Systems thinking - a new approach for decision making
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The document discusses systems thinking as an approach for decision-making in agile transformations, emphasizing its importance in understanding organizational behavior and structures. It outlines the principles of systems thinking, its origins, and its components, and illustrates how traditional thinking differs from systems thinking. Practical applications, such as causal loop diagrams, are provided to visualize interactions within systems, alongside examples and potential impacts of these interactions.
Systems thinking - a new approach for decision making
- 1. Systems Thinking - a new approach for decision making
- 2. Juhana Huotarinen • Gofore Plc • Current: Advisor in Agile transformations and a Product Owner • Previously: Software developer, project manager, project director & executive committee • Twitter: @juhanaOne • Blogs: www.linkedin.com/in/juhana- huotarinen-16ab301 @JuhanaOne
- 3. Today’s menu @JuhanaOne Menu - Theory part - Practical session
- 4. A hot topic in the Agile world @JuhanaOne • Second principle ”Apply Systems Thinking”? • 8th principle ”Systems Thinking”? • First principle ”Adopt a systems thinking view of organizational transformation”? • Thinking tools for Software development are: “Lean, Agile, Queuing Theory and Systems Thinking”?
- 5. Origins @JuhanaOne • Based on Systems Theory • In 1958, Harvard Business Review published “Industrial Dynamics: A Major Breakthrough for Decision Makers” • In 1990, Peter Senge popularized systems thinking in his book The Fifth Discipline • Amazon listed 572 items related to ”Systems Thinking” 5/2018
- 6. What is a system @JuhanaOne Meadows DH (2008) Thinking in Systems. White River Junction, VT: Chelsea Green Publishing ” A system is a set of elements or parts that is coherently organized and interconnected in a pattern or structure that produces a characteristic set of behaviors, often classified as its “function” or “purpose.” A system is more than the sum of its parts. It may exhibit adaptive, dynamic, goal-seeking, self- preserving and sometime evolutionary behavior ”
- 10. What is systems thinking @JuhanaOne https://managementhelp.org/misc/defn-systemsthinking.pdf ”Systems thinking is a way to view systems from a broad perspective that includes seeing overall structures, patterns and cycles in systems, rather than seeing only specific events in the system”
- 11. System in action @JuhanaOne https://learnsystemsthinking.weebly.com/diagrams.html INFLOW OUTFLOW STOCK FEEDBACK
- 12. System in action @JuhanaOne https://learnsystemsthinking.weebly.com/diagrams.html CREDIT DEBIT R EARNING BANK ACCOUNT (Paycheck) (Spending) (Interest)
- 13. ELEMENTS •Players •Coach •Field •Ball •Referee INTERCONNECTIONS •Rules •Strategies •Players’ communication •Referee’s communication PURPOSE •Win game •Have fun •Have exercise More powerful, usually more hidden
- 14. @JuhanaOne 1. Today's problems come from yesterday's solutions 2. The harder you push, the harder the system pushes back. 3. The easy way out leads back in 4. The cure can be worse than the disease. 5. Faster is slower. 6. Cause and effect are not always closely related in time and space 7. Small changes can produce big results 8. You can have your cake and eat it too -- but not all at once. 9. Dividing an elephant in half does not produce two small elephants. 10.There is no blame https://www.linkedin.com/pulse/peter-senges-11-laws-systems-thinking-ivan-luizio-magalh%C3%A3es/
- 15. Traditional thinking vs systems thinking @JuhanaOne https://personalityhacker.com/podcast-episode-0039-systems-thinking/ The team works 30% longer –what will happen?
- 16. Traditional thinking vs systems thinking @JuhanaOne https://personalityhacker.com/podcast-episode-0039-systems-thinking/ The team is not performing well – what is wrong?
- 17. @JuhanaOne Why Agile frameworks lean on Systems Thinking?
