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FEATURE _________________________________Integrating Systems Thinking and Design Thinkingby John Pourdehnad, Erica R. Wexler, and Dennis V. WilsonDesign thinking is a hot topic of discussion in management circles today. But how canorganizations increase their chances of creating the right designs? Systems thinking can helpdesigners better understand the world around them and avoid unintended consequences. Yet themost valuable principle that systems thinking can add to design thinking may bethe need to bring the whole system to the discussion from the beginning. MORE !

PEGASUS CLASSICSPredicting Behavior Using Systems Archetypesby Daniel H. KimThe better we understand the structure of a system, the better we can predict its future behavior.Systems archetypes can help us see the structures within a complex system, while behavior overtime diagrams offer a glimpse into the expected behavior of that structure over time. By identifyingand working on the underlying structures that produce behaviors, we can help tocreate the future instead of just trying to forecast it. MORE !

TOOLBOXIt’s Impossible Not to Make Connectionsby Michael MichalkoOur genius as humans is our ability to invent patterns and make new connections in ourimaginations. One example is that of blending concepts. For example, if you look at the phrase“They are digging their financial grave,” you know immediately what it means, even though thereis no connection between digging a grave and investing money. We can intentionallyapply this practice of blending to generate creative new approaches and ideas. MORE !

VIEWPOINTSystem Problem or People Problem?by Lee JenkinsLeaders of organizations must deal with people problems. However, they often attempt to solve asystem problem as if it were a people problem. When teachers spend a third of their time in reviewof prior grades, when data is used to rank and demoralize rather than to energize teams, andwhen students have their intrinsic motivation removed, system problemsare dominating. MORE !

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F E A T U R E

INTEGRATING SYSTEMS THINKINGANDDESIGN THINKINGBY JOHN POURDEHNAD, ERICA R.WEXLER,AND DENNISV.WILSON

As readers of this newsletter are aware, systemsthinking is evolving as an alternative to the old

paradigms. Richard Mattessich wrote that “systemsthinking is first and foremost a point of view and amethodology arising out of this viewpoint” (“Thesystems approach: Its variety of aspects,” Journal ofthe American Society for Information Science,33(6), 1982). It is a lens through which you canlook at the world. That lens determines what yousee and often influences what you do about it.

Systems thinking replaces reductionism (the be-lief that everything can be reduced to individualparts) with expansionism (the belief that a system isalways a sub-system of some larger system), andanalysis (gaining knowledge of the system by under-standing its parts) with synthesis (explaining its rolein the larger system of which it is a part). Accordingto Russell Ackoff, analysis is useful for revealinghow a system works, but synthesis reveals why a sys-tem works the way it does.

Many methodologies are derived from the sys-tems thinking worldview, including interactive plan-ning, soft systems thinking, and system dynamics.Regardless of the approach, the essence of systemsthinking is encapsulated in the concept of systemicwholeness, which is grasped by looking at thewhole instead of the parts. A system involves an in-terconnected complex of functionally related com-ponents. Failing to consider the systemic propertiesas derived from the interaction of the parts leads tosub-optimization of the performance of the whole.

With systems thinking, managers and designerslearn how the parts of their organization interact, nothow they perform independently. Otherwise, unin-tended consequences may emerge as changes made

within one part of thesystem may adversely af-fect other parts. Often,these new problems aremuch worse than thoseaddressed initially.Ackoff suggested that,for this reason, manyperformance-improve-ment initiatives fail and

actually throw fuel on the fires they seek toextinguish.

Design Thinking DefinedIn recent years, a great interest in “design thinking”has developed. But design in management is notsomething new. Design philosophy has its roots inEgyptian and Mesopotamian bureaucracies. EvenTaylorism was considered a new design philosophyin the early 20th century! Currently, many contrast-ing concepts of the design process and what makessomeone a designer exist. Additionally, many organ-izations are cited as examples of companies promot-ing a design thinking culture (for example, P&G).What does this mean?

In 1971, designer and educator Victor Papanekwrote: “All men are designers. All that we do, al-most all the time, is design, for design is basic to allhuman activity. The planning and patterning of anyact towards a desired, foreseeable end constitutesthe design process. Any attempt to separate design,to make it a thing-by-itself, works counter to the in-herent value of design as the primary underlyingmatrix of life. . . . Design is the conscious effort toimpose meaningful order.”

He further asserted that the general design func-tion must incorporate considerations of Methods(tools, processes); Use (does it work?); Need (realvs. evanescent requirements); Telesis (reflection ofthe times and conditions surrounding the project);Association (psychological connections with as-pects of the project); and Aesthetics (shaping colors,textures, etc. into pleasing forms). More than 30years later, professor of design studies Nigel Crosspointed out that designers have specific abilities to“produce novel unexpected solutions, tolerate un-certainty, work with incomplete information, applyimagination and forethought to practical problemsand use drawings and other modeling media asmeans of problem solving.”

The term “design thinking” now generallyrefers to applying a designer’s sensibility and meth-ods to problem solving, no matter what the problemis. IDEO’s Tim Brown explains that, from this per-spective, it is not a substitute for the art and craft of

TEAM TIPShift away from assuming that only“creative types” can contribute toinnovation to knowing that everyonein your group can do so.

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designing, but rather “a methodology for innovationand enablement.” Lately, some in the managementsciences think that a lot can be learned from the waydesigners think and “know” that could help us withinnovative solutions.

