Systems thinking helps in forming a strategy

I am always surprised when executives make the incorrect assumption that systems and processes are only relevant during execution, not in strategic planning.

They envision high level thinking and being so far outside the box that they can come up with unique ideas that disrupt their industry.  They believe that the further away they get from the day-to-day operations the better equipped they will be to come up with a solution that gets away from the way it has always been done. 

But I believe this is misleading.  It is wrong because creativity doesn’t exist in a vacuum.  Innovation only matters when we innovate an area to improve something. 

We have to understand the interconnecting parts of the system.  If we don’t, we likely will completely miss the mark in our strategic plan.  Then when it comes time to execute we are left wondering how in the world we can actually accomplish anything worthwhile.

Peter Senge gives a great explanation in his book, The Fifth Discipline.  He states, “We all know the metaphor of being unable to ‘see the forest for the trees.’  Unfortunately, when most of us ‘step back’ we just see lots of trees.  We pick our favorite one or two and focus all our attention and change efforts there.”

In other words, we completely miss seeing the full system and how it all connects.  We don’t see how some aspects connect with other aspects and assume an overly simplistic understanding where each silo is completely separated, each department operations in a vacuum.

Many times when I talk to business leaders about systems thinking they just assume they need more information.  They require more data, more analysis, and more reports.  They don’t realize that information without purpose or understanding just complicates things.

Senge then goes on to say, “The increasing complexity of today’s world leads many managers to assume that they lack information they need to act effectively.  I would suggest that the fundamental ‘information problem’ faced by managers is not too little information but too much information.  What we most need are ways to know what is important and what is not important, what variables to focus on and which to pay less attention to – and we need ways to do this that can help groups or teams develop shared understanding.”

But it is much too easy to get caught up in information when our world is so complex.  We want to simplify but doing so only has us focus on ‘our favorite trees’.  It doesn’t provide a better model to use; it just pulls out part of the full system.

But it isn’t just in business that this occurs.  If you want to start getting healthy and losing weight, what should you do?  Should you stop eating carbs?  Should you follow the Paleo diet?  Should you look at each food’s Glycemic Index to determine what to eat?  Should you reduce your caloric intake?

As you can see, more information on each strategy doesn’t really add clarity.  So most people just pick their favorite.  They don’t really see how each one is impacting their health in a very specific way and there are pros and cons of each approach. 

A better approach is to understand how the body processes food.  This can be very simple and can start with simply eating more vegetables and less processed food.  It can become much more but doesn’t need to pick one extreme diet in order to be successful and start to make progress. 

And as you set out you will learn a great deal about what works and what doesn’t for you.  You will start to acquire information but quickly see how that fits in the overall system of your health. 

Systems thinking can be a great way to help form strategy.  By seeing the full system we avoid getting too caught up in the trees but miss the forest.  We see patterns and structures.  These might be to see a feedback loop or balancing feedback and specifically design a structure to leverage these. 

Whether in business or in our personal lives, the systems thinking approach can be a great way to move forward and improve.  By seeing the full system and the various ways we can improve, we can start to form a strategy and immediately connect that strategic plan to a plan for execution.