...Systems Thinking: Managing Chaos and Complexity This Page Intentionally Left Blank Systems Thinking: Managing Chaos and Complexity A Platform for Designing Business Architecture SECOND EDITION Jamshid Gharajedaghi AMSTERDAM • BOSTON • HEIDELBERG • LONDON NEW YORK • OXFORD • PARIS • SAN DIEGO SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO Butterworth-Heinemann is an imprint of Elsevier Butterworth-Heinemann is an imprint of Elsevier 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA 525 B Street, Suite 1900, San Diego, California 92101-4495, USA 84 Theobald's Road, London WC1X 8RR, UK This book is printed on acid-free paper. Copyright © 2006, Elsevier Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from the publisher. Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone: (+44) 1865 843830, fax: (+44) 1865 853333, E-mail: permissions@elsevier.com. You may also complete your request on-line via the Elsevier homepage (http:/ /elsevier.com), by selecting “Support & Contact” then “Copyright and Permission” and then “Obtaining Permissions.” Library of Congress Cataloging-in-Publication Data Gharajedaghi, Jamshid. Systems thinking : managing chaos and complexity : a platform for designing business architecture...
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...Organizations with functional and hierarchical structure may operate within a closed mechanistic structure with top-down management. Organizations striving to create relevance and competitive advantages may adopt more adaptive, flexible, interdependence and open management strategies. Organizational systems vary and can be simple or complicated; complex or chaotic; and linear or nonlinear. System dynamics in its broadest sense seeks to provide information and knowledge of how relationships influence the behavior of the system (parts and whole) over time. Designing, and managing systems in an ever-changing environment can present leaders with challenges as well as opportunities. Ackoff and Gharajedaghi (1996) defined a system as “a whole defined by one or more functions, which consists of two or more essential parts” (p.13). Systems Theory, Systems Analysis and Systems Thinking examines input, processes, outputs and outcomes, with ongoing feedback. Social systems (groups, supply and demand, friendship, etc.) range from very simple to very complex. Complex systems, are comprised of numerous subsystems are arranged in hierarchies, and integrated to accomplish the overall goal of the overall system. Internal dynamics and effectiveness The structure of an organization macro (focus on larger social structural challenges) or micro (focus on everyday challenges) can have a direct effect on company productivity and effectiveness. Kilduff and Brass (2010) suggest at the macro level can consist...
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...Running Head: Systems Thinking 1 Systems Thinking Management Process Systems Thinking 2 Table of Contents Introduction to Systems Thinking Reflections on readings Applying SIMILAR to an area needing improvement Conclusions Systems Thinking 3 Systems thinking is a very new concept to me. It is an outstanding approach with a global view of the entire system and not viewing each department as a separate entity thus preventing the siloed effect. First and foremost, I think it is critical to define just exactly what constitutes a system. According the Dr. Deming’s book, a system is defined as “a series of functions or activities within and organization that work together for the aim of the organization” (Latzko, 1995, p. 35). I at first struggled with the systems concept. Using this approach all components of the system gain and not at a cost to another. With that definition in mind we can apply this thinking to any organization or process. I love the analogy Dr. Deming used by looking at an orchestra as a perfect system. My translation of this analogy is that the sum is greater than the parts. The combined efforts of each member of the orchestra are an outstanding product, beautiful music, regardless of the instrument played. All the orchestra members have the same common purpose (Dr. Deming’s 1st point for management). Thus, providing...
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...Systems Thinking-Getting the Big Picture When we try to assemble the jigsaw pieces of organisational world, one important tool comes to rescue called Systems Thinking. In Simple terms, it is a way to view systems from a broader perspective and understand the micro structures, patterns and cycles rather than focussing on specific events in the system. This unique approach to problems is interwoven with system dynamics which was founded in 1956 by MIT professor Jay Forrester. To ingrain the concepts of systems thinking, understanding “Systems” is a pre-requisite which can’t be ignored. A system is a web of interrelated and interdependent components that complete the complex whole. Our body has various systems like circulatory, respiratory etc.The sales department in an organisation is another example. Every system has some common characteristics: * A purpose within a larger system. * Specific arrangement of system’s parts so that the overall system works perfectly. * System should trigger a change on feedback. * System should maintain stability by adjusting based on feedback. Coming back to systems thinking, its application on most difficult types of problems have been found quite effective where apparent solutions have failed and a need to raise the level of thinking has been found. Its use can be associated at individual as well as in organisations where complexities exist at every next step before reaching a solution. To make the understanding on this...
