We were asked to answer the question of why people should consider Systems Thinking as an approach to viewing organisations and their issues; in less that 2 pages of A4.  This is what we came up with as a summary.

The Current View

The most common form of organisational design is a functional hierarchy i.e.

In additional to the functional view many, if not most, organisations also overlay a set of process diagrams e.g.

A process view of an organisation shows how individual transactions pass through the organisation.  A process view provides a better management model than functional view in that it more accurately reflects how value flows into and around an organisation and allows that value to be measured more accurately.  However, as many organisations have found, mapping processes in detail (and keeping them up to date) is a time-consuming and difficult task.

More importantly, process mapping struggles to represent important areas of activity such as marketing, innovation and risk management that everyone knows can add significant value to an organisation.  This is primarily because they are not “transactional” activities.

Not being able to accurately model, and therefore be able to measure, key areas of value of an organisation are a root cause of very current and real problems and provide a real issue for all stakeholders in an organisation e.g. stock market value is fundamentally linked to innovation and marketing but putting a value on them includes more subjectivity than anyone is prepared to admit.

A “Systems” or Cybernetic View

To get a more holistic view we make the statement that “everything is connected” and look to bring in some of the key influences we know are not in the basic process.

The picture above is an influence map showing what we already know about any sale, they are influenced by references from existing customers and these references are, in turn influenced by the experience of that product or service.  It is also obvious that a sale is also influenced by the market profile.  Government regulation is an influence through competition policy and employment rules.  Government is in turn influenced by taxes.

The point is that even a basic systems view is a more complete representation of how an organisation operates and is interconnected with its environment.  It is immediately easier to identify why issues arise, where the right place to intervene is and what the consequences of any intervention might be.

Types of Systems Thinking

There are a variety of different types of systems thinking.  The widest known are the simple haemostats popularised by Peter Senge in his book “The 5^th Discipline”.  The influence diagram concept has been extended and formularised by people such as Ackoff and Checkland (soft systems modelling).  These are all useful at the “detail” level of analysis.

At an overall organisational level there is the Stafford Beer’s Viable Systems Model (VSM).  This describes any organisation as a set of 5 types of system which all need to be present for the organisation to be sustainable (viable).  It is particularly interesting in that it has been proved / developed from both mathematical theory and biological observation.