Saturday, January 26, 2019

Systems Thinking and Digital Management

 Be aware of the hypothetical imperative for thinking systemically to embrace emerging properties, create alternatives, act on the imperative by constraining possibilities while aiming at its ends.

Systems Thinking is a representation of how we see patterns in life, it is also an emergent property of the basic aspects of nature, layer on layer of systems, each with their own emergent behavior, coming together to create super systems we interact with daily. Systems thinking can help today’s top business leaders and managers develop systems approaches to either make effective decisions or solve complex business problems in a structural way. Because Systems Thinking helps to create common rationale ground between different perspectives, understand the interconnectivity between parts and the whole, thus, systematic problem-solving has a better chance to solve the real problem with less side effects. Here are the multiple perspectives on how to leverage systems thinking in digital management.

Focus on the emergence and emergent properties and how those are created: In systems theory, a system is conceived as a process whereby larger entities, patterns, and regularities arise through interactions among smaller or simpler entities that themselves do not exhibit such properties. Business is a system, and there are two most basic systemic structures which are the balancing cycle and growth cycle, and their emergent characteristics just happen to be balance and growth. Synergy is the business term for a desirable emergent property. Businesses are always on and hyperconnected, they have to enable the desirable emergent property being built via certain business activities or process tuning. In practice, the traditional management approach based on the reductionistic theory (the whole is equal to the sum of pieces) with the reductionist toolkit perhaps doesn’t fit the tasks. It’s important to leverage system approach, light up the digital full cycles and emerging properties (trends, opportunities) to create the business synergy for ensuring that the business as a whole is superior to the sum of pieces.

Think holistically and synthetically, understand the parts by reference to the whole rather than the other way round: Systems Thinking is important for the management to understand the interconnectivity between parts and the whole, look at each function in the enterprise as a system and then, discover a unified means of looking at the business essence. Modern digital organizations are not just the sum of functional pieces, but an integral whole to maximize their performance. From a problem-solving perspective, behind every problem is a relationship dynamic out of the alignment. Thus, understanding the interconnectivity of systems and relationship dynamics are important for both diagnosing the real cause of problems and solving them in a structural way. Systems Thinking helps digital leaders discover the interconnectivity and interdependence of the digital business ecosystem, and ensure that the digital business as an organic system growing and evolving with its environment in harmony.

Focus on the nature of relationships rather than just on entities: Leveraging systems thinking in digital management is to understand the nature of relationships to ensure the enterprise is connected to all appropriate eco-system, lattice, or otherwise, touchpoints, for improving business flow. It’s about seeing interrelationships rather than isolated things, understanding patterns of changes rather than static “snapshots.” With highly efficient collaboration platforms and tools, today’s organizations are at a crossroads where the segregation or silo of business units are at a need to reach across the aisles and respectively work with each other. Business needs to manage multi-layer and multi-dimensional relationships such as cross-functional relationships, vendor relationship, customer relationship, and other important shareholder relationships, etc, in a structural way. From a broader systems perspective, it’s about understanding how relationships, ecosystems, market dynamics, and the connections between business units, focus on managing a portfolio of relevant cross-border strategic synergies and business interdependence with the appropriate mix of enabling organizational elements and maintaining the right level of digital balance.

Model nonlinear rather than just linear cause and effect relationships: When systems are not just about linear relationships, they are defined as nonlinear dynamic. Digital enterprises are inherently and intensely complex. They act as complex and unpredictable systems, amplify or ameliorate the effects of others and shape business structures and systems. It’s important to leverage systems thinking to understand nonlinearity as the very characteristic of digital business. Systems Thinking helps to search for meaningful relationships both within these subsystems and between them; monitor and observe links and feedback systems. This probably means organizations are going to have to get not only the “hard numbers” right but more importantly, how to manage intangible or invisible elements in business as well. If you only take the visible aspects of digital management - the tip of the iceberg alone as a business success factor, you may miss the point and well-head to the troubles.

Explore multiple perspectives: Systems Thinking is about discovering the patterns and interconnectivity via understanding things from multifaceted perspectives. In the “VUCA” digital era, It is no surprise to create thinking gaps by imperfect people using imperfect processes via the narrow lenses or short-sighted vision. It is critical to be able to 'step outside' of the system and adopt different perspectives to gain an in-depth understanding. For humans to move to higher ground, we must have a different view, but share the common ground as well. Systems Thinking engenders new perspectives or actions as part of the process of creating a cross-disciplined understanding. We all have a cognitive bias, whether individually or collectively. Systems Thinkers have a better chance to be objective and gain empathy by leveraging multiple perspectives and embracing different views of certain topics or problems that occur.

Ability to shift focus repeatedly and fast, from the whole to the detail elements and their relationships: A systems view of the world encompasses the impacts and consequences of our thinking and actions. System thinking is an approach to how we view nature. It is a tool, maybe even an algorithm of how the universe actually works. It is both a detailed and holistic picture. Systematic approaches are also made from a much broader and encompassing view that is not possible with linear thinking. For example, leveraging systems thinking to design an implementable business model is the scenario moving from abstract to detail level. Though a business model is an analytical object that demonstrates exactly how the numbers work, there is value in considering the different elements of a business model at a slightly higher level of abstraction.


Define the boundary; interconnections and interdependencies are distinguished, wise choices and decisions are made: The black and white boundaries continue to diminish in the 21st century due to the occurrence of increased economic integration among nations, people movement across cultures. Anywhere in the world, the systems and procedures apply and impose boundaries between those who teach and those who learn, those who lead and those who follow, those who have power and those who are powerless. Boundaries are indeed a very broad term that encompasses all sorts of things, strict or fluid; boundaries can be good, bad, or indifferent depending on the application. We all bring different perspectives and our boundaries might have changed based on open conversations and taking the time to thoughtfully think about the specific issue of boundaries. The goal of leveraging systems thinking to define the boundary is to focus on problem-solving by understanding the interconnections and interdependencies within or between systems, to ensure the digital boundaries are not sharp lines or black & white, but cursive and fluid for adapting to changes.

By leveraging Systems Thinking, digital leaders and managers can have both broader scope of the open system and an in-depth understanding of problem-solving business continuum. The focal point of digital management is based on the future trend, based on the varying situations; based on what the system requires for its long-term sustenance. Be aware of the hypothetical imperative for thinking systemically to embrace emerging properties, create alternatives, act on the imperative by constraining possibilities while aiming at its ends.


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