Systems Thinking

A Conversation on
Varied as they are,

these problems share
some key features: each
is unique, difficult to
define, and often linked
to other issues.
Wicked Problems
Some of the Worlds Wicked Problems
Armed Conflict
Spread of Infectious Disease
Growing Population
Availability of Energy
International Terrorism
The Economy
Climate Change
Poverty, Hunger, Lack of Water
Global Currency
Megacities Management
Internet for Kids
Drug Addiction
Technology Disruptions
And your organizations are not spared.
The Generic Way we Solve Problems
Isnt that how KARMA happens
Traditional Thinking vs. System Thinking
Isolate interactions to analyze Integrate interactions to analyze
Linear, cause and effect Circular, cause, response, feedback
9
A collection of people
and/or parts that is
coherently organized and
interconnected in a
structure that produces a
distinct behavior,
function or purpose.
What is a System?
What is
System
Thinking?
Examining how
WE CREATE OUR OWN
PROBLEMS
Seeing the
BIG PICTURE
Recognizing that
STRUCTURE INFLUENCES
PERFORMANCE
Systems Views and OD
Focus on principle of organization,
particularly interdependent relationships
Deal with detail complexity and

dynamic complexity
Visualize processes of
change rather than snapshots
The Broad View
Environment, Boundary, Systems, Subsystems, Inputs, Outputs
The Deep View:
Remember our Iceberg Model?
Time to call the
OD Professionals
Potentials for
Deep Learning
Components of a System
Inter-
Elements Function
connections
A Systems Journey
The Sweet Sensations

The following is fiction. Any resemblance to any leading food
truck franchise company is purely coincidental.
The Start Up Firm
About two and half years ago, Sweet
Sensations (SS) opened a food truck health
food business. Customers walk-in, call or e-
mail orders.
SS has grown vigorously, attracting young
employees. Its staff was amazed by the
positive customers response. Volume,
customers, locations, staff, and menu
grew. The young SS owners were generous
in promoting staff to rise into
management. Because it opened more
and more locations (last year, 18 new) in
the city, staff had opportunities to learn
about the business and to develop new
skills.
In the past few months, SS owners noticed
a plateau-ing performance. The number of
customers levelled off. Revenues flattened.
Managers reported more concerns (e.g.,
orders filling goof-ups, sloppy restocking,
maintenance problems, and absenteeism).
Theres no clear trend. Different locations
are struggling with various problems.
1. What are the Elements?
-Number of new
employees
-Number of locations
-Number of customers
-Sales
Tool 1: Behavior Over Time (BOT) Graphs
Look for patterns of change over time rather than on

isolated events, leading to rich discussions on how and
why something is changing
20
2. Behaviour Over Time
New Staff
Number of venues
Number of customers
Sales
Time
Guidelines for Drawing CLD
Causal Loop Diagrams: Limits to Growth
a Reinforcing loop a Balancing loop
2. Polarity
+
births population deaths

+ +
Time delay
3. Delay
Resources
Tool 2: Causal Loop Diagrams
With its first venue success, SS

managers dreamed about their
future. They knew they were on a
hot idea. They knew that, as they
opened new venues (A), copying the
successful original model in the first
venue would increase their
customer base (B). As sales volume
(C) grows, sales (D) increases,
making more funds available for
investment (E) in more venues. SS
can then expand.
GREAT! But what about the declining performance? We need a new loop.
As the venues (A) increased, the number of new staff increased. Fewer of those staff worked in the
original venue. This means that an increasing number of new staff didnt know the recipe, policies,
operating procedures, and attitude expectations that had made the original business a big hit with
customers. As they tried to learn on the job, the new staff put an increasing load on their managers.
Sometimes, the newer staff got frustrated and came late, left early, or took a day-off without notifying
their managers.
In addition, occasional problems with late or incomplete orders and with messy serving and eating areas
turned off some customers. Some of those customers complained to their friends, so SS stopped
attracting new customers as it did before.
Systems: Key Points
A system is more than the sum of its parts.
Many interconnections in systems operate
through information flows.
The least obvious part of the system, its
function or purpose, is often the most crucial
determinant of the systems behavior.
System structure is the source of system
behavior. System behavior reveals itself as a
series of events over time.
Systems Thinking
Tools for OD
Professionals
We are limited in our
capacity to form and
reform mental models.
Systems modeling
allows us to move from
what to what if and
make our thinking
visible
CLD of Motivation in Organizations
Modelling Terror
Systems Thinking and OD
Todays problems come from Cause and effect are not closely
yesterdays solutions. related in time and space.
The harder you push, the harder Small changes can produce big
the system pushes back.
resultsbut the areas of highest
leverage are often the least
Behavior grows better before it obvious.
grows worse.
The easy way out usually leads You can have your cake and eat it
back in. toobut not all at once.
The cure can be worse than the Dividing an elephant in half does
disease. not produce two small
elephants.
Faster is slower.
There is no blame.
Systems Thinking and OD 2
q The structure of a system q Most systems have multiple