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...Systems Thinking and Change Management Evaluation Systems thinking is a process that incorporates the crucial elements of strategic planning, management and leadership development, team building, and other principles of organizational change in the effort to create positive change within an organization. The first component of this discussion evaluates systems thinking and the application and limitations of systems logic as essential considerations in managerial decision making. Systems thinking is also a technique that manages a process as a whole while understanding that individual pieces of the process can cause an impact. Systems thinking applies a linkage strategy that analyzes interactions among elements comprising a system. It takes into account that large systems can be negatively affected by small changes in another geographically or time separated areas. This view of process management is ideal for any organization that has more than a very few processes and personnel. Communication is the method within systems thinking that defeats negative affects. Application and Limitations A systems approach can be seen in the following real world-example. Their outstanding success in systems thinking makes Wal-Mart’s an excellent comparison system for corroborating systems thinking examples for this IT project’s discussion. Wal-Mart has taken forecasting to the highest level by using a systems thinking electronic database (Aquilano, Chase, and Jacobs, p. 510, 2006). The company...
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...At my current workplace there is at least one system error that was apparent in this week’s reading regarding “Systems Thinking”. Seddon (2007) in part one of his six steps series stated that most organizations have managers who believe that their roles as managers is to manage people and budget. He also says that although most managers believe that people are their most important asset, they judge their people based on how they perform their work. Seddon (2007) in part one of his six steps series also states that managers should concentrate on the system or systems that people are made to work with. If the system is effective and constantly being worked on for further improvement, then the productivity of the people is bound to improve. In the Acquisition Management division of my organization, there are multiple systems the Contracting professionals have to work with. In order to initiate a procurement action, program offices need to put in a Procurement Request (PR) through the PRISM system describing the requirement and providing approved funding information. The contracting person needs to verify that funds are indeed available and have been set up for obligation by going into the TraMS system. Funds are to be obligated here upon execution of the contract. Once this is done the Financial Management folks have to then enter these obligations further into the DELPHI accounting system. This seems to be an inefficient system because one of the ways the contracting personnel...
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...A system is a set of interacting or interdependent components forming an integrated whole. Every system is delineated by its spatial and temporal boundaries, surrounded and influenced by its environment, described by its structure and purpose and expressed in its functioning. Fields that study the general properties of systems include systems science, systems theory, systems modeling, systems engineering, cybernetics, dynamical systems, thermodynamics, complex systems, system analysis and design and systems architecture. They investigate the abstract properties of systems' matter and organization, looking for concepts and principles that are independent of domain, substance, type, or temporal scale. Some systems share common characteristics, including: A system has structure, it contains parts (or components) that are directly or indirectly related to each other; A system has behavior; it exhibits processes that fulfill its function or purpose; A system has interconnectivity: the parts and processes are connected by structural and/or behavioral relationships; A system's structure and behavior may be decomposed via subsystems and sub-processes to elementary parts and process steps; A system has behavior that, in relativity to its surroundings, may be categorized as both fast and strong. The term system may also refer to a set of rules that governs structure and/or behavior. Alternatively, and usually in the context of complex social systems, the term institution is used...
