.
Reducing Crop Damage by Insects:
Number of Insect A
Damaging Crop
O
O

Number of Insect B
Pesticide
Application

Number of Insect B
S Damaging Crop
Total number of
Insects damaging crop

S
 Reducing Crop Damage by Insects:
4. The problem of crop damage due to insects often does get better - in the
short term.
5. Unfortunately, what frequently happens is that in following years the
problem of crop damage gets worse and worse and the pesticide that
formerly seemed so effective does not seem to help anymore.
6. This is because the insect A that was eating the crops was controlling the
population of another insect B, either by preying on it or by competing with
it.
7. When the pesticide kills the insects A that were eating the crops, it
eliminates the control that those insects were applying on the population of
the other insects, insects B).
8. Then the population of the insects B that were being controlled explodes
and continue to damage the crops.
Reducing Crop Damage by Insects:

So now how do you solve the problem

of Insect B damaging the crop?

Find the solution..

Reducing Crop Damage by Insects

The solution:

With this picture of the system in mind, other

actions with better long-term results have been
developed, such as Integrated Pest Management,
which includes controlling the insect eating the
crops by introducing more of its predators into the
area. These methods have been proven effective in
studies conducted by MIT, the National Academy
of Sciences, and others, and they also avoid
running the risk of soil and water pollution.
To more about Systems Thinking,
read this book!

THE FIFTH DISCIPLINES

Personal
Mastery

Shared Systems Mental

Vision Thinking Models

Team
Learning
 References
Warfield, J. Societal Systems, Intersystems, 1989.
Joseph OConnor & Ian McDermott. The Art of Systems Thinking,
Thorsons, 1997.
Senge, P.M.
The Fifth Discipline: The Art & Practice of the Learning Organization,
Doubleday, 1990.
The Fifth Discipline Fieldbook: Strategies and Tools for Building A
Learning Organization, Doubleday, 1994.
System Dynamics / Systems Thinking Mega Link List
http://www.uni-klu.ac.at/users/gossimit/links/bookmksd.htm
The Way of Systems (System Archetypes)
http://www.outsights.com/systems/theWay/theWay.htm
Daniel Aronson, Overview of Systems Thinking, 1996-8
http://www.thinking.net