Definition

Systems Thinking is an approach to strategic decison making and also an operational process
improvement methodology, capable to conceptualize and to medl system behaviour-both
qualitatively and quantitatively.

Systems Thinking is a rigorous method for exploring and analysing complex systems,
- in terms of PROCESSES, INFORMATION FLOWS, DELAYS, ORGANIZATIONAL
BOUNDARIES and STRATEGIES;

- using system maps and simulation models;

- to generate understanding and learning;

- about problems and opportunities for performance improvement.
 

Properties of Complex Systems

Intuitive solutions to problems in complex systems will be wrong most of the time.

Complex systems often behave over the long term in an opposite way to short term behaviour.

Complex systems counteract and compensate for externally applied actions and are insensitive
to changes in many system parameters.

BUT...

Complex systems contain pressure points, often in unexpected places, where changes can be
applied to alter system behaviour.
 

Open-Loop View of the World

Open-Loop thinking is prevalent in most organizations. Many business tools in common use
(eg.spreadsheets) encourage an open-loop view of the world which ignores the interdependencies
in systems and processes which actually determine performance.
 

Closed-Loop View of the World

Feedback loops are of only two types:

- Positive Loops, which generate or reinforce growth or change.

- Negative Loops, which counteract or balance growth or change.
 

Positive or Reinforcing Loops

Positive Loops generate change or growth in systems. This example is a simple "virtous circle",
where an action generates an outcome which reinforces the original action.

Positive Loops can also result in a downward spiral or performance. In this case the positive loop
is confirmed by the existence of two -an even number- of opposite (o) links within the loop.
 

Negative or Balancing Loops

A Negative Loop acts to negate change, ie.to close a gap between a variable and a target. As such,
balancing or negative loops are target seeking mechanisms which seek to restore equilibrium or
balance in a system. Note that negative loops always have an odd number of opposite (o)
connections around the loop.
 

Multiple Loops Cause More Complex Behaviour

All organizations contain multiple feedback  loops. At various times, positive or negative loops.
At various times, positive or negative loops predominate, causing growth, stability, decline or
oscillation of specific performance measures. Note that reinforcing and balancing loops interact-
in most cases these loops cannot in practice exist without each other. Well intentioned policies
often cause unintended consequences.
 

Population Dynamics

The death and birth fractions do not remain constant as the population changes. For example,
as population increases food may be harder to find and the death fraction may increase. In this
example, food availability allows poplation to grow quickly to a level which cannot be sustained
by new food production.

The positive and negative loops are predominant at different times.

Reference: Alfredo Moscardini, University of Sunderland (UK), Lecture Notes