American philosopher Charles Sanders Peircemade the case that when new data exists, and thatdata doesn’t neatly fit into a currently understoodmodel, the first activity the mind performs is towonder. Wondering, as opposed to observing, is thekey to abductive reasoning, as opposed to deductiveor inductive reasoning. Abductive reasoning is theact of creatively thinking about what can be donewith the data in order to orient it to the current envi-ronment. Since the data is new, practitioners haveno method of reliably determining the appropriatemethod of dealing with it; therefore, they must relyon a “logical leap of the mind” to make sense of it.

In a recent interview, Roger Martin describeddesign thinkers as “willing to use all three kinds oflogic to understand their world.” He explained thatneither analytic nor intuitive thinking alone isenough to sustain competitive advantage since each,while providing tremendous strength, also createssystemic weakness if applied in isolation. He alsomade clear that the goal of abductive reasoning isnot to declare a conclusion to be true or false. In-stead, it is to posit what could possibly be true. It isthis mode of thinking that allows a designer to seekout new ways of doing things, challenge old ap-proaches, and infer what might be possible. It offersthe careful, balanced application of the reliable les-sons of the past and the logically valid leaps of whatmight be in the future.

Design thinkers bridge these two worlds andwork to make the abductive logic explicit so theycan share and refine it. Information systems and cog-nitive science professor Fred Collopy recently wrotein Fast Company: “If thinking is at the center of theactivity that we want to encourage, it is not the kindof thinking that doctors and lawyers, professors andbusiness people already do. It is not a feet up, dataspread across the desk to be absorbed kind of think-ing. It is a pencil in hand, scribbling on the boardsort of thinking.” While that depiction may be obvi-ous to those close to the design thinking process al-ready, it is not what folks conjure up when they firsthear the phrase. Our institutions provide little or noformal training in the creative design process.

The appeal of design thinking lies in its human-centered heuristics and growing track record of suc-cess. We can cite numerous examples, such as thoseproduced by IDEO, a California company that hasdesigned many successful products. As we readabout the application of design thinking in the busi-ness world, we find that it is most often applied toproduct-oriented problems despite its value to serv-ices, systems, and processes. While successful ap-

plications do exist in these areas, they are less com-monly highlighted. And while the strengths of tak-ing a design approach are seen in the successfuloutcomes, the term is so common that it risks be-coming yet another meaningless, fashionable con-cept without true business value.

The Role of Design in Systems ThinkingDesign in systems thinking is not the same as designin design thinking. Many divergent views exist ondesign within the systems process; however, there isagreement on a number of underlying principles thatsystems thinkers follow when planning toward a de-sired future. While a full explanation of these prin-ciples goes beyond the scope of this article, systemsthinkers generally aim to do something today to im-prove the system tomorrow.

In systems thinking, design is a creative act thatattempts to estimate how alternative sets of behaviorpatterns would serve specified goals. In the systemscommunity, design has become the preferred ap-proach to problem solving and planning for a vari-ety of reasons: the belief in the synthetic mode ofthought, the idea that the future is subject to cre-ation (design being the creative process), the con-cept that you need to dissolve problems (and notsolve them) through redesign of the system, etc.

To understand the role of design in systemsthinking, let’s look at Ackoff’s view on planning.Ackoff describes four orientations to planning:Reactivism, Inactivism, Preactivism, and Interac-tivism. Reactivist planners embrace the past. Inac-tivist planners are generally satisfied with the waythings are in the present and want to avoid makingmistakes within the current system; they seek toavoid errors of commission. Preactivist planners areunsatisfied with the past as well as the current envi-ronment and seek change. They attempt to under-stand all aspects of the future that may affect thesuccess of their intervention; they want to avoid er-rors of omission. Finally, interactive planners be-lieve the future is subject to creation. They think thebest means of revealing a desirable future is by en-abling the stakeholders to do it themselves.

Not surprisingly, Ackoffian systems thinkersembrace the interactive planning perspective. Theybelieve our failures are often due to misguided as-sumptions made when planning for how our futureought to be. They think knowledge of the past doesnot enable us to solve complex problems, and theyseek to avoid both errors of commission and omis-sion. We can say that interactive design is the exe-cution of design thinking with a systems worldview.

On Designing, With and Without theSystems WorldviewKenneth C. Bausch said that: “To accomplish itsgoals, system design cannot be a top-down operation

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nor can it be expert driven. It must actively involvethe stakeholders of the design in shaping a shared vi-sion that represents their ideas, aspirations, valuesand ideals.” Taking this view, someone who plans,redesigns, manages, and organizes social systemsmust embrace a systems worldview. And given thisreality, it is the role of the stakeholders in the designprocess that separates the systems thinkers’ approachto design from that of the design thinker.

We believe we have identified the core differ-ences in the systems thinking and design thinkingapproaches to problem resolution:

• Design thinking methodologies arose from theconsideration of products and artifacts. The prob-lems are ultimately resolved by people identified asdesigners by trade. The design team observesand studies the stakeholders.

• Systems thinking methodologies arose from theconsideration of social systems. The stakeholdersare the designers.