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...Systems Thinking and Tools Darthula Diane Goetz MOL504A Systems Thinking and the Learning Organization Dr. Roger Martin Warner Pacific College August 31, 2012 System Thinking and Linear Thinking Systems Thinking is a process of viewing the entire entity and the paths or connections that allow each part of the entity or process connecting to the whole to be followed and analyzed as each decision affects the whole scheme of the social system/process or organization. This process of thought and understanding is different from the traditional process in that it no longer focuses on the individual piece or person, but the dynamics of the entire organization as the individual piece or person interacts and travels through the system. A system can be anything or any process. As stated by Donella Meadows in Thinking in Systems “words and sentences must, by necessity, come only one at a time in a linear, logical order. Systems happen all at once.” (Meadows, 2008, p. 5). The system being studied may be human or non-human. The concept of System Thinking is not the what is being studied but the how that something interacts with all the various other whats within the entire system. System thinking will frequently allow the individual studying any situation or process to come up with entirely different conclusions than when the same situation or process is studied using the traditional analysis of linear thinking which focuses on tracing a direct path to cause and effect...
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...Topic: Systems thinking is critical in developing solution to sustainability challenges Name: Tutor: Introduction System thinking is an approach which focuses on how the issue on study interacts with other related issues and not merely isolating it. Over time, it has been used to address various complex issues (Banson et al. 2014, p.173). Wicked problems are one of these issues addressed by it in a successful way. It is also useful in solving recurring problems which prove difficult to solve. Basically it is composed of various parts which are related either directly or indirectly. They all entail processes which produce outputs from inputs. It is not only dynamic but also holistic and seeks to produce results of the complex problems. Systems thinking is the only critical way to solve complex issues impeding sustainability challenges and develop quality solutions. Since its conception in 1920 by Jan Smuts Holism, it has developed and solved many issues (Gharajedaghi p.2013 558). Pollution is a complex issue which is intertwined in different processes and impacts in diverse ways. Thus, the topic is significance in pursuing ways to help solve the pollution. Ocean pollution also referred to as marine pollution is a wicked problem which has been increasing in complexity day in day out. This is because of the increasing population growth which stands at 7.2 billion worldwide (Noga & Wolbring 2013 p.3615). The increased industry establishment is directly proportional to...
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...Applying System Thinking to Customer Service Operations Amber Johnson Kaplan University Introduction Everywhere you turn, there are systems. Each system serves a specific purpose. Systems ensure that a certain goal is carried out to its maximum potential. Within an organization there are smaller systems implanted into the larger system. A customer service operation has many smaller systems working together to achieve a common goal. At United Healthcare International, the customer service operation system is multifaceted and driven to produce excellence. Customer Service Operating System When building a business unit, one must utilize system thinking. System thinking, “helps us anticipate the unintended consequences of our actions, find the highest leverage points for focusing our energy and resources, discover underlying causes that drive our own and others’ behavior and make better decisions” (Hutchens, 2001, p59). Based upon the description of system thinking, it would seem that most organizations would employ the system thinking methodology. This way of thinking, however, requires recognizing all of the interactive working parts of the business unit, which can prove to be a difficult task. In the customer service operations business unit at United Healthcare International, there are certainly smaller engaging working parts within the larger business unit, thus making it a system. In order to qualify as a system there has to be a clear purpose. This...
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...Why is systems thinking critical in developing solutions to sustainability challenges? Systems thinking is a method of thinking that looks at the interconnectedness between different elements rather than a linear cause and effect approach and sees patterns of change rather than fixed “snapshots”. In essence it is a view on the “whole picture” (Anderson, R 1994). Peter Senge and Andres Edwards expressed the importance of system thinking in that it is necessary for “understanding the dynamic complexity of a situation”, anticipating “the unintended consequences of proposed actions” and implementing “lasting solutions” (Higgins, K 2014). Obesity is a wicked problem we face today where systems thinking is necessary as it is a sustainability issue that flows into the three pillar model. It affects the social, economic, and environmental pillars, as well as physiological and psychological factors on an individual level making it a unique and complex system. By looking at genetics, psychological disorders, social norms and consequences, the food we buy and energy we use as well as the economy we can see why past and current attitudes have failed and that by encouraging a system thinking approach a new understanding of the circumstances can be achieved helping to identify prospects for action that may not have previously be seen; altogether illustrating systems thinking’s critical role in developing solutions to sustainability challenges. Over the last few decades obesity has rapidly...