determines its behaviour aims.
q Changing any of these aims

q In a system with no will change the system.
causal chains (no q Optimization of systems
feedback) the output is cannot be achieved by
determined (and usually maximizing performance of
proportional to) the the parts in isolation.
inputs. q Some components may
q In a system with need to be subordinated
feedback loops the for the benefit of the
whole.
output is determined by
the (dynamic) structure. q Achieving this will require
trust and cooperation: a
willingness to see the
bigger picture
Augustines Fifth Law
One-tenth of the participants produce over one-third of the
output. Increasing the number of participants merely
reduces the average output.
N. R. Augustine, Augustines Laws. Reston, VA: AIAA, 1997.
Brooks Law
Adding people to a late project makes it later
The Use of Systems Thinking in OD Consulting
Modeling Organization Systems
Essentially, all
models are wrong,
but some are useful.
--George Box (Emeritus Professor of

Statistics, University of Wisconsin-
Madison)
Achieving Deep OD Learning
A Sufi teacher can summarize Systems Thinking :
You think that because you understand one that you must
therefore understand two because one and one make two.
But you forget that you must also understand and.
Systems Thinking is essentially the science of
AND.
For every change, which may be an action or a result
simply ask:
What will this change influence,
and
What will influence this change
And after you answer the question, ask it again and
again and again.
Developing the
Systems Thinking
Habits
Developing the Systems Thinking Skills
Systems Thinking Tools for OD
Professionals
Systems Archetypes for OD
Professionals
Systems Thinking in OD Consulting: The Diagnosis
Systems Thinking in OD Consulting: The Implementation
Interested? Get Started
Partner: Systems Thinking is

hard to master alone
Read: Thinking in Systems
by Donella Meadows
Identify: Articulate the
systems in your curriculum
Create: Draw a simple
stock-flow-loop diagram
Simulate: Explore a systems
model using the Habits of
Systems Thinkers
A Conversation on systems thinking & OD
Theory is when you know everything, but

nothing works.
Practice is when everything works, but no
one knows why.
This is where theory and practice come
together...
Nothing works and no one knows why.
- on the door of a laboratory at MIT
Eduard Q. Canela, BSEE, MBA, PhD (OD Systems Dynamics)

Tel: +632 9301615 | Cell: +63 917 559 1213 | e-Mail:
ed.canela@gmail.com | Skype: ecanela (Philippines)
Facebook: https://facebook.com/edcanela
Twitter: https://twitter.com/edcanela1
LinkedIn: https://www.linkedin.com/in/edcanela
Google+: https://plus.google.com/+edcanela/posts

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A Conversation on

Varied as they are,

Isolate interactions to analyze Integrate interactions to analyze

Linear, cause and effect Circular, cause, response, feedback

Deal with detail complexity and

The Sweet Sensations

Look for patterns of change over time rather than on

births population deaths

With its first venue success, SS

q The structure of a system q Most systems have multiple

q Changing any of these aims

--George Box (Emeritus Professor of

Partner: Systems Thinking is

Theory is when you know everything, but

Eduard Q. Canela, BSEE, MBA, PhD (OD Systems Dynamics)

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