The good news is that design thinkers are mov-ing away from the “First Generation of Design,”where the act of designing is the prerogative of a cer-tain talented group called “designers.” The First Gen-eration Design methods rely heavily on the idea thatprofessionals hold knowledge that is critical to thedesign and inaccessible to the user. Professionals cre-ate a design and are under no obligation to go further.This approach is the one typically taken in the past inthe design of operating systems. The designer devel-oped an operating system design on paper, and sup-plied all the documentation and blueprints to acontractor, who converted the paper design to a phys-ical system. The designer figuratively threw the de-sign over the “wall” that separated the professionaldesign organization from the contractor or user.

Designers today more often operate from the“Second Generation of Design.” They recognize theneed for collaboration among designers and externalperspectives to guide them. For example, IDEO’sDeep Dive methodology made it standard practicefor designers to gain input from many differentstakeholders, including the end user. The designteam observes and interacts within the larger systembefore going back to the design table to piece thedata together and design a solution. Such ethno-graphic and anthropological studies have addedtremendous value to the solutions that are gener-ated. This is where design thinking today seems toincorporate some aspects of systems thinking.

This approach still has its risks, however. Eventhough there are many perspectives involved inparts of the design process, the stakeholders giveinput solely from their individual experiences andnever see how it fits into the whole system. The de-signers’ role is still to piece it all together. They

need to get into the heads of the stakeholders and at-tempt to interpret what they think. Because neitherthe organization nor the end user has been involvedin the entirety of the design process, the designersneed to elicit their buy-in. They also risk missing akey stakeholder group. We caution that unintendedconsequences often occur when interdependentpieces of the larger system have not been con-sciously considered in the context of the whole sys-tem. It is in the use of what Tim Brown describes asthe “designer’s sensibility…to meet people’s needs”where this form of design thinking strays from thesystems thinking worldview.

In a recent blog post, designer Kevin McCul-lagh said, ”Let’s forget about design thinking as amagic process, and focus on how designers andmanagers should best work together to deliver greatquality outputs.” The systems thinking worldviewoffers a method of doing just that. We propose thatby taking this approach, design thinkers can moveinto a “Third Generation of Design,” which buildsin a purposeful consideration of systems thinkingprinciples. It addresses many of the challenges oftrying to get into the heads of others. A successfuldesign is therefore not one that is imposed on orprovided to the organization from a source externalto the system. The best way to ensure that the de-sign will serve the organization’s purpose is to in-clude the stakeholders in its formulation. Hence, thesuccess of a design is directly related to the level ofstakeholder participation in its development.

In the “Third Generation of Design,” the stake-holders are the designers. They are not externalsources of input. Instead, they are the concept gen-erators and implementers. An underlying principleof interactive planning is that people must be al-lowed to plan for themselves. The process involvesthe interaction of groups of individuals with diversevalues. The design facilitator creates an environ-ment where these differing views are honoredwithin the context of the larger system. Creating ashared vision of the future can also be described asfinding “common ground,” a place where partici-pants are able to get past the current situation andmake decisions based on what is good for the sys-tem. In fact, designing creative solutions becomesmuch more straightforward if the practitioner is ableto address the conflicts that arise due to differingstakeholder values, beliefs, and worldviews.

By empowering all stakeholders from the be-ginning, it is possible to tap the creative energy ofevery participant so that innovative ideas emergefrom the collective of the differing perspectives.One thing that design practitioners using a systemsapproach bring to the table is the ability to help anorganization take ownership of the ideas thatemerge through the design process. This is a criticalconsideration for today’s designers. It is much more

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likely that the ideas generated will be implementedand maintained if the stakeholders involved are theones who came up with the solutions in the firstplace. When people within an organization have hadinput throughout a change process and believe theyhave influenced its direction, the resistance to newideas dissipates.

Designers must help participants uncover theirunderlying assumptions about the problem theythink needs to be solved. Often, cultural assump-tions and traditions contribute to the dilemma. Cul-tural assumptions include those specific toleadership, both formal and informal, which canhave an effect on how people approach the assumedproblem. Designers applying systems thinking prin-ciples can support participants in recognizing the as-sumptions they and the organization hold. In thisway, they can provide them with the means to de-velop a new framework and shared worldview.

An Integrated Approach to ProblemResolutionIn 2009, leaders at the Johns Hopkins Hospital antici-pated its 2011 relocation to new multi-billion dollarquarters. Hospital administrators could have enlisted“design thinking” folks to look at the needs of the dif-ferent units, gather ethnographic data, and then layout a plan with recommendations for the relocation.Instead, the Johns Hopkins team took a different tack.Members looked at the move as an opportunity to re-design their current situation into a more desired fu-ture. The hospital would upgrade its system as itupgraded its physical environment. Their changewould be systemic and not purely geographic.

Championed by a number of VPs, the hospitalformed design teams comprised of the hospital’sstakeholders. They defined stakeholders to meananyone who could either impact or be impacted bythe decisions made in the design teams, includingnot only administration and management, but repre-sentatives from all of the hospital’s units, such asdoctors, nurses, technicians, customer services rep-resentatives, and custodial staff. Most important, thedesign teams included the end users: the patients.

Before starting, the teams attended a short courseon systems thinking. The orientation created a sharedunderstanding of how the hospital operated as a sys-tem. Facilitators also shared information and datafrom research that had been done across differenthospitals with the goal of finding out how patientsthought about and described the care they received.The trends showed that patients valued more in a hos-pital stay than the level of care they received. In someinstances, patients who had successful procedureswith high-quality medical care stated they wouldnever return to that hospital again. Some of the rea-sons provided included poor treatment by diagnosti-cians; multiple room switches; unsanitary bathroomconditions; and long waits for transportation for tests.

