Systems Thinking
- Overview
- Example
- Systems Thinking Meets the Web: or What's this got to do with me?
Systems Thinking is a term used by Peter Senge in his book The Fifth Discipline. It is one of five principles that characterize organizations that are able to make use of their experiences so effectively that they can be said to learn. Systems thinking doesn't stop at considering causes and effects in a linear way (A causes B). It goes on to consider ways in which B influences A. Instead of a line, systems thinking uses a circle. The structure of a system — the key interrelationships in a business, among, for example, available resources and rates of production, or product ideas and employee skill sets — influence the behavior of the system itself.
The classic example from The Fifth Discipline deals with a product that experiences a sudden increase in demand, which then remains level. The problem is viewed from the points of view of the retailer, the wholesaler, and the manufacturer. Each participant makes only one decision per week: how much product to order.
- The retailer is the first to order more product, and when his/her demand can't be met, increases orders substantially.
- The system acts like an amplifier, with the wholesaler increasing orders above the retailer, and the manufacturer producing even more.
- Eventually there's a glut of product leaving everyone unhappy, and probably causing the manufacturer to stop producing for a while.
The only "culprit" in the game is lack of information about consumer demand. When this scenario is played out as a role-playing game, most participants assume that consumer demand rose and fell, just as their orders did.
Systems Thinking Meets the Web: or What's this got to do with me?
It's tempting to think that we can solve business problems with technology — and sometimes we can. But if we're not careful we can introduce new problems along with the new technology. Do we need to have a web page because our competitors do, or should we be clarifying who our market is, and developing a revitalized marketing plan to go with our redefined business? Do we need the latest, fastest computer and software, or should we also take a look at whether we're managing our documentation flow efficiently?
The May 1998 issue of Communications of the ACM (Association of Computing Machinery) reported that only 16% of some new computer network applications were being viewed as successful by the companies implementing them. Companies hoped that the new applications would increase productivity, but if their in-house staff didn't have the skills to support and work with the new software, the effect sometimes became a productivity drain. (For more information, you can look at an illustrated example, or review a case study.)
Ostinato can help you assess the technological readiness of your organization and deploy technology to achieve your business goals. To request an initial consultation, see About Ostinato.