Monday, May 29, 2017

Systems Thinking

Sytems Thinking
A silo mentality is the biggest single impediment to achieving true business agility. Everyone involved in the creation and delivery of business solutions needs to collaborate across the breadth and depth of the organizational structure. Team-level agility in the delivery space alone will not deliver on the promise of the Lean enterprise; nor is DevOps enough. Business, IT and operations all need to break out of their silos and embrace Systems Thinking.

When you read about scaling agile you will notice that popular frameworks are using Systems Thinking. For example, one of the principles of LeSS is Systems Thinking (see here) and also SAFe says it is based on a number of newer paradigms in systems and software engineering, including Lean and Systems Thinking (see here).

So what is Systems Thinking? Here's a definition from Barry Richmond, who coined the term in 1987:

Systems Thinking is the art and science of making reliable inferences about behavior by developing an increasingly deep understanding of underlying structure.

Cultivating this "art and science" leads to routine use of correct mental models that see the world as a complex system whose behavior is controlled by its dynamic structure, which is the way its feedback loops interact to drive the system's behavior. The term Systems Thinking is preferred to holistic or whole systems, which have looser and more intuitive meanings, and emphasize understanding the whole rather than the dynamic structure of the system.

Systems Thinking is not stepping back to look at the whole, the big picture, or a higher level. Nor is it realizing that when a butterfly flaps its wings in one place, that could cause a hurricane far away. This helps, but does not lead to the major insights that emerge when the feedback loop structure of the system becomes visible. When this happens night becomes day. Systems Thinking is the first step to an even higher level: System Dynamics, where instead of just thinking in terms of system structure you model it. See for example this system model from the LeSS website.

Sytem Dynamics Model
 Here is a definition from Peter Senge's highly influential The Fifth Discipline Fieldbook:

Systems Thinking is a way of thinking about, and a language for describing and understanding, the forces and interrelationships that shape the behavior of systems. This discipline helps us to see how to change systems more effectively, and to act more in tune with the natural processes of the natural and economic world.

Event oriented thinkers and systems thinkers

Everyone in the world can be divided into two groups based on how they see the world around them: event oriented thinkers and system thinkers.

Most people are event oriented. They see the world as a big collection of parts and events. Each event has a cause and if you want to solve a problem, find the cause and fix that. How many root cause analysis you allready have been part of? So for example, when applying this mind set to the global environmental sustainability problem, they see people’s misbehavior as the cause of the problem. The solution, then, is to get them to stop behaving so irresponsibly. This can be done with laws stating what to do and not to do, plus emotional appeals to be nice to the environment. When that solution fails, as it has for over 40 years, they just throw up their hands and call it a hard problem.

Systems thinkers see the problem entirely differently. They see immense positive feedback loops causing swarms of agents to exploit the earth for their own benefit and population growth. This mode becomes unsustainable when negative feedback loops finally start to push back as environmental limits are approached. They don’t see people’s misbehavior as the problem. Instead, they see the structure of the system as causing that misbehavior. To solve the problem, system structure must be understood and changed, so that feedback loops can be redesigned to cause people to behave sustainably as a natural part of their everyday existence. This takes far more work than writing a few quick new laws and pleading to save the world.

Defining a system

When defining a system you have to keep in mind the following:
- a system is composed of parts
- a system is other than the sum of its parts
- all the parts of a system must be related (directly or indirectly), else there are really two or more distinct systems
- a system is encapsulated (has a boundary)
- a system can be nested inside another system
- a system can overlap with another system
- a system is bounded in time, but may be intermittently operational
- a system is bounded in space, though the parts are not necessarily co-located
- a system receives input from, and sends output into, the wider Environment
- a system consists of processes that transform inputs into outputs
- a system is autonomous in fulfilling its purpose (a car is not a system. A car with a driver is a system)

Concepts of Systems Thinking

Systems thinking revolves around only a handful of concepts. The key concepts are:

1. All systems are composed of inter-connected parts. The connections cause behavior of one part to affect another. All parts are connected. A change to any part or connection affects the entire system.

2. The structure of a system determines its behavior. Structure is the pattern of part connections, which is how the system is organized. System behavior is at least a thousand times more dependent on connections than parts because that’s what determines how the parts work together. To understand a system’s gross behavior, understand its structure. To change a system’s gross behavior, change its structure.

3. System behavior is an emergent phenomenon. How a system behaves cannot be determined by inspection of its parts and structure. This is because parts are tightly coupled, the parts and structure are constantly changing, feedback loops are present, nonlinear relationships exist, behavior paths are history dependent, the system is self-organizing and adaptive, emergent behavior is counterintuitive, time delays exist, the human mind has very limited calculation abilities, etc. Once you realize how complex the behavior dynamics of even a simple system really is, you will never again assume you can look at a system and predict how it will behave.

4. Feedback loops control a system’s major dynamic behavior. A feedback loop is a series of connections causing output from one part to eventually influence input to that same part. This circular flow results in large amplification, delay, and dampening effects, which is what causes the gross behavior of the system. Every part is involved in one or more feedback loops. Systems have more feedback loops than parts, which causes unimaginable complexity. Feedback loops are the main reason a system’s behavior is emergent.

5. Complex social systems exhibit counter intuitive behavior. The problems of such systems therefore cannot be solved using intuition and our everyday problem solving methods. The use of intuitive methods to solve difficult complex social system problems is a common trap, so common the entire environmental movement has fallen into it. Only analytical methods using tools that fit the problem will solve difficult complex social system problems. The first such tool to adopt is true systems thinking. The second one is a process that fits the problem. The third one, unless it is an easy
problem, is system dynamics.

Laws of The Fifth Disicpline

The Fifth Discipline: The Art and Practice of the Learning Organization is a book by Peter Senge (a senior lecturer at MIT) focusing on group problem solving using the systems thinking method in order to convert companies into learning organizations. The five disciplines represent approaches (theories and methods) for developing three core learning capabilities: fostering aspiration, developing reflective conversation, and understanding complexity. His 11 laws of the fifth discipline are a nice summary of insights provided by Systems Thinking.

1. Today’s problems come from yesterday’s ‘solutions.’
2. The harder you push, the harder the system pushes back.
3. Behavior will grow worse before it grows better.
4. The easy way out usually leads back in.
5. The cure can be worse than the disease.
6. Faster is slower.
7. Cause and effect are not closely related in time and space.
8. Small changes can produce big results…but the areas of highest leverage are often the least obvious.
9. You can have your cake and eat it too—but not all at once.
10. Dividing an elephant in half does not produce two small elephants.
11. There is no blame.

Further Reading

If you would like to read more about Systems Thinking I would start with the book The Fifth Discipline: The Art and Practice of the Learning Organization, by Peter Senge. Work through to the fifth chapter, titled A Shift of Mind. There Peter does indeed shift the mind with a great introduction to Systems Thinking, one so good the book turned much of the American business world onto systems thinking in the 1990s, when it was first published. In this chapter Peter defines systems thinking as "a discipline for seeing the 'structures' that underlie complex situations, and for discerning high from low leverage points."

And then, if you also want to read about System Dynamics, try John Sterman's Business Dynamics: Systems Thinking and Modeling for a Complex World. As the title suggests, this will not only turn you into a systems thinker. It will also turn you into a modeler, using system dynamics.
Posted on Monday, May 29, 2017 by Henrico Dolfing

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