The patients’ evaluation had nothing to do with thequality of the medical care provided by the doctorsand everything to do with how they perceived theirexperience with the hospital as a whole.

These early steps in the design process gavepeople who had never communicated before a com-mon language and point of reflection. They also re-moved the risk of blame and finger pointing byredirecting the focus to patterns that were happeningin the larger environment of hospital care in general.Even though people came to the table with differentexperiences and frameworks, they shared an under-standing that any design created and implementedhad to meet two systems thinking criteria:

• Identify and consider the essential parts of thesystem

• Decide the design based on the amount ofimprovement to the system as a whole, not just toindividual parts or units

Once these criteria had been determined, thegroup considered the next question:

If John Hopkins is a system, what does the hos-pital do to support the patient experience versussimply considering patient care?

As doctors, janitors, technicians, and other hos-pital staff interacted with patients, the interdepend-ence of their contribution to the hospital as a wholebegan to emerge. This analysis led to what can onlybe described as an “A-HA!” moment. The partici-pants realized that two essential components of thehospital were traditionally overlooked, yet had agreat impact on the patient experience: PatientTransportation (responsible for moving patientsfrom one part of the hospital to another) and Envi-ronmental Services (responsible for cleaningthroughout the hospital). This realization had signif-icant implications for the new design. The additionalawareness that these functions directly affected boththe hospital experience and the bottom line pro-duced exciting designs. But most important, all ofthese considerations resulted in a new approach torecruitment, training, and compensation for employ-ees within these key departments.

Within Patient Transportation, an innovativeand effective design resulted from measuring howlong it took to move patients between various loca-tions in the hospital in a pleasant and timely manner.Additionally, this consideration helped the designteam determine a logistically optimum location toplace the wheelchairs in the new buildings. The in-creased ability of Patient Transportation to move pa-tients quickly improved other departments’performance; for example, diagnostics will nolonger stay idle waiting for patients to arrive.Furthermore, the design team was able to improvethe internal communication system, eliminating the

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additional work and time lost when nurses tried tocontact patient transporters.

In the Environmental Services team, one solu-tion improves the bed turnaround time, which alsomeans that patients won’t be left waiting in the hallfor a room at the new facility. The design team alsobecame aware that the Environmental Services unitdoes more than simply change over the rooms; italso affects the overall quality of care in the hospi-tal, specifically as it relates to infectious diseases.This was an epiphany for everyone.

The Johns Hopkins example shows the instru-mental role that taking a systemic worldview canplay in design. It also highlights how important de-sign is to any consideration of the system. By start-ing with an overview of systems thinking principles,everyone was operating from a shared mindset. Byhearing trends collected from the larger healthcareenvironment within which they operated, the JohnsHopkins team was able to develop a shared under-standing of the current situation.

Moreover, by bringing everyone to the designmeetings, the facilitators ensured that stakeholderswho rarely had a voice were heard. For the first time,a level power dynamic existed, which was a monu-mental shift from the traditional hierarchy with sur-geons and doctors at the top of the ladder. JohnsHopkins achieved its goal of a system redesign withthe ownership of those most impacted by it.

If Johns Hopkins’ administrators had simplybrought in designers to look at the problem, interviewvarious stakeholders, and design recommendationsbased on the compiled feedback, they would not haveachieved such a rich redesign. It was only by havingeveryone in the same room, under the same sharedcontext of hospital trends in the larger environment,using the same systems language throughout the en-tire process that the resulting design had the inputand ownership of the entire system.

ConclusionIn today’s business world, design thinking and sys-tems thinking are considered separate things. Thechallenge remains how the design thinking commu-nity can learn from the systems thinking communityand vice versa. We believe that practitioners shouldintentionally integrate systems thinking with designthinking to enhance the chances of creating the rightdesigns! We have shown that systems thinking canhelp designers better understand the world aroundthem. Furthermore, designers can achieve more sus-tainable designs by following systems principles.Design can be greatly enhanced if it improves theperformance of the system as a whole, even if youare redesigning the part. Being aware of the princi-pal of unintended consequences can also enhancedesign thinking.

Yet the most valuable principle that systemsthinking can add to design thinking is the need to

bring the whole system to the discussion from thebeginning. The stakeholders within the system mustplan for themselves. If problem formulation is thefirst step in the design process, then adopting a sys-tems mindset can help with framing and especiallyreframing the problems.

We have proposed that the two approachescomplement each other and each incorporates com-ponents of the other implicitly. We believe it is pos-sible—and necessary—to create an approach thatexplicitly incorporates the strengths of both, therebyaddressing the gaps and increasing the chance ofcreating sustainable solutions to the wicked prob-lems facing organizations and society today.

John Pourdehnad serves as affiliated faculty inOrganizational Dynamics at the University ofPennsylvania. He is also associate director, AckoffCollaboratory for Advancement of Systems Ap-proaches, and adjunct professor, Systems Engineering,in the School of Engineering and Applied Science.

Erica R. Wexler holds a master’s in OrganizationalDynamics from the University of Pennsylvania. She iscurrently communication & training coordinator of thePennsylvania Bureau of Autism Services.

Dennis V. Wilson holds a master’s in OrganizationalDynamics from the University of Pennsylvania. He iscurrently project manager/senior process analyst atPenn Mutual Life.

