‘Thinking In Systems’ Can Help You Build A Sustainable Business

3 Reasons To Buy Thinking In Systems:

1. Immediately become a “systems thinker” through this engaging and easy-to-read primer.
2. Own a 10-page reference in the appendix that nicely summarizes all the key takeaways from the book.
3. Learn the 12 Leverage Points/Places to Intervene in a System: the twelve most effective ways you can intervene in a system to produce better outcomes.

Background

I recently contacted the Donella Meadows Institute about writing a review of their book, Thinking In Systems, after reading John Mackey’s book, Conscious Capitalism. John Mackey is the CEO of Whole Foods Market and in his book he impressed upon me the importance of developing “systems intelligence” in order to become a conscious leader. Here are the reasons for developing systems-intelligence or systems-thinking skills:

1. The ability see the bigger picture and understand how different components of the systems interconnect and behave over time.
2. The ability to anticipate the immediate as well as the long-term consequences of actions.
3. The capabilities to become an excellent organizational architect.
4. The ability to understand the roots of problems and how the problems relate to organizational design.
5. The ability to devise fundamental solutions instead of applying symptomatic quick fixes.
6. The ability to prevent many organizational problems from occurring in the first place.

With all those benefits/reasons for understanding system thinking, reading the book Thinking In Systems is an excellent way to get started.

The author of the book, Donella Meadows, was a pioneer of environmental and social analysis until her passing in 2001. Donella was a scientist, teacher and writer who received a Ph.D in biophysics from Harvard and later joined a team at MIT to apply new tools of system dynamics to global problems. She was the principal author of The Limits to Growth (1972), which sold more than 9 million copies in 26 languages. This book, Thinking In Systems, was her last book and was only partially completed be the time of her passing. The Donella Meadows Institute edited the manuscript in order to publish her work. For more info about Donella Meadows see here.

This book is not geared specifically towards business people, but as you will learn, systems are everywhere and the basics you learn here can be applied to business as well as many other areas of your life.

***Check out other reviews of  ‘Thinking In Systems’ on Amazon.com by clicking here.***

Now on to the layout of the book.

Outline Of Thinking In Systems And What You’ll Gain From Each Section

There are 3 main parts to this book:

1. Systems Structure and Behavior
2. Systems and Us
3. Creating Change—in Systems and in Our Philosophy

This is one of those books that are jam-packed with new and extremely useful frameworks and information but without any filler content. At about 225 pages, the authors never repeat themselves so you can finish quickly and then reference specific sections later as needed.

Part I: Systems Structure and Behavior

Here you discover the basics about systems and are presented with a collection of common and interesting types of systems. Some key takeaways for me where:

• A system is a set of things, people, cells, molecules etc that are interconnected such that they create their own pattern of behavior through time.
• A system is an interconnected set of elements that is organized to achieve some purpose.
• Thus, all systems consist of these 3 things:
  1. elements
  2. interconnections
  3. a function or purpose
• Systems run themselves through what’s called a feedback loop.
• Systems models can be graphically depicted by stocks and flows. For example, business inventory is a system in which deliveries (flow) of product arrive in your warehouse, leading to a buildup of inventory (stock), which is eventually depleted through time when product is shipped (flow) to customers. A manager monitors the sales of products (feedback loop) in order to adjust the rate at which new product are brought into the warehouse.

Simple system: a bathtub

• When confronted with a scenario, such as predicting the next quarter revenue, you can determine how good your system model is by asking:
  1. Are the driving factors likely to unfold this way?
  2. If they did, would the system react this way?
  3. What is driving the driving factors?
• Some examples of systems used in the book:
  • a thermostat mechanism that regulates the heating of a room
  • global population
  • business inventory (e.g. cars at a car dealership)
  • capital equipment for a business
  • oil supply
  • fish harvest

System example: business inventory

The trick, as with all the behavioral possibilities of complex systems, is to recognize what structures contain which latent behaviors, and what conditions release those behaviors—and, where possible, to arrange the structures and conditions to reduce the probability of destructive behaviors and to encourage the possibility of beneficial ones. ~ Thinking In Systems

Part II: Systems and Us

This section explains why systems tend to work so well, but when they don’t, what we can do to improve them.

These are some of the highlights I took away from part 2:

• Systems generally work well due to three characteristics of systems:
  1. resilience—this arises from a rich structure of feedback loops that can restores a system even after a large crisis.
  2. self-organization—the ability of systems to learn, diversify, complexify, and evolve through time.
  3. hierarchy—often generated during complexification, hierarchy is the condition of stable subsystems that are strong but synergistic to the total system.
• Systems can surprise us when we focus exclusively on short-term events and don’t look at the long-term behavior and structure of a system.
• How to navigate well in this interconnected, feedback-dominated world: be aware of false boundaries of systems, our bounded rationality, take into account limiting factors, non-linearities, and system delays. Also, respect the properties of resilience, self-organization, and hierarchy.
• Several typical problems arise in systems that we should be aware of in order to create solutions:
  • Policy Resistance—problems arise when the goals of subsystems are different from and inconsistent from each other in the total system.
  • The Tragedy of the Commons—when there is growth or escalation in a commonly shared, erodible resource.
  • Drift to Low Performance—when actors in a system routinely believe bad news more than good news, over time they lower their expectations of what the system can accomplish.
  • Escalation—when competing actors continuously try to get ahead of the other (e.g. nuclear proliferation).
  • Success to the Successful (Competitive Exclusion)—when the winner of a game is rewarded with the resources necessary to win the game again, which makes the losers even less likely to win in the future.
  • Shifting the Burden to the Intervener—when a subsystem shifts the burdens to another, such as a failing company that asks for a bailout or subsidy, but the bailout or subsidy doesn’t last forever and the subsystem fails because it never learns to be independently sustainable.
  • Rule Beating—evasive action by individual actors to get around the intent of a system’s rules by abiding by the letter of a law but not its intent.
  • Seeking the Wrong Goal—when a system’s goal is defined badly or doesn’t measure what it’s suppose to measure.

Part III: Creating Change—in Systems and in Our Philosophy

This last section nicely explains 12 key places to intervene in a system to create sustainable solutions to system problems. Some of these are: use buffers for stocks, redesign the stock-and-flow structures, change the system delays, change the strengths of the balancing- or reinforcing-feedback loops, restructure the information flows, modify system rules, redesign the system goal(s), or change the mental models of the system.

In the last chapter, the author leaves us with more than a dozen guidelines for how we can better live within this world of systems we find ourselves in today.

Final Comments

Here’s a statement by Donella Meadows from her note at the beginning of the book:

There is much, much more to systems thinking than is presented here, for you to discover if you are interested. One of my purposes is to make you interested. Another of my purposes, the main one, is to give you a basic ability to understand and to deal with complex systems, even if your formal systems training begins and ends with this book. ~ Donella Meadows

I really enjoyed this book because it gave me the vocabulary, fundamentals, and examples behind system thinking. This is one of those books that after you read it, you walk around and see everthing with a new set of eyes. I’m personally a very good analyst who can deconstruct or reduce a thing into its component parts, but now I feel more accomplished for having the basic ability to understand the “whole” like never before. For a business person, seeing your work environment as a collection of systems can help you navigate your work better. If you’re an entrepreneurial leader, understanding the organizations you design through a systems-thinking lens will help you prevent problems and sustainably fix those that do arise.

If you pick up this book and find yourself wanting to dig even deeper, you will find a list of books in the appendix that you can look to next. However, I believe this book has so much to offer that it is in itself a complete resource for any business manager.

Click here to check out ‘Thinking In Systems’ on Amazon.com

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