Innovation and Systems Thinking
I am currently on the theme of analysing trends and getting insights to understand customers’ requirements as a starting point for innovation. I have touched on trend spotting, scenario planning and Big Data as applicable topics to this theme. To conclude with this theme, I want to look at Systems Thinking as the final piece of the puzzle of where to start with innovation.
What is a system? Take a few simple examples: The cars we drive are made up of systems (e.g. steering system, suspension system, emission system, cooling system, transmission system) and they are also components in other systems (our nation’s transportation system, the air we breathe – in terms of pollution, and our economy in terms of jobs created here and elsewhere to manufacture, buy, sell and service cars). Your organisation is also a system in itself and part of the economic system. Systems are, in short, sets of processes in which both independent and interdependent elements interact to form a complex whole generating one or more outcomes. The outcomes of a system depend upon how the parts (e.g., with the market for locally grown food) interact and influences from the containing system (e.g., the overall economy).
Systems Thinking is then the holistic approach to analysis that focuses on the way that a system’s constituent parts interrelate and how systems work over time and within the context of larger systems.
So just before you think I have completely lost my marbles, let me explain why Systems Thinking is such a powerful method of analysis and what it has to do with innovation. As the world becomes increasingly interconnected, globalization grows our social systems in complex new ways. Technological advancement spawns system after system, each increasing in interdependence on other systems that have come before (Internet, software, GPS, power grid, mobile networks, etc.). International trade ties nations together in powerful economic feedback loops. Policy changes in one nation inevitably cause ripple-effects in another. Systems if ever they were separated, are determinedly moving towards interconnectedness as we hurtle into a globalized future. All of these systems feed into each other to produce extremely complex, unpredictable effects. Or, do they?
With the use of Systems Thinking, one can hope to better understand the deep roots of these complex behaviours in order to better predict them and, ultimately, adjust their outcomes. The basic idea introduced by Systems Thinking, is that to manage a system effectively, you might focus on the interactions of the parts rather than their behaviour taken separately.
As upsetting as unstable systems can feel, and as uncertain as future outcomes become, they create opportunities for innovation. Anything an organisation or individual can do to address opposing trends – to let steam out of the system, so to speak – will generate tremendous value. In essence, the unstable system works like a magnet, attracting needed innovations to how the system operates. To make it practical, just look at some of the challenges we currently experience in our economic- and social systems: the milk industry, the energy crisis, the weakening currency, the land issue, globalization, etc. To find a starting point for innovation, identify the variables impacting the system (e.g., a market) within which your organisation operates. Then, identify trends underway in these variables. Identify those trends that are in opposition. Then ask, what innovations might deal with two or more opposing trends? Those are your dig sites to unearth new ideas for your organisation.
While complex, unstable systems are the hardest to track, they are filled with significant innovation opportunities, which can be unlocked through Systems Thinking.
I have now finished with the theme of the starting point for innovation. Next time I want to look at how to successfully sell your ideas in your organisation. I conclude with a relevant quote from Buddha: “All things appear and disappear because of the concurrence of causes and conditions. Nothing ever exists entirely alone; everything is in relation to everything else”.
Arnold, R. D., & Wade, J. P. 2015. A Definition of Systems Thinking: A Systems Approach. Procedia Computer Science, 44, 669-678.
Plantes, K. 2011. How to use Systems Thinking to Unearth Innovation Opportunities. Online: http://www.innovationmanagement.se/imtool-articles.