- 18. ”80% of the systems performance potential is found in the interactions among the system’s parts while 20% of the total performance of a typical system is found in the parts themselves” - Richard Koch @JuhanaOne https://www.amazon.com/80-20-Principle-Secret-Achieving/dp/0385491743
- 19. ”96% of organization performance is a function of the organization’s structure. Only about 4% of an organization’s performance is attributable to the people - W. Edwards Deming ” @JuhanaOne
- 20. 60/30/10 Rule The team’s structure The way you launch the team The quality and level of team coaching A Theory of Team Coaching Author(s): J. Richard Hackman and Ruth Wageman
- 21. 60/30/10 Rule 60 The team’s structure 30 The way you launch the team 10 The quality and level of team coaching A Theory of Team Coaching Author(s): J. Richard Hackman and Ruth Wageman
- 22. @JuhanaOne Behaviour over time diagrams Root cause analysis Cause-and-effect diagrams System archetypes Causal loop diagrams https://thesystemsthinker.com/wp-content/uploads/2016/03/Systems-Thinking-Tools-TRST01E.pdf
- 23. When to apply? • To gain understanding of a complex situation • To gain sufficient understanding to make predictions of future system behaviour • To solve a problem • To create a new system @JuhanaOne https://www.burgehugheswalsh.co.uk/Uploaded/1/Docume nts/What-is-Systems-Thinking.pdf
- 24. @JuhanaOne ”The point is not merely to understand the world, but to change it” - Karl Marx
- 25. @JuhanaOne ”The point is to understand the world, and then change it”
- 27. Causal loop diagrams • Designed to visualise the ongoing dynamic interaction between elements in a system • Consist of variables connected by causal links with polarities and delays • Together, these create feedback loops @JuhanaOne
- 28. Goals • People, organisations, departments, and systems have goals • Goals often generate pressure for people to react (or act), with the intent of achieving the goal @JuhanaOne 20% more social media interactions To get 200 website referrals and 25 leads from LinkedIn To make 5 referral sales totalling 500,000 e Increased website visits and leads
- 29. Variables • The key elements that are closely related to the system • Are things, actions or feelings (nouns) • Can be measured • Quantities can vary over time @JuhanaOne HEALTHCARE DELIVERY Waiting list Waiting time Admission rate Patients in the hospital Hospital capacity Capacity utilization Duration of treatment Medical opinion New referrals
- 30. Causal links • Represent a connection or a relation between the two variables • Variable must has an effect on another • Positive polarity • Two variables move in the same direction • Births population • Negative polarity • Two variables move in the opposite direction • Deaths population • Sometimes there is a delay in the connection @JuhanaOne
- 31. Feedback loops • When one variable leads to a change in another variable that eventually leads to a change in the original variable • Positive feedback loop • Changes reinforces the initial change • Rapid growth or collapse • Bank account and interest earned • Negative feedback loop • Changes balances the initial change • The harder the push, the harder the system pushes back • Goal-seeking • Body temperature and sweating @JuhanaOne https://systemsandus.com/2012/08/15/learn-to-read-clds/ + + +
- 32. Before we start • Use nouns (as elements) • Correlation vs causal • If there are too many variables, try to bundle them • If a link between two variables is not clear, modify variables or add an intermediate variable • Long-term and short-term consequences almost always differs • Keep the model as simple as possible @JuhanaOne https://thesystemsthinker.com/guidelines-for-drawing-causal-loop-diagrams-2/
- 33. Exercise 1. Your software project has reached the halfway milestone 2. A new program lead just started last week 3. He has lot of new ideas 4. New ideas are attached on the wall 5. The group will select one idea ( 3-4 members in one group) 6. The group design a causal loop diagram Goal is to understand consequences with help of System Thinking @JuhanaOne
- 34. • Decision: team members work in multiple projects at the same time (shared recourse) • Decision: Story points are used as performance metric • Decision: a specialized testing team is created • Decision: Retrospectives are skipped because of the tight schedule • Decision: The Project is late. More team members are added to the project • Decision: Critical bugs are not fixed right away, instead bugs added to the backlog @JuhanaOne
Editor's Notes
- #2: Our mission is to change the world for the better THROUGH DIGITALISATION BY RENEWING WAYS OF WORKING VAlues 1. Gofore is a great workplace. 2. Gofore thrives on customer success.
