So many of the issues I’ve discussed in the SP3 blogs involve unique ways of thinking – most notably, systems thinking, strategic thinking, and design thinking

By definition, a system is a configuration of parts connected and joined together by a web of relationships. Systems thinking, and practices are methods and ways to identify and address challenges, to see underlying patterns, find leverage points, and to choose actions that may provide healthier outcomes. Ultimately, systems thinking addresses four major questions:

  1. How can one map the environment, within which we live, as a system?
  2. How can one engage the system to have highly leveraged impact?
  3. What is the system’s underlying theory of change?
  4. How can one test a system to learn and adapt?

For example, if you are attacking issues related to the circular economy, you will probably find that systems thinking is perfect for this intractable challenge. The very notion of circular suggests that many usual techniques for creating such an outcome cannot be used.

One way to identify the appropriateness of your challenge for systems thinking and practices, is to ask yourself if the following conditions apply to your situation:

  1. You are not sure you understand the problem fully, let alone the solution;
  2. You find significant diversity of opinion and even conflict among stakeholders and experts about what to do;
  3. Many people have identified diverse and dynamic interconnections between the problem and the broader environment;
  4. The environment is unstable and dynamic (political, social, economic characteristics are changing);
  5. Your goal is to make sustained change at a broad scale;
  6. You are willing to use systems thinking and practices to address your challenge.

If you answered “yes” to these questions, you should incorporate systems thinking and practices.

The rest of this blog will outline the process and subsequent blogs will explain the various process stages.

People have adopted this process to their specific situations; yet, they have found you cannot skip steps to get an effective solution. The usefulness of systems thinking, and the related practices, are contingent on the approach’s integrity. That is, you must go through the process and provide the necessary time and thinking to make systems thinking effective.

The process includes:

  1. Launch: form your team and set your goals – you’ll need a guiding star and anear star; it’s also important to ask questions related to the iceberg;
  2. Discovery: explore forces; define stocks and flows; analyze causes and effects; create initial loops;
  3. Build Maps: discover deep structure; define a theory of change; build your map; craft a narrative; socialize and iterate your map;
  4. Find Leverage: further develop a systemic problem statement; find opportunities to leverage; articulate your hypotheses; evaluate feasibility and potential for impact. (Note that the problem statement comes in the fourth phase. This placement affords you the time to collect information and to map the system before addressing ways to make the system healthier;)
  5. Act Strategically and Learn: maximize the potential for leverage; develop key performance questions and actions; experiment; learn from the system.
For example, you’ll quickly learn that systems thinking helps to develop a theory of change to attack important social issues. A theory of change is a logical progression of actions from inputs to impact. A typical theory of change includes the following
  • Inputs
  • Activities
  • Outputs
  • Outcomes
  • Impact

SP3 Capital uses a theory of change to guide its investments, a theory we developed through system thinking and mapping a larger system of factors that are interrelated. We express this theory of change as follows (in a simplified version):

  • Input: capital; business acumen
  • Activities: support business entrepreneurs
  • Outcomes: wealth accumulation
  • Impact: improvements in upward mobility
All sorts of individuals are specifying the need for systems thinking, yet few have found ways to use this process to solve problems. New economic research is showing that challenges aren’t single strands but a spider web of them.

Atief Mian, an economist at Princeton, and his colleagues have challenged common wisdom around the relationship of interest rates and economic growth. They found, through systems thinking, that many of these assumptions are wrong. 

Systems thinking is not new. It has been around for many years.  Researchers in sociology, biology, population medicine, economics, and business have used this thinking process. Yet, systems thinking, and methods, have taken a back seat to many new techniques such as Artificial Intelligence and Big Data analytics. What scientists are realizing is that these new techniques are best informed by systems thinking – a thinking that helps researchers see patterns, leverage points, and strategies. 

Stay tuned for future blogs to see how to do systems thinking and how it can improve attacking important challenges our world faces.

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