•

Originallypresented at theInternationalSociety for theSystems Sciences(ISSS) 55th AnnualConference, “AllTogether Now:Working AcrossDisciplines,” atUniversity of Hull,Hull, UK, July 17-22, 2011.Condensed withpermission.

In a presentation at the 2011 Systems Thinking inAction Conference, IDEO’s Peter Coughlan andSeattle University professor Colleen Ponto pro-posed a process that integrates systems thinkingand design thinking:

Define the Challenge:1. Tell the story.2. Sketch trends.3. Name variables.4. Set system boundaries.

Ground Understanding:5. Share personal experiences.6. Explore analogous situations.7. Identify themes.

Identify Places to Intervene:8. Make the system visible.9. Determine leverage points.

Move Insights to Action:10. Brainstorm many solutions.11. Prototype promising solutions.12. Experiment to test solutions.

Copyright 2011 Coughlan and Ponto

NEXT STEPS

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P E G A S U S C L A S S I C S

PREDICTING BEHAVIOR USINGSYSTEMSARCHETYPESBY DANIEL H. KIM

The adage “a bird in the hand is worth two in thebush” captures an old belief that something

“known” is more valuable than something less cer-tain. Taking that one step further, we might say thatpresent circumstances are somehow more “real” thanfuture possibilities. But such statements confuse un-certainty with ignorance of the structures that pro-duce future outcomes, leading us to assume thateverything in the future is inherently uncertain.

Another deep-rooted assumption is that pastbehavior is a good predictor offuture behavior—hence ournever-ending attempts to fore-cast, anticipate, and otherwiseguess at future outcomes bylooking at historical data. With-out a deeper understanding ofthe underlying structures thatproduce the observed behaviors,forecasts fail when we need themthe most—when the future deviates from the past.

Inaccurate forecasts stem from two causes:either we do not understand the mechanisms govern-ing the actions we are trying to predict, or the situa-tions themselves are inherently unpredictable. In thelatter case, there isn’t much we can do other thantake our best shot with whatever methods seem toproduce the best results. But before we throw up our

hands in despair, we should be careful to differenti-ate between true uncertainty and predetermined ele-ments—those things we can predict if we have anadequate understanding of the underlying structure.

Scenario PlanningPlanners at Royal Dutch Shell recognized the impor-tance of distinguishing between true uncertainty andpredetermined elements as part of the scenario plan-ning process. They defined a predetermined element

as an event that has already oc-curred—or most certainly willoccur—but the consequences ofwhich have not yet materialized.For example, if there is an autoaccident on a major highway atrush hour, we can predict thattraffic jams within the city andripple effects on secondary roadswill be the predetermined out-

comes of that event. The structure of the system—number of lanes, alternative routes, speed limits,rush hour traffic volume, population density—makes the outcome very predictable. Identifyingsuch predetermined elements is fundamental to theplanning process, because it allows us to predict fu-ture outcomes based on the structure of the currentsituation.

Structure-Behavior LinkThe better we understand the structure of asystem, the better we can predict the futurebehavior of that system. This is one of themost important principles of systems think-ing—structure, to a large extent, determinesbehavior. Although there may be uncertaintyabout the exact timing and duration of theoutcome, the nature and eventuality of it isclear. Knowing this, we can greatly improveour ability to influence the behavior of asystem.

Together, systems archetypes and Behav-ior Over Time diagrams (BOTs) can help usidentify predetermined outcomes of a partic-ular situation. Systems archetypes can help

This article wasoriginally publishedin The SystemsThinker® V5N8,October 1994.

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A reinforcing dynamic of new products increasing revenue, which is then invested in addi-tional new products (R1), will initially produce a growth curve.

The better we understandthe structure of a system, thebetter we can predict thefuture behavior of thatsystem.

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us see the structures within a complex system, whileBehavior Over Time diagrams offer a glimpse intothe expected behavior of that structure over time.

Identifying PredeterminedElementsFor example, in many companies, new product de-velopment is the main engine of growth (see “Rein-forcing Growth with New Products”). As newproducts are released, customer orders and revenuesincrease, which provides more funds to pump backinto new product development (R1). In this situation,our sales data would show that we are on a healthygrowth curve, and most forecasts would predict moreof the same. If we look at the situation from a “Lim-its to Success” perspective, however, we can go be-yond straight line projections by betterunderstanding the structural forces at play. In reality,

there are many different pos-sible outcomes that can neverbe predicted by historical dataalone (see “Multiple Fu-tures”). Revenues could growat a slower rate (F2), plateau(F3), or collapse (F4). Giventhese possibilities, what kindof prediction can we make forfuture outcomes? The answeris determined not by lookingat past data, but by looking atthe underlying structure.

When we understand thestructural landscape, we canbetter distinguish between un-certainty and predeterminedelements. In a “Limits to Suc-cess” structure, we would

look for balancing loops that the growth in revenuesmight trigger (see “Identifying Predetermined Conse-quences of Limits”).

For example as customer orders grow, the orga-nizational infrastructures needed to service themalso grows. As more people are hired, the organiza-tional complexity increases and places an additionalmanagerial burden on those responsible for develop-ing products. If the company’s way of managing itsproduct development effort does not change withthe changing needs (which is often the case in afast-growth environment), a decline in new productsis a predetermined consequence of the “Limits toSuccess” structure. The more the company tries topush harder on the growing action, the stronger theslowing action will become, as long as the structureof the management capacity limit remains un-changed.