- #4: Remind house rules
- #5: Scrum pattern is how to solve real world problems in a specific problems. Has worked 3 times
- #6: Systems theory is a thoery about the nature of complex systems in nature, society, and science, and is a framework by which one can investigate and/or describe any group of objects that work together to produce some result
- #8: Elements: descripises the characteristics of the system Interconnections: relationships among the elements and determine how elements will interact Purpose: descripes the goal of the system Collectiion is also composed of number of parts not interconnection or purpose
- #9: Finland is one of the country with no european champinship or world cup (andorra, san marino) appearances Soccer game is a system What are the elements What are the interconnections What is the purpose
- #11: definition seeing the whole
- #12: The basics: A stock is a noun, it can be measured at any given time and represents a quantity of something. An inflow and outflow are verbs and are measured over the course of time. Feedback is information about the stock and how the variables affect one another.
- #13: The bank account is the stock and always has a volume of cash, whether that is $3,109, $0, or $-52. The bank account will increase or decrease in size based on the amount of money going in (paychecks) or out (spending). The interest gained on the account will add to the size of the stock and is the feedback loop in this example.
- #14: impact is higher
- #15: Practises 1. Today's problems come from yesterday's solutions. Too often our solutions strike back to create new problems. 2. The harder you push, the harder the system pushes back. 3. The easy way out leads back in. Give a small boy a hammer. Leaders often have a few quick fixes in their "quiver" of solutions that have brought quick and easy success in the past. If the solution were easy then it should have already been found. 4. The cure can be worse than the disease. giving a man a fish and teaching him how to fish. Wrong asumpsions. Better not to do anything 5. Faster is slower. Thinking fast and slow - "System 1" is fast, instinctive and emotional; "System 2" is slower, more deliberative, and more logical. 6. Cause and effect are not always closely related in time and space. We are good at finding causes, even if they are just symptoms unrelated to root causes. 7. Small changes can produce big results -- but the areas of highest leverage are often the least obvious. The most grand and splashy solutions -- like changing organization policy, vision, branding or tagline -- seldom work for transforming change. Small, ordinary but consistent and repetitive changes can make a huge difference. kaizen 9. You can have your cake and eat it too -- but not all at once. Rigid "either-or" choices are not uncommon. Black and white. Remember that this is not a dilemma if we change our perspective or the "rules" of the system. 10. Dividing an elephant in half does not produce two small elephants. trying to analyze the parts independently is possibly the worst solution. 11. There is no blame. In a complex adaptive system there is no separate “other”. Everything and everyone is connected and together we co-create the whole system.
- #16: Everything can explainded in simple events. One direction. Systems thinking: feedback loops. Root causes are not individual nodes. Emerging from feedback loops Health, stress, motivation, productivity,
- #17: What is wrong with the team? What is wrong with the stucture, context, culture etc.
- #19: Author of The 80/20 Principle
- #20: Father of quality evolution, Total Quality Management based on his ideas
- #21: biggest impact team performace define the Vision, Product Backlog, team agreements (both inward and outward), how Team handles the conflicts, clarify the process, coordination techniques, roles&responsibilities,
- #22: Team perfromance define the Vision, Product Backlog, team agreements (both inward and outward), how Team handles the conflicts, clarify the process, coordination techniques, roles&responsibilities,
- #23: Behaviour over time diagram Patterns of Behavior Root cause analysis – 5 times why Cause-and-effect diagram –fishbone diagram System archetypes are "classic system stories," "generic structures," and "templates.” consista 2 or more loops
- #25: Systems thinking offers the means to understand; lean, the practice to change.
- #26: Systems thinking offers the means to understand; lean, the practice to change.
- #29: Sales and marketing goals
- #30: If the system is healcare delivery
- #33: We are not creating correlation loop diagram by getting rid of “positive” or “negative” qualifiers (e.g. “good,” “bad,” etc.) and stripping away action words (verbs).