Streamline Training & Documentation: Systems Thinking

Friday, October 06, 2006

Systems Thinking

If you're inclined to bolster your ability to use systems thinking, a good source of information is Pegasus Communications' website, The Systems Thinker.

Among the tools at the site that I've found especially useful is the set of guidelines for mapping cause-and-effect relationships using causal loop diagrams. To give you a taste of what's involved, here's a quick summary:

You need to identify the interrelated variables in the system you're looking to manage better. For example, you might want to investigate how you can better control costs without detracting from the quality of your product. To get started, you need to identify all relevant variables affecting, and affected by, costs — prices of raw materials, inventory levels, gross margins, etc.

Try to give your variables positive names. "For example, the concept of 'Growth' increasing or decreasing is clearer than an increase or decrease in 'Contraction.'"

Minimize surprises by thinking carefully about the full range of possible impacts of a change under consideration. In other words, minimize unintended consequences by anticipating effects as fully as possible. Serious team discussion really pays off here.

Always make the goals of your actions explicit. For example, if you take action to decrease unit cost, indicate whether the driving goal is being able to set lower prices and gain market share, or to meet a competitive challenge, or something else. Making the goal explicit is important so that it can be taken into account in all decisions affecting the variables with which you are working.

Distinguish between perceived and actual effects. When planning, recognize that it can take a while for actual changes to be perceived.

Add detail gradually. Start by sketching out the cause-and-effect relationships "as seen from 30,000 feet," and then drill down to identify more specifically the ramifications (effects) of a change in a particular variable (cause).

Map both short-term and long-term effects, and take both into account in your planning.

Make clarity the acid test for the completeness of your diagram. If you find that lengthy commentary is needed to explain some cause-and-effect link, try to add detail to the diagram to make the links more self-evidently clear.

Another good, accessible resource on systems thinking is Peter Senge's book, The Fifth Discipline — which places strong emphasis on continuous learning.

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