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 or + stands for "same direction”  O or - 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. Example: An example would be fixing problem of a squeaky wheel. Imagine someone who knows nothing about mechanics, mistakenly grab a can of water and splash it on the wheel. With great relief the squeaking stop for a while, it will return more loudly as the water join forces to rust the joint.

19. 1. Fixes that Fail Prescriptive actions: Increase awareness of the unintended consequences Increase awareness of the unintended consequences Cut back on the frequency with which you apply the ‘fix’ Cut back on the frequency with which you apply the ‘fix’ Try to minimize the undesirable consequences Try to minimize the undesirable consequences Reframe and address the root problem, give up the fix that works only on the symtom Reframe and address the root problem, give up the fix that works only on the symtom Breaking ‘fixes that fail’ merely alleviating a symptom, not really solving the problem. A two pronged attack of applying fix and finding fundamental solution will help to break the problem. Breaking ‘fixes that fail’ merely alleviating a symptom, not really solving the problem. A two pronged attack of applying fix and finding fundamental solution will help to break the problem.

20. 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

22. Example: At the beginning of a quality improvement campaign, significant gains in quality and productivity were achieved. Once this achieved, the level of improvements plateaus. The next wave of improvements are more complex and tougher to manage. Later the lack of organization-wide support leads to limited/diminishing quality and productivity of the whole organization (it becomes stagnant or diminish).

23. 2. Limits to Growth Prescriptive actions: Beware of doing more of what worked in the past. Beware of doing more of what worked in the past. If your growth has stalled, look at both reinforcing and balancing loops to try to find interrelationships between your success strategies and potential limits. If your growth has stalled, look at both reinforcing and balancing loops to try to find interrelationships between your success strategies and potential limits. Look for other potential engines of growth. Look for other potential engines of growth. The real leverage in ‘limits to growth’ scenario lies in its early phases. The real leverage in ‘limits to growth’ scenario lies in its early phases. The choice between plateauing or peaking often depends on length of balancing loop delay and our response to it. The choice between plateauing or peaking often depends on length of balancing loop delay and our response to it.

24. 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

25. 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

26. 3. Shifting the Burden Example: Problem of pot holes on the road. The problem is handled by applying patches with immediate effect, thereby solving the problem for a while. The primary source of the problem is overlooked, that is the overall quality of the road construction. The origin of the problem should be identified and should be identified and solved in the long-term run solved in the long-term run or else the quality of the or else the quality of the road will be further road will be further diminished. diminished.

27. 3. Shifting the Burden Prescriptive actions: Strengthen the long-term solution. Strengthen the long-term solution. If possible, support only long-term solution. If you must address the symtoms right away, do so with restraint. If possible, support only long-term solution. If you must address the symtoms right away, do so with restraint. As you strengthen long-term capability, do what you can to reduce dependency on the short-term fix. As you strengthen long-term capability, do what you can to reduce dependency on the short-term fix.

28. 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

29. 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

30. 4. Tragedy of the Commons Example: Traffic jam in Kuala Lumpur. Everyone wishes to avoid traffic jam will use the highway. At first there is room for everyone, but after sometimes critical threshold has been reached, each driver brings about decrease in average speed. As individuals each person feels he or she is a victim of traffic but in effect they all conspired as a group to create traffic jam.

31. 4. Tragedy of the Commons Prescriptive actions: In any of the ‘tragedy’ situations, there must be an overriding legislation for common good. In any of the ‘tragedy’ situations, there must be an overriding legislation for common good. To protect common resources some form of regulation should be introduced. To protect common resources some form of regulation should be introduced. Re-evaluate the nature of the commons to determine if there are ways to replace, renew or substitute the resources before it becomes depleted. Re-evaluate the nature of the commons to determine if there are ways to replace, renew or substitute the resources before it becomes depleted.

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

33. Perceived Desired Temperature Tolerance for Temperature Gap Hop Out Time Temp S S O S O 5. Drifting Goals

34. Example: If you put a frog in cold water and slowly bring the water to boil the frog will jump out when it gets uncomfortable or even died in the boiling water If you put a frog in boiling water, it will croak IMMEDIATELY. it will croak IMMEDIATELY. 5. Drifting Goals

35. Prescriptive actions: Establish a clear transition plan from current reality to the goal including realistic timeframe to achieve the goal. Establish a clear transition plan from current reality to the goal including realistic timeframe to achieve the goal. Determine whether the drift in performance is the result of conflicts between the stated goal and implicit goals in the system. Determine whether the drift in performance is the result of conflicts between the stated goal and implicit goals in the system. Anchor the goal to an external frame of reference (benchmarking). Anchor the goal to an external frame of reference (benchmarking).

36. Systems Thinking Case Study Crop Damaging by Insects

37. 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:

38. 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”.

39. 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:

40. 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.

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

42. 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:

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

44. 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