How Systems Thinking Can Be Applied To Agile Transformations

Systems thinking is a popular buzzword today. We hear about it a lot and in different contexts: Healthcare, business, coaching, transformation initiatives etc.

In this article, we will try to understand the conceptual basics of system thinking and how it can be applied to the Agile transformation initiatives to get extraordinary results and the influence of system thinking on the agile practices. We will see the common problems that plague Agile transformation initiatives, and what could be an effective solution from systems thinking lens.

Systems thinking has already been established as a key management competency of the 21st century. Therefore, it is very rewarding to become ‘System-aware’ and ‘System-wise’.

Barry Richmond coined the term ’Systems Thinking’ in 1987. However, this became hugely popular through Peter Senge’s book: ‘The Fifth Discipline’.

This discipline helps us to see how to change systems more effectively. Systems Thinking is the art and science of making reliable inferences about behavior by developing an increasingly deep understanding of underlying structure.

System thinking examples includes ecosystems in which various elements such as air, water, movement, plants and animals work together to survive, whereas in organizations systems consists of people, structures and processes that work together to make an organization “healthy” or “unhealthy”.

Whether we want it or not, we are a part of many systems and interact with them on a continuous basis. A family, a team, an organization, an automobile, a tax system etc are examples of some system we are part of and interact with.

What is a system?

But what exactly is a system and how do we know when we see it? How can we use this to manage our organizations and initiatives better by using this knowledge?

A system can be defined as:

A group of interacting, interrelated or interdependent parts that forms a unified whole and has a specific purpose.

Let’s examine this definition closely and identify the characteristics of a system. These characteristics help in identifying the system:

• All systems have purpose
• All parts of a system must be present for a system to carry out its purpose optimally
• The order in which the parts are arranged, affects the performance of a system
• Systems attempt to maintain stability through feedback
• Whole is more than the sum of its parts
• “Whole” and “Part” are relative abstractions
• A system is always subject to redefinition by changing the perspective

Collection or system

Sometimes, we may tend to get confused between a system and a collection. When in doubt, always look for the interrelatedness, interdependence and purpose. If any of this is missing, you are more likely dealing with a collection, rather than a system. This may also change based on the assumptions we are making and the perspective of observation. The assumptions define the boundary of the system under consideration.

Let’s take an example: multiple types of fruits kept together in a basket is obviously a collection, as there is no interrelation or interdependence between the fruits, neither is there a goal of the fruit basket. However, let us change the perspective  and look at the fruit basket at a microscopic level. In this case, it becomes a system, as certain fruits interact with each other at a molecular level. This intermolecular interaction either aggravates or slow down the decay of certain fruits kept together. This is an example of how a system is always subject to redefinition by changing the perspective.

System diversity:

To simplify our understanding of the system, the system can be classified based on two factors: Structure (capability to understand) and Behavior (Capability to predict). In terms of structure, a system can be either simple or complicated, and in terms of behavior, a system can be either ordered, complex or chaotic.

We generally refer to the system as a combination of two factors, like Simple-Ordered, Simple-Complex, Complicated-ordered etc.

An organization can typically be classified as a ‘Simple-Complex’ system. This means that while the structure of the organization can be easily understood (simple), yet its behavior is moderately difficult to predict, primarily because of the presence of human interaction (complex).

System Thinking

This picture summarizes what could go wrong if we are not system aware. When we focus on local optimization and ignore the global impact, we create more problems for the future.

It is said that ‘today’s problems are yesterday’s solutions’. This is mainly the result of quick fixes, we create without considering the overall system.

Reality can be seen through the following levels of perspectives: Events, patterns and systemic structures. This can be represented as an Iceberg to put the system in context.

• Events are occurrences we encounter on a day-to-day basis.
• Patterns are the accumulated memories of the event. When viewed together as a series over time, they reveal recurring trends.
• Systemic structures are the ways in which the part of the system are organized. The events and patterns are usually generated by these structures.

We live in an event-oriented world and our language and actions are heavily rooted at the event level. Our decisions are majorly guided by events. In reality events are the results of deeper patterns and systemic structures. But these are not easily visible. Understanding where to act leads to a higher leverage action. A leverage point is a point where small change can yield large improvements in the system. As we go from events to patterns to systemic structures, the leverage increases.

Why is systems thinking important

• Better decisions on the addition or modification of services, or the applications based on how they affect the overall system and business.
• Understand what is important to the business based on the system.

Tools to constitute the interactions

System thinking uses some tools like feedback loops and behavior over time graphs to represent the interactions in the system. These can be thought of as the rules of grammar for the language.

Application of systems thinking in Agile transformation can help us map the organization as a system using the reinforcing and balancing loops and identify the right leverage points to act. The following points should be considered:

• Take a systemic view→ draw the system diagram
• Identify the central subject that needs attention. As a group, ideate on the different variables affecting the central theme or getting affected by it. Draw the causal loop diagram to identify whether it is a reinforcing loop or a balancing loop.
• Look out for leverage points→ an area where a small change can yield large improvement in the system
• Typically a leverage point at a pattern level will be high in impact than at event level and the one at the systemic structure level will have greater impact, than at the pattern level
• Look at the organization as a system and identify the system archetype
• Drawing the systemic structure helps in identifying the system archetype. Since structure influences behavior therefore, this knowledge is key to understanding the system behavior and thus the right leverage points.
• Look for (and address) causes not the symptoms.
• Although we live in a event driven world, yet as system thinkers, our focus should be on identifying the patterns and systemic structures and act thereon. Today’s problems come from yesterday’s solutions hence localized solutions merely shift the problem from one part of the system to the other

The following table gives a mapping between the level of perspective, and the action modes. The leverage decreases as we move from top to bottom in the table.

Levels of perspective	Action mode
Systemic structures	Creative
Patterns	Adaptive
Events	Reactive

Principles of system thinking:

A system is:

• Created by the nature or human beings
• Physical, abstract, or human
• A whole separated from its environment by a border

Always remember:
The harder you push, the harder the system pushes back.

Be sensitive towards the compensating feedback: When well-intentioned interventions result in responses from the system that offsets the benefits of the interventions.