From Historical Behavior to ArchetypeBehavioral charts can also provide a starting pointfor selecting an appropriate archetype to use, sinceeach archetype is associated with a particular domi-nant behavior mode that is characteristic of its struc-ture. For example, imagine you are a marketingmanager in charge of a new product launch. Youhave been running a series of campaigns over thepast year, and sales have grown steadily. Last quar-ter, however, you noticed that the growth in saleswas beginning to decline. This quarter you increasedyour marketing efforts, but it seemed to have littleimpact.

The historical pattern of behavior can offerclues that help identify possible archetypal struc-tures, which then allows us to predict future behav-ior given the system structure. It is an iterativeprocess. For example, the historical data of salesgrowing and then plateauing suggests a “Limits toSuccess” archetype may be at work. Having identi-fied a “Limits to Success” structure, we can useBOT diagrams to flesh out the particular limits af-fecting our sales growth. How does the volume ofcampaigns seem to affect sales over time? Are therepressures building in the organization as a result ofthe growth? What does the production capacity looklike over time? Is the size of the market growing orstagnating? Charting these factors over time canoffer insight into the particular balancing processesthat need to be addressed in order to eliminate po-tential limits to growth before they affect futuresales.

Or suppose you are a new plant manager of aprocessed food company and you notice that a once-popular product has been declining steadily in sales.When you ask other employees for their picture ofthe situation, they tell you that consumer tastes havechanged and the product does not have as much ap-peal as it used to. The declining sales coupled with adeclining level of investment into the product itself,

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IDENTIFYING PREDETERMINED CONSEQUENCES OF LIMITS

There are many possible outcomes for rev-enues, given our current reinforcing structureof increasing product offerings: forecastedgrowth (F1), continued growth at a slower rate(F2), plateau (F3), or decline (F4).

The “Limits to Success” structure suggests that there are potential balancingprocesses that could limit future growth. For example, as the organizational infra-structure grows to service the increasing orders, product developers might haveless time to devote to creating new products (B2). The result may be a decline inproducts and a consequent decline in orders (R1)

THE SYSTEMS THINKER ® Volume 22, Number 9 November 2011 © 2011 PEGASUS COMMUNICATIONS, INC.9

however, makes you wonder if something else isgoing on. This behavior over time suggests that a“Drifting Goals” archetype may be at work.

Creating (Not Forecasting) Your FutureThis link between structure and behavior is criticalin our systems thinking worldview. Linking each ar-chetype with a specific set of behavior patterns canhelp us see into the future with a different set ofeyes. We can then see more clearly the difference be-tween true uncertainty and predetermined events that

have yet to unfold. By identifying and working onthe underlying structures that produce the behaviors,we can better predict the future by helping to createit instead of just trying to forecast it.

Daniel H. Kim is co-founder of Pegasus Communica-tions, founding publisher of The Systems Thinkernewsletter, and a consultant, facilitator, teacher, andpublic speaker committed to helping problem-solvingorganizations transform into learning organizations.

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T O O L B O X

IT IS IMPOSSIBLE NOT TOMAKE CONNECTIONSBY MICHAEL MICHALKO

The human brain cannot deliberately concentrateon two separate objects or ideas, no matter how

dissimilar, no matter how remote, without eventuallyforming a connection between them. According tohis own story, Isaac Newton conceived of universalgravitation when he observed an apple falling and, atthe same time, noticed the moon in the sky. Theserandom simultaneous images inspired him to specu-late on whether the same laws governed the fallingapple and the moon orbiting the earth. This in turnled him to develop the laws of mechanics and estab-lish mathematical analysis and modeling as the prin-cipal foundations of science and engineering.

Newton’s conceptual combination created newscience. The same process can help you to get theideas you need in the business world. James Lavoieand Joseph Marino, cofounders of Rite-Solutions, didjust that when they needed an employee-suggestionsystem that could harvest ideas from everyone in thecompany, including engineers, accountants, salespeo-

ple, marketingpeople, and all ad-ministrative staff.

They wanteda process thatwould get theiremployees to cre-atively invest in

the company. The word “invest” encouraged them tofind ways to invest. One association was the NewYork Stock Exchange.

Rite-Solutions combined the architecture of thestock exchange with the architecture of an in-housecompany stock market and created a stock exchangefor ideas. The company’s internal exchange is calledMutual Fun. In this private exchange, any employeecan offer a proposal to create a new product or spin-off, to solve a problem, to acquire new technologiesor companies, and so on. These proposals becomestocks and are given ticker symbols identifying theproposals.

As reported in the New York Times, “Fifty-fivestocks are listed on the company’s internal stock ex-change. Each stock comes with a detailed descrip-tion—called an expect-us, as opposed to aprospectus—and begins trading at a price of $10.Every employee gets $10,000 in ‘opinion money’ toallocate among the offerings, and employees signaltheir enthusiasm by investing in a stock or volun-teering to work on the project.”

The result has been a resounding success.Among the company’s core technologies are pat-tern-recognition algorithms used in military applica-tions, as well as for electronic gambling systems atcasinos. An administrative employee with no techni-cal expertise was fascinated with one of the com-

TEAM TIPThe next time your team faces a challenge,use pictures as random stimuli to promptcreative thinking.

