When running an organization – or even a project – “systems thinking” is essential.
Simply put, a system is a dynamic, purposeful collection of components. There are various types of systems (e.g., ecological, biological, mechanical). In the case of organizations, you have people, information, and capital, all working toward a common purpose (hopefully!). Organizational systems tend to be quite complex, with multiple subsystems (such as departments and information technologies), numerous feedback loops, and permeable boundaries (interacting outside of the organization).
The need for managers to apply systems thinking is increasing. The overall intricacy of operational systems can be confounding. With the increasing pressures to make decisions more quickly, a holistic, process-oriented perspective is essential to avoid unintended consequences, like sub-optimization – i.e., improving one area, while creating problems or increasing costs in other areas.
From a LEAN perspective, taking a systems view enables continuous improvement:
You don't have to go that far to gain the perspective of systems thinking and experience continuous improvement. It is a good idea, though, to occasionally examine how you are doing. One way is to walk through the key processes of your operation, such as customer service, accounts receivable, inventory management, and purchasing, asking "Why do we do this?" and "What is that used for?". Another is to track the issues and exceptions that you have to deal with over a period of months, and then look for underlying causes (remember, don't sub-optimize!). If you're a project-based organization, add a feedback loop to debrief at the end of the project -- examine what went well, what didn't, what were the surprises, and discuss what you can do better next time.
If you work the system, the system will work better for you.
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