Systems thinking is a big-picture approach to tackling workplace problems. Rather than focusing on individual parts of your company, it tries to study the workplace as a whole. The benefit of systems thinking is that you can see problems caused by how the parts of your business fit together. The downside is that systems thinking isn't easy, particularly in large companies.
How Systems Thinking Works
The key principle of systems thinking is that everything is connected. When trying to make your company more efficient, it's simple to focus on individual employees or different departments. However, your organization is more than the sum of its departments. Combined together, they interact in new and complex ways.
A car makes a good metaphor for how this works. It has hundreds of components, including the axles, the steering wheel and the transmission, but all of them have to work together to make a functional car. If every component is in perfect condition, but they don't interact properly, the car is not going to work.
The Benefits of Systems Thinking
The best way to explain the contribution of systems thinking to efficient administrative performance is with examples. Suppose you've adopted an aggressive marketing policy for your company, successfully expanding your client base. Part of the policy is a promise of quick, quality customer service, but clients say you're not delivering.
A details-oriented approach might assume customer service is obviously the problem and try to figure out what they're doing wrong. If you use systems thinking, you look at the big picture and realize the problem arises from customer service and marketing combined. The marketing department is promising more than customer service can deliver, and customer service isn't finding ways to improve things.
If, say, you're debating whether to let employees telecommute, systems thinking considers the many different impacts this will have on your company:
- Improved employee morale, which can increase loyalty.
- Increased productivity due to saving commuting time.
- Cost savings if you don't need office space for every employee.
- In the event of a terrorist attack, having a widely dispersed workforce can reduce the disruptions.
- Less oversight of your employees.
- Potential for security lapses.
Feedback and Patterns
Another of the benefits of systems thinking is that it can make it easier to spot patterns and feedback loops in the way employees, project teams or departments interact. A feedback loop takes place when different parts of your company reinforce each other's behavior for better or worse.
For example, suppose a project manager demands more time from one of his team members, which interferes with his regular work. The team member's regular supervisor counters by demanding more work in return, which reduces the team's effectiveness. The conflict escalates from there.
The problem isn't with the supervisor or the project manager alone but rather in how they're interacting. Systems thinking can show you the big picture, which is the first step to fixing it.
The Systems Thinking Challenge
Like most management ideas, systems thinking isn't a miracle cure for corporate problems. Before embracing it, you need to keep in mind both the strengths and weaknesses of systems thinking. The big strength is its effectiveness at finding problems. The big weakness is that it's difficult to do successfully.
In a small startup, it may be easy to get a systems overview of the problem because everyone is on one small team. As the company grows, things become much more complex, making it hard to get a systems overview that takes in everything. Departments, branches and projects start to silo, which makes gathering all the information difficult.
Another weakness is that systems thinking isn't a good tool for tackling a crisis. If, say, a person suffers a heart attack, systems thinking about lifestyle, diet and medication changes is important but only after the crisis passes. Likewise, systems thinking isn't the best tool when your business is in emergency mode.
Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com