THE SYSTEMS THINKER ® Volume 22, Number 9 November 2011 © 2011 PEGASUS COMMUNICATIONS, INC.1 0

pany’s existing technologies and spent time thinkingabout other ways it could be used. One pathway sheexplored was education. She proposed that thistechnology could be used in schools to create an en-tertaining way for students to learn history or math.She started a stock called Win/Play/Learn (symbol:WPL), which attracted a lot of attention from thecompany’s engineers. They enthusiastically boughther stock and volunteered to work on the idea toturn it into a viable new prod-uct, which they did. A brilliantidea from an unlikely sourcewas made possible by the newemployee-suggestion system.Just as Isaac Newton got his in-sight by combining images of afalling apple and the moon, thiscorporation created an innova-tive employee-suggestion sys-tem by blending the concepts of the New YorkStock Exchange and employee suggestions.

This Is a Natural Way of ThinkingBlending concepts is a way of thinking and imagin-ing so natural that we don’t even notice how fantasticthis ability is. A good example is the ordinarymetaphor. If you look at a phrase such as “They aredigging their financial grave,” you know immediatelywhat is meant. Yet there is no connection whatsoeverbetween digging a grave and investing money. Thereis no logical way to connect graves and money. Howis it possible to know what this means?

Your mind takes one input, “grave digging,”and another input, “financial investment,” and con-ceptually blends them together. But the meaningisn’t contained in either input; the meaning is con-structed in the blend. Through conscious and sub-conscious elaboration, the blend develops astructure not provided by the inputs to create anemergent new meaning.

How can you connect a coconut, a sensor, andairplane noise? An activist-researcher whose workfocuses on the intersections between art, activism,and technology became annoyed at the noise madeby aircraft flying over the city he lived in. He con-structed a site-specific art installation, Tripwire,which responded to the relationship between theairport and downtown. He placed sensors inside co-conuts and hung them from trees in several down-town locations to monitor aircraft noise. Detection ofexcessive aircraft noise causes the sensors to triggerautomated telephone calls to the airport’s complaintline on behalf of the city’s residents and wildlife.

Use Pictures and Illustrations As RandomStimuliPictures, photographs, and illustrations are excellentsources of unrelated stimuli. Select two or three in-

teresting pictures at random that have nothing to dowith your problem. Describe one of the pictures indetail. List descriptors—everything that comes tomind: imagery, feelings, words, phrases, and so on.If you think of absurd material, list that too. Thenforce yourself to conceptually blend the descriptorswith your challenge.

This is what a sales manager for a pharmaceuti-cal company did. She filled one whole office wall

with interesting pictures oflandscapes, products, people,animals, and symbols. Everytime she found something inter-esting, she tacked it on thewall. One day, she wanted anidea to differentiate her busi-ness cards from the competi-tion.

She looked at the pictureson the wall. One was a picture of a rural roadthrough a field of sunflowers, and the other was asunset over a field of flowers. She wrote every de-scriptor that came to mind for roads, sunsets, andflowers. One of her descriptors for the field of flow-ers was “seed.” The idea of a “seed” intrigued her,as she thought of a business card as a seed for futurebusiness.

Over the next few hours, she simultaneouslythought about a seed and business cards, and thenconceptually blended the two into an ingeniousidea. She had the company’s business cards embed-ded with flower seeds. Once customers read thecards, they can place them in a glass of water or inthe ground, and within a few days they will start togrow. Now the card becomes a flower that con-stantly reminds the customer of the company. Thisis the kind of idea you cannot get using the preju-dices of logical thinking.

We all have the gift to make associations likethese. Psychologists have found that if you put peo-ple in a room with a contraption containing lightbulbs wired to blink on and off at random, they willquickly discern what they believe are patterns andwill develop theories for predicting which bulb willbe next to blink. Our genius as humans is our abilityto create elaborate architectures in our imaginationsto invent patterns and make new connections.

Michael Michalko is the author of Creative Thinkering,Thinkertoys, Cracking Creativity, and ThinkPak.While an army officer, he organized a team of NATOintelligence specialists and international academicsto find the best inventive thinking method. He hasexpanded and taught these techniques to numerousFortune 500 companies and organizations. He lives inRochester, New York. Visit him online athttp://www.CreativeThinking.net.

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Blending concepts is a wayof thinking and imaginingso natural that we don’t evennotice how fantastic thisability is.

Excerpted fromthe book CreativeThinkering:Putting YourImagination toWork ©2011 byMichael Michalko.Printed withpermission ofNew WorldLibrary,Novato, CA.www.newworldlibrary.com

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Most followers of systems thinking literature areprobably aware of W. Edwards Deming’s esti-

mate that 94 to 97 percent of our problems stem fromthe system, with the remaining problems caused byhuman error or poor judgment. Sometimes whenleaders of an organization hear this percentage, theymisunderstand. They assume the problems are eitherin the legislative or the societal systems. They furtherrationalize that since they have little effect on eithersociety or legislation, they can do nothing to reallyimprove the situation.

This is the attitude of a victim and couldn’t befurther from Deming’s teachings. Leaders are re-sponsible for working on their system. Yes, there aresystemic problems with society and legislation—forinstance, problems with a huge impact upon publiceducation. However, education owns its own set ofproblems that cannot be solved by either society orlegislation. Only leaders can fix the education prob-lems that education owns.

