Systems thinking is a management discipline, grounded on System Dynamics methodology, that concerns the understanding of a system (of-interest) by examining the linkages and interactions between the components that comprise the entirety of the subject system over-time.
A. Seminal and classic applications on complex-systems, among others…
- Industrial Dynamics.
- The precursor of modern Supply-chain Management thinking that was envisioned way back in 1961.
- This work has been cited as one of the most seminal works of the era. Forrester outlines industrial dynamics as an experimental, quantitative philosophy for designing corporate structure and policies that are compatible with an organization’s growth and stability objectives. Forrester believes that management systems possess an orderly and identifiable framework that determines the character of industrial and economic behavior.
- The World Model.
- A model that had scenario-ed what is currently happening to our world way back its inception in 1972.
- A system dynamics model for computer simulation of interactions between population, industrial growth, food production and limits in the ecosystems of the Earth. It was originally produced and used by a Club of Rome study that produced the model and the book The Limits to Growth. The principal creators of the model were Donella Meadows, Dennis Meadows, and Jørgen Randers.
- C-ROADS Climate Model.
- The model is being used by major climate-negotiators (including the US) around the world.
- It is a free, award-winning computer simulation program that helps people understand the long-term climate impacts of policy scenarios to reduce greenhouse gas emissions. It allows for the rapid summation of national greenhouse gas reduction pledges in order to show the long-term impact on our climate.
B. Some basic concepts
The links below will bring you to the appropriate website that will elaborate each of them.
- Behavior over Time Graphs: How to Detect Patterns of a System at Work
- Causal Loop Diagrams: How to Depict Your Understanding of a System
- The Language of Links and Loops: A concise explanation of the symbols
- Organizational Learning: Creating the Future You Envision
- Reinforcing and Balancing Processes: The “Building Blocks” of Every System
- Simulation Modeling: How to “Test-Flight” Your Business-Without Crashing It!
- Stocks and Flows, or How Fast Is the Bathtub Draining?
- System Dynamics: The Foundation of Systems Thinking
- Systems Archetypes, or “Why Do We Keep Having the Same Problems?!”
- Systems Thinking: Seeing the World Through a Whole New Lens
C. Glossary of terms
Systems thinking can serve as a language for communicating about complexity and interdependencies. To be fully conversant in any language, you must gain some mastery of the vocabulary, especially the phrases and idioms unique to that language. This glossary lists many terms that may come in handy when you’re faced with a systems problem.
Anything that builds up or dwindles; for example, water in a bathtub, savings in a bank account, inventory in a warehouse. In modeling software, a stock is often used as a generic symbol for accumulators. Also known as Stock or Level.
Combined with reinforcing loops, balancing processes form the building blocks of dynamic systems. Balancing processes seek equilibrium: They try to bring things to a desired state and keep them there. They also limit and constrain change generated by reinforcing processes. A balancing loop in a causal loop diagram depicts a balancing process.
Balancing Process with Delay
A commonly occurring structure. When a balancing process has a long delay, the usual response is to overcorrect. Overcorrection leads to wild swings in behavior. Example: real estate cycles.
Behavior Over Time (BOT) Graph
One of the 10 tools of systems thinking. BOT graphs capture the history or trend of one or more variables over time. By sketching several variables on one graph, you can gain an explicit understanding of how they interact over time. Also called Reference Mode.
Causal Loop Diagram (CLD) One of the 10 tools of systems thinking. Causal loop diagrams capture how variables in a system are interrelated. A CLD takes the form of a closed loop that depicts cause-and-effect linkages.
A systems archetype. In a “Drifting Goals” scenario, a gradual downward slide in performance goals goes unnoticed, threatening the long-term future of the system or organization. Example: lengthening delivery delays.
A systems archetype. In the “Escalation” archetype, two parties compete for superiority in an arena. As one party’s actions put it ahead, the other party “retaliates” by increasing its actions. The result is a continual ratcheting up of activity on both sides. Examples: price battles, the Cold War.
The return of information about the status of a process. Example: annual performance reviews return information to an employee about the quality of his or her work.
Fixes That Fail
A systems archetype. In a “Fixes That Fail” situation, a fix is applied to a problem and has immediate positive results. However, the fix also has unforeseen long-term consequences that eventually worsen the problem. Also known as “Fixes That Backfire.”
The amount of change something undergoes during a particular unit of time. Example: the amount of water that flows out of a bathtub each minute, or the amount of interest earned in a savings account each month. Also called a Rate.
Structures that can be generalized across many different settings because the underlying relationships are fundamentally the same. Systems archetypes are a class of generic structures.
Graphical Function Diagram (GFD)
One of the 10 tools of systems thinking. GFDs show how one variable, such as delivery delays, interacts with another, such as sales, by plotting the relationship between the two over the entire range of relevant values. The resulting diagram is a concise hypothesis of how the two variables interrelate. Also called Table Function.
