Systems thinking is a way of thinking about the world that is based in General Systems Theory.

A system is some "entity" that is made up of a set of interlinked internal processes, surrounded by some type of boundary. It is defined by circular cause and effect relationships rather than linear cause and effect chains. In other words, the internal processes have mutual influence on each other.

Each system is generally open to the outside world, in some way or another, and is influenced by other systems to which it is connected in various ways.

In most cases systems are made up of sub-systems and are, themselves, part of larger systems. In other words, systems thinking understands the world as being a series of nested systems. A person’s body is a system. The heart is a system. A cell is a system. A company is a system. A forest is a system. The weather is a system. The planet earth is a system.

Systems thinking provides us with a language which can be used to understand the dynamics of complex situations. It allows us to break a complex situation into simpler components, or sub-systems, and describe what is going on by reference to a finite set of simple processes.

The basic building blocks, or simple processes, that make up a system are essentially stocks, flows, information feedback loops, and delays. With these simple processes, it is possible to build models of dynamic systems that demonstrate the same complex behaviour as the system itself.

These models can be run as computer simulations, which can themselves be used to predict the consequences of different decisions.

Systems thinking is a growing body of thinking, tools, and information. There are many useful sites with information on systems thinking, and a growing number of useful books. An excellent book that deals with how systems thinking can be applied to business is The Fifth Disciple, by Peter Senge.

We work with companies to build system models of their business system, and use this knowledge to identify high leverage interventions.