Understanding Systemic Thinking Teaching People to Think in a World With Interdependent Variables Presented By: J. Brian Atwater

“If we knew what it was we were doing, it would not be called research, would it?!” Albert Einstein

Some Evidence That Current Education & Training Methods Are Not Adequate  A recent study showed there was no correlation between receiving an MBA and long-term career success.  Several studies have shown that people struggle to reason through even simple situations with feedback loops.  The average tenure of a CEO in a Fortune 400 firm is 18 months. In 2000 alone 40 CEOs of Fortune 200 firms were fired or asked to resign.  An average of 30 Companies drop off the Fortune 500 every year.  For every successful new business start up there are 22 failures  The average life span of a business that survives the start up phase is 11.5 years. The average life of a company on the S&P 500 is only 25 years.

Science is wonderfully equipped to answer the question "How?" but it gets terribly confused when you ask the question "Why?" Erwin Chargaff

How Faculty in the top 50 U.S. Business Schools Define Systems Thinking

Systems Thinking Defined  Ackoff – Creating the Corporate Future “Synthesis focuses on function, it reveals why things operate as they do.” Identify the containing whole of which the unit being studied is a part. Explain the behavior or properties of the containing whole/system Explain the behavior or properties of the unit in terms of its role or function within the whole/system.  Richmond – The Thinking in Systems Thinking Dynamic Thinking – Framing an issue as a pattern of behavior over time System-as-Cause Thinking – Placing responsibility for a behavior on internal rather than external factors. Event vs. System Structure Forest Thinking – Understanding the context of the relationships related to an issue. Operational Thinking – Assessing causality not correlation Closed Loop Thinking – Seeing causality as the result of interdependent variables rather than independent variables Quantitative Thinking – Accepting that you can always quantify even when you can’t measure. Scientific Thinking – Recognize that all models are working hypotheses that have limited applicability.

Characteristics of Complex System Behavior  Cause & effect are often separated both in terms of time and space.  Problem resolutions that improve a situation in the short term often create bigger problems in the longer term and actions that make things worse in the short term often have long-term positive affects.  Because of the first two characteristics, people often do not learn from their mistakes. Long time delays often result in one person creating a cause and another experiencing its ultimate effect. Due to the differences in short and long term effects what a person learns from the short-term result of a decision is completely different from the true long-term outcome.  The subsystems and parts of a system interact using multiple, nonlinear feedback loops. This complex flow of interactions often creates counterintuitive behavior.

Why Isn’t Systems Thinking Better Integrated Into Business Curricula  We Hypothesize Three Issues: Professors are not familiar with the tools and methodologies related to Systems Thinking. Professors are familiar with the tools and methodologies related to Systems Thinking, but feel curricula is already overloaded. Professors are familiar with the tools and methodologies related to Systems Thinking, but don’t feel they are applicable to their field.

Professors Are Unfamiliar With The Tools & Methodologies Related To Systems Thinking.  If faculty are exposed to the concepts through education and research publications increased recognition will occur.  Unfortunately, current publication environment is an example of the classic Success-to-Successful Archetype Papers published focusing on functional specialization, quantifiable variables, & statistical correlation methodology Instead of systems orientation Researchers trained using traditional methods Research conducted using traditional methodology Researchers trained using systems orientation Research conducted using systems orientation - + -

Common Complaints Concerning Business Research  It is too functionally isolated!  It focuses too heavily on correlation-based techniques and never moves into causation!  It ignores factors that can not be easily quantified! ST methodologies are designed to address these 3 issues IRONICALLY, the fact that they do is also an obstacle to getting them published

Professors Feel Curricula is Overloaded  As a stand alone course systems thinking can not get into many curricula because of the Tragedy of the Commons.