Sunday, October 5, 2014

Systems Thinking: One of the Keys for Leaders at the Top

One of the most important skills that a leader at the top of any organization can possess is the ability to "see the forest for the trees." While employees may only notice issues, problems, and opportunities in their own small circle, leaders at the top of an organization must be adept at seeing the whole picture--how interconnected relationships and interrelated processes span the entire organization. In other words, the leader at the top must be able to notice how decisions in one area of an organization have a vast effect on all of the other areas of the organization.In the leadership literature, this key skill is known as "systems thinking."

History of the Concept of Systems Thinking

The idea of systems thinking spans more than two millenia, dating back to the writings of Aristotle. His ideas regarding unity were what spawned this revolution in thinking.(Footnote 1). For Aristotle, systems (such as the human body) were made up of collection of unified parts that worked together and were interconnected (Metaphysics, 1045a14-15). 

The foundational principles of unity that Aristotle espoused served as the groundwork for many later scholars (Ropohl, 1999). His views on unity played a major role in shaping the thinking of later theorists such as Kant, Hegel, and Goethe (Gupta, 2009, p. 44). In addition to these thinkers, Aristotle's contributions also played an important role in shaping the views of Ludwig von Bertalanffy, who was the father of modern systems theory (p. 44).

While Aristotle's examples may have been of simple composite substances for the most part (e.g. a house), the potential remained to apply the principles he elucidated to much larger, more complex systems. Von Bertalanffy and later systems thinkers felt that Aristotle's holistic views could form the basis for a new, interdisciplinary field of study that focused on the interrelationships within systems (Mele, et al., 2010, p. 126). Using these basic ideas, Von Bertalanffy, a biologist, argued that the integrated biological systems he was studying could provide insight into systems in other areas of academia (Jackson, 2003, p. 6). Over time, scholars in other disciplines began to use his ideas to form a discipline of systems thinking that focused on the unified, interrelated nature of systems (pp. 7-11). Thus, as an interdisciplinary field, systems thinking began to look at systems in engineering, business, medicine, mathematics, and many other fields (Mele, et al., 2010, p. 129).

Following in the footsteps of Aristotle, these systems thinkers also began to utilize systems thinking in the fields of management and leadership (Bolta, 2009, p. 78). Traditional management theory, in particular, typically focused on organizing and managing discrete departments of an organization efficiently (p. 78). Thus, these traditional management theories were limited by the fact that they focused on individual or departmental achievement rather than achievement on a broad scale across an organization. In introducing the ideas of systems thinking into these fields of management and leadership, the ideas of Aristotle began to infuse the way management and leadership theorists viewed organizational behavior (Mele, et al., 2010, p. 126).

These theorists began to look at organizations as unified organisms, and focused on how actions in one sector of an organization could have unintended consequences in other sectors of the organization (Senge, 1990, p. 84). As Peter Senge, one of the foremost authors in this field, stated: "Systems thinking is a discipline for seeing wholes…a framework for seeing interrelationships rather than things, for seeing patterns of change rather than snapshots" (p. 68). Thus, he felt that leaders and managers should focus on how to make decisions that positively affected the entire unified system, and should learn how to see the multi-layered effects of their decisions. For Senge, the key to utilizing systems thinking for organizational growth lay in creating a "learning organization," where people were continually learning how to think more collectively, plan with the whole system in mind, and work towards common goals. In such a learning organization, Senge felt that the collective IQ of the group would be greater than the sum of the parts, and would enable leaders to make informed decisions that brought the best information from many sectors into play.

Other scholars have focused on recommendations such as balancing long-term and short-term goals within a system, understanding hidden factors that affect organizational health, and seeing the cyclical nature of how individuals in a system interact with each other (Khyrina, Burairah & Abd Samad, 2012, p. 386). On the other hand, some scholars argue that there are really four main strands of systems thinking today: 1) theories that focus on optimizing organizational structure, decision-making and goal-setting from a systems perspective; 2) theories that focus on understanding differing viewpoints within a system; 3) theories which focus on fairness to minority stakeholders within a system; and 4) postmodern approaches which focus on plurality and diversity within a system (though scholars attest that it is debatable whether these postmodern approaches are truly systemic in nature) (Jackson, 2003, pp. 25-27). While these differing theories focus on various goals, structures, and people within an organizational system, all of them (with the exclusion of postmodern systems theories) focus on finding unity within the system and understanding the interplay between the elements that make up the whole. Thus, these systems approaches help managers and leaders within an organization find ways to structure their business models and relationship models in such a way that the health of the entire organizational system is optimized. In this way, these theories apply the foundational concepts of unity espoused by Aristotle to the modern-day context of leadership, management, and organizational behavior (Mele, et al., 2010, p. 127). By using these ancient ideas from Aristotle, systems thinkers are able to create systems that promote holism, cohesion, and environments where ideas from many different areas of a company are utilized to promote the overall well-being of the entire organization.

Modern Application

Peter Senge's (1990) model of systems thinking is particularly helpful for modern leaders. The key theme behind Senge's The Fifth Discipline is that of a "learning organization," where groups of individuals in an organization begin to learn together and see the larger whole in a more comprehensive way.  His premise is built upon the idea that only those companies who learn faster than their competitors will be able to survive in a modern global economy (p. 4).  Thus, Senge's theory is that companies must foster this type of learning organization by ensuring that all of their people practice the five disciplines that he outlines in this work: a) systems thinking; b) personal mastery; c) mental models; d) building a shared vision; and e) team learning (pp. 5-10).  He states that such thinking requires a collective "shift of mind" in the organization (p. 13).  Likewise, this model requires individuals to overcome their organizational "learning disabilities"--such as focusing on external enemies rather than internal failures, fixating on short-term events rather than the larger picture, and seeing oneself as only having a narrow purpose in the organization (pp. 18-22).

In Senge's mind, the most important discipline for any organization is that of systems thinking.  This discipline revolves around the idea of seeing the larger whole, understanding interrelationships between the parts of the whole, and seeing patterns in how the parts react together (p. 68).  Thus, he likens an organization to a complex living organism that must be balanced to achieve success (p. 84).  Each action causes a reaction and the interplay between the actions and reactions can best be understood, Senge argues, by thinking of them as a circle diagram wherein each result cyclically affects the other component parts of the whole (p. 82).  In a learning organization, managers and leaders use systems thinking to see patterns of actions and reactions and understand how to leverage those situations in the future (pp. 94-95).


While seeing the "forest for the trees" is not easy, it is absolutely vita for the health of an organization. For this reason, it is one of the core leadership skills that is needed in our global economy. As companies span international borders and workforces become increasingly more diverse, it will be the leader who can see the "whole" that will succeed in the complex environment of tomorrow.


F1 - Whereas his predecessor (and teacher), Plato, had seen form and matter as being separate, Aristotle boldly stated that matter and form were one--there was a "unity" of substance (Scaltsas, 1994, pp. 114-115). As he famously put it, when a heap of bricks, stones, and mortar are assembled together, they can become a unified whole in the form of a home (Metaphysics1041a25-32). In his view, the sum of these building materials (i.e. the unified house) was more than the individual parts (Metaphysics, 1041b12-17). Instead, the parts, when joined together, became interconnected; they became "re-identified" according to their special role in the unified substance (p. 108). Instead of merely representing an unconnected amalgamation of loose parts, the individual elements were integrated together and jointly formed a substance that was more than the sum of the individual parts (Fine, 1994, p. 34; Haslanger, 1994, p. 136).

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