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...One of the first problems I immediately encountered was that the management system was from run from the top-down. Of course, this job was on a military installation where the top-down style of management system is common. According to the article by Reed, military organizations tend to place a higher premium on the traditional methods for leadership which just doesn’t work. He stresses the importance of having leaders who are able to really see the big picture of how the organization works both internally and externally (2006). My supervisor was the Library Director who had a PhD in Library Sciences. He held very strong to the belief that he was in charge of everyone and everything in the library. I can recall one instance where everyone called in sick except for me. This wasn’t a huge deal because I was able to handle the circulation desk operations for the day. However, I was shocked to realize he had no idea how the day to day operations of the library were run. I expected that the Library Director would know how to use the system in place to check items out to library patrons, but he didn’t. I tried to show him how to do some of the library technician tasks, and he was quick to remind me that he was the director and should not have to do the tasks of a library technician. I find this to be a huge management flaw, as I lost respect for him as my supervisor due to his level of incompetence about his business. If my manager had used more of the outside-in approach...
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...Systems Thinking University of Maryland University College Abstract Back in 2008, as a leader / manager, I had a difficult task ahead of me to get 131 Sailors in my department, to complete 11 online courses that were required annually. These had to be done while “on the clock”. This was in addition to their primary responsibility of maintaining and fixing Naval aircraft. To put it lightly, I failed. All the Sailors may have completed these courses, but it wasn’t by my deadline, it wasn’t by their choice or on their terms and it certainly could have been done a better way. Looking back, I realize that the only reason I succeeded quantitatively was because I had to use my rank and authority. The result was not qualitative. Systems Thinking An Example of Ignorance In 2008 my job rotation landed me as the Maintenance, Manpower and Training Officer. One of my responsibilities was to ensure all 131 personnel in my department completed their annual requirement of 11 online courses. In the recent years leading up to, Sailors were delinquent for the training at year’s end. In order to meet the requirement, Sailors were pulled off their primary job of fixing aircraft in hopes there would be an open computer to complete 11 courses. These courses took about 16 hours to complete. There are 4 levels of leadership between each Sailor and me. The 8 Division Officers and 14 Chiefs are a strong association through whom I can get...
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...engine is made up of thousands of parts put together and a typical shop visit (input, repair/upgrade, assembly, testing) will take approximately 60 days to complete. The current system of achieving the 60 days target is done by dividing the resources into 4 different sections. Each section will be in-charge of each module’s strip and assembly. Upon completion an additional team will put together all 3 major modules together before it is sent to the Test Cell for an engine run. The objective of this paper is to look into how the process of engine may be streamlined to reduce the overall turn around time (TAT). Some concepts and models adapted from an article “10 effective performance tools for 21st century managers” by Prof KC Chan (Reference 1) and the “Stage Gate System” by Robert R Cooper (Reference 2) will be incorporated to illustrate how to create an efficient system for the engine shop. The goal is to achieve at least 15% reduction in the TAT per engine. With a typical input of 100 engines per year, the target savings in number of labour days is approximately 900 days. Using the labour days multiplied by the cost of manhours (assuming US$70) will be the quantitative savings that is used to measure the outcome of the improved system (Figure...
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...fixing the short-terms problems a city faces: Senge leads us to change radically the way we think, so that cities can build sustainable organization climates. Truly understanding the principles of the learning organization will even drive us further than building organization climates for effective city-marketing… because city-marketing is merely a part of the whole issue of city-management and city-policy. I have thus to say right ahead, that I will not oppose any of Peter Senge’s fundamental ideas. I rather will insist on how essential his insights are, in order to avoid the misgivings of traditional modernistic thinking, which is too linear and fragmented to help us understand complex systems like cities. We will follow the plot of Senge’s book in its five parts: First getting to know the basic rationale for his plea, then understanding the value of systems thinking before grasping the usefulness of the four other disciplines Senge proposes; and finally addressing some issues arising from their implementation in learning organizations, to find out where this all leads us to. Part I: “How our actions create our...
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