1. Introduction to Systems Thinking

2. Zaipul Anwar Bin Zainudin Lecturer in Institute of Product Design & Manufacturing, (IPROM) Universiti Kuala Lumpur Tel: 03-27154715, 019-3262427 Email: zaipul@gmail.com Website: http://www.zaipul.com Blog: http://zaipul.com/category/blogs Facebook: http://www.facebook.com/zaipul You may download softcopies of all my materials in this session from this link: http://www.zaipul.com/download/tech-innovation-mgt/ - To verify the URL, go to ‘Download’ link at my website Zaipul.com ABOUT THE SPEAKER

3. “The significant problems we face today cannot be solved at the same level of thinking at which they were created.” Albert Einstein Albert Einstein

4. Founded in 1956 by MIT professor, Jay Forrester. System thinking allows people to make their understanding of social system explicit and improve them in the same way that people use engineering principles to improve their understanding of mechanical system. It is use to:- Examining how we create our own problems Examining how we create our own problems Seeing the big picture Seeing the big picture Structure influences performance Structure influences performance WHAT IS SYSTEMS THINKING?

5. SYSTEM THINKING APPROACH Traditional analysisSystems thinking Traditional analysis focuses on the separating the individual pieces of what is being studied; in fact, the word “analysis” actually comes from the root meaning “to break into constituent parts. Systems thinking, in contrast, focuses on how the thing being studied interacts with the other constituents of the system—a set of elements that interact to produce behavior—of which it is a part.

6. Complex problems that involve helping many actors see the “big picture” and not just their part of it Recurring problems or those that have been made worse by past attempts to fix them Issues where an action affects (or is affected by) the environment surrounding the issue, either the natural environment or the competitive environment Problems whose solutions are not obvious Examples of area System Thinking has proven its value include:

7. Encourages us to see the whole as well as the parts. Systems Thinking Learning to see the world systemically ?? !!! WHOLE   PARTS  Holistic Thinking Multiple (often) restricted views

8. Systems Thinking… Webecoist.comMax Barret Helps us explore interdependencies and looking for patterns.

9. Systems Thinking… River Fractal - Héctor Garrido Helps us understand feedback structures that change systems over time.

10. Systems Thinking… http://www.systems-thinking.org/theWay/theWay.htm Helps us understand results of our decisions…

11. Causal Loop Diagrams A useful way to represent dynamic interrelationships Provide a visual representation with which to communicate that understanding Make explicit one's understanding of a system structure - Capture the mental model SYSTEMS THINKING TOOLS

12. Variables - an element in a situation which may act or be acted upon  Vary up or down over time (not an event)  Nouns or noun phrases (not action words) Links / Arrows - show the relationship and the direction of influence between variables S's and O's - show the way one variable moves or changes in relation to another  S stands for "same direction”  O stands for "opposite direction” or B - Balancing feedback loop that seeks equilibrium or R - Reinforcing feedback loop that amplifies change Components of Causal Loop Diagrams

13. Employee Performance Supervisor’s Supportive Behavior Unsupportive Behavior Structure S S Reinforcing Loop Reinforcing Loop Perf. Level Time Behavior Over Time Supportive Behavior Employee Performance Supervisor’s Supportive Behavior Types of Causal Loop Diagrams

14. Discrepancy Inventory Adjustment Structure Actual Inventory Desired Inventory Desired Inventory Time Behavior Over Time 100 100 - - 100 ++ Actual Inventory S S S O Balancing Loop Types of Causal Loop Diagrams

15. A class of tools that capture the "common stories” in systems thinking Powerful tools for diagnosing problems and identifying high leverage interventions that creates fundamental change SYSTEMS THINKING ARCHETYPES

16. 1. Fixes that Fail / Backfire 2. Limits to Growth/Success 3. Shifting the Burden / Addiction 4. Tragedy of the Commons 5. Drifting Goals List of System Thinking Archetype

17. Unintended Consequences Fix Problem Symptom Delay S S S O Time Behavior Over Time 1. Fixes that Fail

18. Breaking a “Fixes that Fail” cycle usually requires two actions: acknowledging that the fix is merely alleviating a symptom, and making a commitment to solve the real problem now. A two pronged attack of applying the fix and planning out the fundamental solution will help ensure that you don’t get caught in a perpetual cycle of solving yesterdays “solutions”

19. Positive Reinforcement Structure Perf. Level Time Behavior Over Time Corrective Action Target Diminishing Returns “Burnout” Growing Action Actual Performance S S S O S 2. Limits to Growth

20. Potential Customers Market Exposure to Potential Customers Sales S S O S 2. Limits to Growth Market Size S

21. 3. Shifting the Burden Quick fixes Problem/symptom Source of problem /Root cause Side effects + _ _ + _ + + _ _ Efforts Quick fix Time Behavior Over Time Capacity of system to fix itself Problem symptom

