Thursday, October 27, 2011

Using Systems Thinking to improve organisations

The ability to lead and manage is sometimes compared to team sports like basketball and football.  Often the abilities of sports captains, players, and teams are exampled as to what makes a great performance.  

Yet coaches understand that a team’s performance depends on a range of supporting systems:  A system of playing on the field that optimises players and team capability and opponent weaknesses; a system of selecting, training, and developing players; a system that engages and commits players to do their best, and so on.

While leaders and managers understand their organisations similarly perform, learn, and improve based on underpinning systems, a conscious approach to managing change and achieving high performance through systems – a Systems Thinking (ST) approach - seems less discussed.

A system can be described as having a purpose and made up of various interrelated or interdependent factors, such as activities and interactions.  The arrangement and performance of these system’s factors affect the performance of the overall system, as does its ability to receive and use feedback.

Systems Thinking (ST) Approaches describe how organisational systems perform and ways to improve them.

There are three approaches to organisational systems, some you may recognise immediately and others you may not:

1.  Functional Systems Approach

Functional systems have an end-to-be achieved, where the system is designed to achieve that objective.

Functional systems are found everywhere in organisations, and provide the basis for developing standards of repeatable best practice and outcomes. 

They are mainly recognised as “management systems” that include policies, procedures, and plans.  For example, manufacturing production systems; project management systems; financial management systems; information management systems; employee performance management systems; and corporate performance management systems.  

Sometimes these are built into even bigger systems – frameworks- such as IT Enterprise Architectures involving Portfolio and Project Management (PPM), Information Technical Infrastructure Library (ITIL) and ISO Standards.

Functional systems provide consistency through standards of service delivery, and means of improving that service delivery.  They are rational and events based systems.  These systems are often process level focused though can also include issues at an organisational, role, and employee level.  In any case the cause and effect of a benefit or problem is direct and traceable in a deductive, and linear (or algorithmic) fashion.  For example, Key Performance Areas (KRAs) and Indicators (KPIs) can be linked within management systems across an organisation and used to report on, manage, improve performance, and reward.

Methodologies to improve functional systems include:
  • System audits e.g. ISO Standards auditing by second or third parties. Sample explanation at
  • Process activity “waste” reduction e.g. “Lean” and Six Sigma in services (e.g. 30% to 50% of the cost in service organisations relates to slow speed or rework). Sample explanation at
  • Customer relationship health & satisfaction e.g. Service Blueprinting. Sample explanation at
  • Enterprise Health (organisation, process, and job level) e.g. Human Performance Systems of Rummler & Brach, IPSI. Sample explanation at
  • Integrated process improvement models e.g. Capability Maturity Models such as CMMI, P3M3.  Sample explanation at

2.  Structural Systems Approach

Structural systems can be used to plan improvements in decision making within the organisation.  Such systems look beneath and beyond the surface events that, for example, Functional Systems look at.

Such systems use analysis in a way that highlights underlying patterns in relationships.  Structural system relationships show up as “links” and “loops” that, in a “non linear” way, result in predictable cause and effects. 

For example, repeating patterns where “quick fixes” continually back fire causing delay and distress, yet remain repeated by management; where the obvious (repeated) “fix” results in subsequent unintended severe consequences due to unforeseen circumstances; where there is entrenched deep conflict between individuals or their issues; where crucial and important advice in decision making is continually left out; and where organisations remain in continual crisis and don’t improve because key elements underpinning and affecting their viability remain overlooked and not understood.

Methodologies to improve management decision making and planning include:

  • Archetypal” behaviour in decision patterns based on System Dynamics.  Sample explanation at
  • Social Value Networks identifying patterns in employee and group value contribution (e.g. VNA). Sample explanation at
  • Viable Systems Model (VSM) based on the way an organisation needs to be designed to survive in a changing environment. Sample explanation at 

3.  Interpretive Systems Approach
Interpretive Systems model "reality" built from differing views (pluristic perspectives) of the system's stakeholders, as opposed to objective, tangible, and observable characteristics of a system taken from a single view (unitary perspective), such as that of management, as is found in Functional and Structural system approaches.

Interpretive systems can handle complex, or “messy”, problems or situations and look at both human designed systems (such as systems of work) and social systems (such as workplace relationships).  

In doing so they can include characteristics of, for example, Functional systems but also, equally, include characteristics from the organisation’s social systems, like prevailing management and employee attitudes & behaviour. 

In the process of developing such preferred Interpretive systems, the (subjective) views of the stakeholders and their issues in relationships with others and the “objective” organisational issues (such as problems with work systems) draw in full stakeholder involvement, and develop outcomes that resolve differences affecting performance.

This is an “emergent” process addressing system contradictions and participant expectations.

Methodologies to handle complex or "messy" problems include:
  • Strategic Options Development and Analysis (SODA) for improved resolution of planning and policy issues.  Sample explanation at
  • Interactive Planning Methodology (Ackoff).  Sample explanation at
  • Social Systems Design (Churchman).  Sample explanation at
  • Soft Systems Methodology (SSM) of Peter Checkland.  Sample explanation at
  • Human Activity Systems (HAS).  Human Activity System (HAS) modelling can be applied to a wide range of organisational performance issues. Sample explanation at

4.  A  Systems  Thinking  Maturity  Model 

The three Systems Thinking Approaches may also be compared in other ways, refer to Figure 1 below:


In Figure 1 the vertical axis reflects different ways cause and effect (causal relationships) can be viewed:
  • Simple refers to observable direct cause and effect relationships.
  • Complicated refers to predictable but indirect cause and effect relationships; and
  • Complex refers to unpredictable cause and effects, where causal relationships can only be seen retrospectively.
  • Chaotic refers to where no system operates, resulting in crisis management and ad hoc decisions.
The vertical axis reflects a hierarchy where characteristics of a lower level system's approach can be found in a higher system approach. Where the different system approaches fold in within each other.  For example, Functional system approach characteristics can be contained within Structural system approach characteristics, and these in turn can both be contained within Interactive system approach characteristics.
    The horizontal axis reflects the underlying Unitary or Pluristic perspectives applied within the three Systems Thinking approaches.  Both Functional and Structural system approaches take a single common - unitary- perspective to problems (e.g. a management view).  Interpretive systems consider and address the differing and sometimes conflicting multiple- pluristic-  views of stakeholders.


    This blog is mainly based on an article by Professor Mike Jackson Fifty years of systems thinking for management found at 

    A more detailed supporting publication by Professor Mike Jackson is Systems Approaches to Management found at