November 10, 2014 Last updated September 18th, 2018 3,988 Reads share

How Systems Thinking Makes You An Effective Leader

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There was a time when people thought of businesses as some sort of machine. However, people are not very good cogs. They are just too likely to have their own ideas and ways of doing things. So, the business as machine concept is useless. Instead, leaders have to acknowledge the complexity in both the business environment and within their own organizations, large and small. Due to this complexity, it makes far more sense for leaders to look at their companies through the lens of systems thinking.

What is systems thinking?

At its most basic, a system is a group of parts organized to achieve a goal. The parts are subsystems which perform certain functions to support the whole. Your organisation is a system plus it is made up of individuals and smaller groups of people which have their own quirks, personalities and ways of doing things.These individuals and smaller groups of people are sub-systems.

When you look at your company, you and your team make up the subsystem of leadership, your administrative staff make up the subsystem that focuses on the day-to-day tasks and your sales staff are the subsystem that seeks and acquires customers and revenue. If you were to look at each section of your organisation, you would see how each subsystem combines to make the whole system.

Systems thinking makes you an effective leader

If you begin to imagine your company as a living body, systems thinking makes a little more sense. If you were to take the organisational chart of your company and draw a line to anyone, how would you describe how you are connected to him/her? If that person were to draw a line to someone else in the organizational chart at any level, how would he/she describe the connection? By noticing how you and each part of your organisation actually affects one another, you are engaging in basic systems thinking.

When there are breakdowns (missed deadlines, conflicts, customer complaints, etc.), it is easier to explore the issues and find a way to resolve or manage the problem. As the leader, you can define how involved you get, share power more easily and be more focused on how you contribute to the system overall. This can support the overall business goals and nurture a positive work culture.

What can leaders do to foster systems thinking?

Systems thinking really only works if it is mandated throughout the company.

  • Foster a learning environment. Modelling your own development as well as encouraging everyone to attend training, watch videos (like TED), read blogs and books, provide coaches and explore ideas is fertiliser for innovation and opportunity.
  • Encourage cross-communication to avoid silos. Creating common space, company-wide events and supporting cross-disciplinary projects keeps communication open and available.
  • Make time to connect in person with all levels of your company. When the leader is seen chatting with everyone, this becomes a cultural norm and it is a terrific way to see problems and opportunities before they become unwieldy.
  • Support critical thinking- questions and dissent. Using the “5 Whys” or simply inviting input from others encourages everyone to think more creatively and become more aware of their own biases
  • Model clear identification of problems before deciding on a solution. Clarifying obstacles and issues as much as possible demonstrates a leader’s management of impulsivity and anxiety. This encourages the team to develop those skills in themselves.
  • Maintain the focus on the current business goals and vision. Keeping the leader and the team focused on the same goals and vision prevents getting off track with fads and supports accountability for all.
  • Review the strategic plan at least biannually. Scheduling regular reviews reinforces that the implementation of the plan, people’s roles and actions as well as the time and energy spent on developing the plan are important both on a human level and organizational level.

Systems thinking is the melding of the leader and teams into one organisation

Beyond simply fostering better leadership skills in just the CEO-type person at the helm of the company, systems thinking reminds us that our businesses do not grow magically or simply based on one personality. From the person answering the phone to the comptroller to the leader, all are part of the overall system and together create a thriving and responsive business.

Systems thinking makes you a more effective leader by focusing how and when you use your particular skill set, empower your team and staff to do their jobs competently and keep everyone focused on the business goals.

Images: ”Teamwork of businesspeople at work to build a business


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Elli St.George Godfrey

Elli St.George Godfrey

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