22. 3. Shifting the Burden Apply Patches Damage of Road Proper Road Contruction Feeling of Okay + _ _ + _ + + _ _ Apply patches Time Behavior Over Time Proper road construction Damage of road

23. 4. Tragedy of the Commons Total Activity Gain per Individual Activity Resource Limit O S S S Time A B A’s Activity B’s Activity Net Gains for B S S S S Net Gains for A S S

24. 4. Tragedy of the Commons Investment in Integration Perceived Success from Integration S O O Time A B Investment in features S S S S O O Success from Product Investment Success from Product Investment in features Fixed Budget Fixed Budget Investment in Integration DELAY S S

25. Solutions for a “Tragedy of the Commons” never lie at the individual level (The Libertarian Nightmare ) What are the incentives for individuals to persist in their actions? Can the long-term collective loss be made more real? Find ways to reconcile short-term individual rewards with long-term cumulative consequences 4. Tragedy of the Commons

26. 5. Drifting Goals Goal Pressure to Lower Goal Gap Corrective Action Actual S S O S O S Delay Time Goal

27. 5. Drifting Goals Drifting performance figures are indicators that the “Drifting Goals” archetype is at work and that real corrective actions are not being taken. Understand how goals are set

28. 5. The Boiled Frog If you put a frog in boiling water, it will hop out immediately If you put a frog in cold water and slowly bring the water to boil, the frog will unwittingly enjoy its last blissful warm bath

29. Perceived Desired Temperature Tolerance for Temperature Gap Hop Out Time Temp S S O S O 5. The Boiled Frog

30. If you put a frog in cold water and slowly bring the water to boil the frog will jump out when it gets uncomfortable. If you put a frog in boiling water, it will croak immediately. 5. The Boiled Frog

31. Systems Thinking Case Study Crop Damaging by Insects

32. When an insect is eating a crop, the conventional response is to spray the crop with a pesticide designed to kill that insect. Putting aside the limited effectiveness of some pesticides and the water and soil pollution they can cause, imagine a perfect pesticide that kills all of the insects against which it is used and which has no side effects on air, water, or soil. Is using this pesticide likely to make the farmer or company whose crops are being eaten better off? Reducing Crop Damage by Insects:

33. Insects Damaging Crops Pesticide Application O If we represent the thinking used by those applying the pesticides, it would look like this: 1.The letter indicates how the two variables are related: an “s” means they change in the same direction - if one goes up then the other goes up, and an “o” means they change in the opposite direction - if one goes up then the other goes down (or vice versa). 2.This diagram is read “a change in the amount of pesticide applied causes the number of insects damaging crops to change in the opposite direction.” 3.The belief being represented here is that “as the amount of pesticide applied increases, the number of insects damaging crops decreases”.

34. Total number of Insects damaging crop Pesticide Application S O S Number of Insect A Damaging Crop Number of Insect B Damaging Crop S S O Reducing Crop Damage by Insects:

35. 4.The problem of crop damage due to insects often does get better - in the short term. 5.Unfortunately, what frequently happens is that in following years the problem of crop damage gets worse and worse and the pesticide that formerly seemed so effective does not seem to help anymore. 6.This is because the insect A that was eating the crops was controlling the population of another insect B, either by preying on it or by competing with it. 7.When the pesticide kills the insects A that were eating the crops, it eliminates the control that those insects were applying on the population of the other insects, insects B). 8.Then the population of the insects B that were being controlled explodes and continue to damage the crops.

36. So now how do you solve the problem of Insect B damaging the crop? Find the solution….. Reducing Crop Damage by Insects:

37. With this picture of the system in mind, other actions with better long-term results have been Integrated Pest Management developed, such as Integrated Pest Management, which includes controlling the insect eating the introducing more of its predators into the crops by introducing more of its predators into the area area. These methods have been proven effective in studies conducted by MIT, the National Academy of Sciences, and others, and they also avoid running the risk of soil and water pollution. Reducing Crop Damage by Insects The solution:

38. THE FIVE DISCIPLINES To more about Systems Thinking, read this book! Team Learning Personal Mastery Mental Models Shared Vision Systems Thinking

39. References Warfield, J. Societal Systems, Intersystems, 1989. Joseph O’Connor & Ian McDermott. The Art of Systems Thinking, Thorsons, 1997. Senge, P.M.  The Fifth Discipline: The Art & Practice of the Learning Organization, Doubleday, 1990.  The Fifth Discipline Fieldbook: Strategies and Tools for Building A Learning Organization, Doubleday, 1994. System Dynamics / Systems Thinking Mega Link List http://www.uni-klu.ac.at/users/gossimit/links/bookmksd.htm The Way of Systems (System Archetypes) http://www.outsights.com/systems/theWay/theWay.htm Daniel Aronson, Overview of Systems Thinking, 1996-8 http://www.thinking.net http://www.thinking.net