Growth and Underinvestment
A systems archetype. In this situation, resource investments in a growing area are not made, owing to short-term pressures. As growth begins to stall because of lack of resources, there is less incentive for adding capacity, and growth slows even further.
One of the 10 tools of systems thinking. A learning laboratory embeds a management flight simulator in a learning environment. Groups of managers use a combination of systems thinking tools to explore the dynamics of a particular system and inquire into their own understanding of that system. Learning labs serve as a manager’s practice field.
An area where small change can yield large improvements in a system.
Limits to Success
A systems archetype. In a “Limits to Success” scenario, a company or product line grows rapidly at first, but eventually begins to slow or even decline. The reason is that the system has hit some limit—capacity constraints, resource limits, market saturation, etc.—that is inhibiting further growth. Also called “Limits to Growth.”
Management Flight Simulator (MFS)
One of the 10 tools of systems thinking. Similar to a pilot’s flight simulator, an MFS allows managers to test the outcome of different policies and decisions without “crashing and burning” real companies. An MFS is based on a system dynamics computer model that has been changed into an interactive decision-making simulator through the use of a user interface.
Policy Structure Diagram
One of the 10 tools of systems thinking. Policy structure diagrams are used to create a conceptual “map” of the decision-making process that is embedded in an organization. It highlights the factors that are weighed at each decision point.
See Behavior Over Time Graph.
Along with balancing loops, reinforcing loops form the building blocks of dynamic systems. Reinforcing processes compound change in one direction with even more change in that same direction. As such, they generate both growth and collapse. A reinforcing loop in a causal loop diagram depicts a reinforcing process. Also known as vicious cycles or virtuous cycles.
Shifting the Burden
A systems archetype. In a “Shifting the Burden” situation, a short-term solution is tried that successfully solves an ongoing problem. As the solution is used over and over again, it takes attention away from more fundamental, enduring solutions. Over time, the ability to apply a fundamental solution may decrease, resulting in more and more reliance on the symptomatic solution. Examples: drug and alcohol dependency.
Shifting the Burden to the Intervener
A special case of the “Shifting the Burden” systems archetype that occurs when an intervener is brought in to help solve an ongoing problem. Over time, as the intervener successfully handles the problem, the people within the system become less capable of solving the problem themselves. They become even more dependent on the intervener. Example: ongoing use of outside consultants.
One of the 10 tools of systems thinking. A computer model that lets you map the relationships that are important to a problem or an issue and then simulate the interaction of those variables over time.
Draws out the accumulators and flows in a system, giving an overview of the major structural elements that produce the system’s behavior. Also called flow diagram or accumulator/flow diagram.
One of the 10 tools of systems thinking. A structure-behavior pair consists of a structural representation of a business issue, using accumulators and flows, and the corresponding behavior over time (BOT) graph for the issue being studied.
The manner in which a system’s elements are organized or interrelated. The structure of an organization, for example, could include not only the organizational chart but also incentive systems, information flows, and interpersonal interactions.
Success to the Successful
A systems archetype. In a “Success to the Successful” situation, two activities compete for a common but limited resource. The activity that is initially more successful is consistently given more resources, allowing it to succeed even more. At the same time, the activity that is initially less successful becomes starved for resources and eventually dies out. Example: the QWERTY layout of typewriter keyboards.
A field of study founded by Jay W. Forrester that includes a methodology for constructing computer simulation models to achieve better understanding of social and corporate systems. It draws on organizational studies, behavioral decision theory, and engineering to provide a theoretical and empirical base for structuring the relationships in complex systems. More on this… (click here)
A group of interacting, interrelated, or interdependent elements forming a complex whole. Almost always defined with respect to a specific purpose within a larger system. Example: An R&D department is a system that has a purpose in the context of the larger organization.
One of the 10 tools of systems thinking. Systems archetypes are the “classic stories” in systems thinking—common patterns and structures that occur repeatedly in different settings.
A school of thought that focuses on recognizing the interconnections between the parts of a system and synthesizing them into a unified view of the whole.
See Graphical Function Diagram.
A tool used to identify systems archetypes. To use a template, you fill in the blank variables in causal loop diagrams.
Tragedy of the Commons
A systems archetype. In a “Tragedy of the Commons” scenario, a shared resource becomes overburdened as each person in the system uses more and more of the resource for individual gain. Eventually, the resource dwindles or is wiped out, resulting in lower gains for everyone involved. Example: the Greenhouse Effect.
- Pegasus Communications website
- Prof. RHEnriquez’s notes and handouts for his SYSDYNA- class at DLSU-Manila.
- Innovation Associates’ and GKA’s Introduction to Systems Thinking coursebooks
- The Fifth Discipline: The Art and Practice of the Learning Organization, by Peter Senge
- High Performance Systems’ Academic User’s Guide to STELLA
- Business Dynamics book by Prof. John Sterman, Copyrighted 2000, MIT Press.