Rating ScaleCecilia McCain, writing in the September 2006 issueof Quality Progressmagazine, provided an “Occur-rence Rating Table” that can be of significant help indetermining whether something is a system problemor a people problem and which system problems toaddress first. McCain’s scale ranges from 1 to 10,with 1 meaning the problem has a chance of occur-ring once in 30,000 attempts and 10 meaning theproblem has a 1 in 3 chance of recurring.

For example, you could use this scale to examinethe use of illegal drugs by school bus drivers. Sup-pose the district has 25 bus drivers driving 180 days ayear and another five drivers who work 240 days ayear for a total of 5,700 bus days per school year. Ifon average one bus driver tests positive for illegaldrugs every six years, this is a level 1 problem. Itdoes not mean that random drug testing should halt,but when the one incident does occur, this issue as awhole should not rise to the top of the superinten-dent’s priority list.

On the other hand, when an administrator stopsby a classroom, there is a 1 in 3 chance the teacherwill be reteaching something students should havelearned in a prior grade. This is not a people problem;it is a system problem that is owned by education.

Case ApplicationsThree other examples demonstrate how McCain’srating scale can assist leaders in separating peopleproblems from system problems. In each instance, Irate the severity of the problem based on question-naires provided to me by seminar participants.

System Problem No. 1: Beginning with first-gradespelling, students soon learn they have permission toforget almost everything that is taught. On average,teachers tell me they spend a third of the year teach-ing content students should know prior to enteringtheir classroom. The students “learned the content,”wrote it down for an exam or quiz, and promptly dida brain dump. (Rating: 10)

System Problem No. 2: Data typically is used to rankstudents, classes, grade levels/departments, or schools,not to inform them whether they are improving. Ex-amples of ranking include stickers on walls, forcedbell curves, and other student-to-student comparisons.Students rarely see data constructed so that a class-room is considered a team working together to have asmany as possible meet standards, for example, Howmany words can our classroom read in a minute? Howmany ions can the chemistry class identify?At least 1of 5 teachers and 1 of 5 schools use data in ways thatdiscourage rather than encourage students. (Rating: 9)

System Problem No. 3: Students are losing their en-thusiasm for school at an alarming rate. This problemneeds a new level of scoring—an 11. There is a 2 outof 3 chance a student by the end of grade 8 will havelost his or her enthusiasm for school.

Teachers do not wake up in the morning and ask,“Who can I discourage today?” It is a system prob-lem. In their respective books, Continuous Improve-ment in the History/Social Science Classroom andContinuous Improvement in the Science Classroom,Shelly Carson and Jeff Burgard describe how to stopthis loss of enthusiasm. Their advice was an impor-tant aspect of the Palatine, IL, school district earningthe Malcolm Baldrige National Quality Award in2003.

Of course leaders of organizations must deal withpeople problems. However, they often attempt tosolve a system problem as if it were a people problem.

V I E W P O I N T

SYSTEM PROBLEM OR PEOPLE PROBLEM?BY LEE JENKINS

(Continued on page 12)

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Pegasus On-Demand!The five keynote speakers at this year’s Systems Thinkingin Action Conference—Charlotte Roberts, Katie Salen,David Sibbet, Tom Crum, and Peter Senge—received ravereviews. Now you can see them on your own computer throughour new Pegasus On-Demand Library.

Pegasus On-Demand provides you with 24/7 access to:

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For a limited time, view a free webinar by David Sibbet so you can experience the benefits ofonline access to the ideas and tools you need to improve your team’s performance right now.You can also preview the entire Pegasus On-Demand Library!

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P E G A S U S N O T E S

EDITOR: Janice Molloy(janicem@pegasuscom.com)FOUNDING PUBLISHER: Daniel H. KimPRODUCTION: Nancy DaughertyCIRCULATION: Eric Kraus(erick@pegasuscom.com)

THE SYSTEMS THINKER® explores both the the-ory and practice of systems thinking and relatedorganizational development disciplines. Articlesby leading thinkers and practitioners articulate thechallenges and issues involved in creating organi-zations on the leading edge of innovation. We en-courage dialogue about systemic issues andstrive to provide a forum for debating such issues.Unsolicited articles, stories, and letters to the edi-tor are welcome.THE SYSTEMS THINKER® (ISSN 1050-2726) ispublished 10 times a year by Pegasus Communi-cations, Inc. Signed articles represent the opin-ions of the authors and not necessarily those ofthe editors. The list price is $189.00 for one year.Site licenses, volume discounts, and back issuesare also available.Copyright © 2011 Pegasus Communications, Inc.All rights reserved. No part of this news-letter may be reproduced or transmitted in anyform or by any means, electronic or mechanical,including photocopying and recording, or by anyinformation storage or retrieval system, withoutwritten permission from PegasusCommunications.

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(Continued from page 11)

When teachers spend a third oftheir time in review of priorgrades, when data is used torank and demoralize rather thanto energize teams, and when stu-dents have their intrinsic moti-vation removed, systemproblems are dominating.

Lee Jenkins is the director of theFrom LtoJ Consulting Group(Lee@LtoJConsulting.com). He isthe co-author of Boot Camp forLeaders in K-12 Education:Continuous Improvement. This isa condensed version of an articleby the same title that appeared inThe School Administrator, Febru-ary 2007, Number 2, Vol. 64.

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a beginner to engage andtrack all the way through,

as well as keep otherscoming back for their

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