Systems thinking definition Benefits of systems thinking How to become a systems thinker
In today's interconnected business landscape, the problems leaders encounter are rarely isolated; they often span multiple departments, stakeholders, industries, and geographies. Gone are the days when leaders could rely on clear-cut data and straight forward cause-and-effect relationships. Today’s leaders are expected to make high-stakes decisions with incomplete information from a growing list of sources, deal with conflicting priorities, and deftly predict unintended consequences.
In this new reality, systems thinking—or the ability to navigate ambiguity and complexity—has become a critical leadership capability. Leaders who possess this skill are able to synthesize a vast amount of information, connect seemingly disparate dots, and make informed decisions. They understand the intricate web of relationships that define their organizations and markets and are able to bring their stakeholders along on the journey ahead. In an unpredictable world, this ability offers them a crucial edge.
Synthesizes ambiguous and discrepant information. |
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Effectively evaluates situations without oversimplifying. |
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Connects diverse issues and data into coherent insights. |
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Leverages intuitive insights to clarify vague information. |
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Prefers higher levels of complexity and utilizes logical reasoning processes. |
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Quickly grasps new concepts and acquires understanding with ease. |
Dana Landis
Leadership advisor, Russell Reynolds Associates
Systems thinking enables leaders to see patterns where others see only chaos. They are able to navigate complex and ambiguous situations. They are able to absorb information, pay attention to what is meaningful and what is a distraction, weigh up the risks, and make a decision on the path forward.
While these leaders often arrive quickly at their solutions, they must be careful to bring their organizations along. If these leaders do not show how they arrived at a conclusion, they can risk alienating and de-motivating their teams. Leaders need to be able to walk this line, blending their high intelligence with self-awareness and an attunement of the people around them.
Those who can do this typically deliver four key benefits.
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Enhanced problem solving.Systems thinking dramatically improves a leader's ability to solve complex problems. By understanding the interconnections within an organization and the ecosystems within which it sits, they are able to consider a wider range of inputs and outcomes, leading to more informed and forward-thinking choices. This approach leads to more effective, longer-lasting solutions that address issues holistically, reducing the likelihood of unintended consequences, and the recurrence of problems. |
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Ability to cut through complexity.Systems thinkers are able to translate a wide range of complex inputs into a coherent strategy. They can navigate a sea of information, distinguishing between crucial insights and peripheral noise. But they don’t just plow forward in isolation. They are instead able to transform their intricate analyses into a straightforward, compelling narrative that galvanizes the entire organization and stakeholders around the journey ahead. This is particularly helpful in times of crisis or transformation, when these leaders are able to quickly develop and communicate a point of view on the best path forward, providing a welcome sense of direction to an organization that might otherwise be paralyzed by indecision. |
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Stronger innovation and creativity.By breaking down silos and encouraging cross-functional thinking, a systems thinker creates an environment ripe for innovation. Their holistic view often leads to breakthrough ideas that wouldn't emerge from traditional, linear thinking. Take sustainability, for example. A systems thinker would look beyond immediate actions like reducing energy consumption, and instead examine the company's entire operations, supply chain, and stakeholder relationships. They might identify unexpected connections, such as how sustainable practices could open new market opportunities, and in turn, transform sustainability from a compliance issue into a strategic advantage. |
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Enhanced stakeholder management.Systems thinking provides leaders with a more comprehensive view of their stakeholder ecosystem—even as it becomes more complex and diverse. By understanding the interplay between employees, customers, suppliers, investors, and communities, leaders can better balance competing interests and create value for all parties. They also know what information to share and with whom, flexing their communication across different stakeholder groups. This approach leads to more sustainable relationships, improved reputation management, and ultimately, long-term organizational success. |
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Erin Zolna
Leadership advisor, Russell Reynolds Associates
Of course, systems thinking comes more naturally to some people than others. But executives always have the chance to refine some or all of their leadership style. All leadership skills can be hugely improved with attention, focus, self-awareness, and self-regulation.
Start with self. The best leaders are voracious consumers of data and are constantly finding ways to create space in their schedules to stay curious outside the “day to day” of their roles. They convert their self-awareness into “self-knowledge”—the ability to adjust their behaviors and their rituals to take into account when they are in positive or negative situations. They know what triggers their stress and energy depletion and have mechanisms for recovery (both physical and mental) that they apply consistently. |
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Strong networks. Leaders need broad and rich networks—inside and outside of their organizations, and at multiple levels. The best leaders are very connected, hearing 360-degree inputs from employees levels down, their peers, and a wide range of external sources. These insights are not only critical to ongoing self-awareness and development—they also help leaders to filter each new instinct through a trusted set of colleagues and team members who will challenge and even redirect to get the optimal outcome. |
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Intentional inclusion. Great leaders assertively pull perspectives from everywhere into their decision-making processes. No matter how expansive or fast thinking a leader may be, their pattern recognition will be improved if they actively get other brains on the challenge and resist the temptation to go it alone. Every leader needs a “kitchen cabinet” to help them hear the truth and make the right decisions. Nothing is truer than the adage that senior leaders don't hear the unvarnished truth enough—so great leaders seek it out. |
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The power of stories. As leaders own their development journeys and prioritize moments of reflection, stories can be an especially effective way of demonstrating authenticity and vulnerability. Some leaders are natural storytellers they need to make sure their stories don’t sound too slick or superficial. Other leaders struggle with opening up and sharing—requiring structure, practice, and feedback to hone a few stories that can make an impact. |
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An excerpt from Sustainable Leadership, a book by Clarke Murphy
João Paulo Ferreira |
What does that look like in practice? Natura’s entire approach to the global pandemic was a case in point. [Its CEO] João Paulo and his team’s solutions for the crisis looked at the needs of the business and the community from multiple angles, restoring revenues while simultaneously taking care of employees, sales reps, the communities in which they operate, and beyond. Business had been severely disrupted, with 90% of stores closed worldwide and major restrictions on production and distribution. Yet every action step was taken to not just ensure the physical safety of employees and sales reps but also to boost morale while keeping the wheels of the business moving, hiring and ramping up production activity to quickly meet new areas of demand. |
Natura &Co’s first priority was to help its direct-to-consumer, relationship-driven salesforce—enough people to populate a large city—navigate the situation. So the group rolled out a “Time to Care" initiative. At the height of the uncertainty, employees were invited to pledge part of their pay on a voluntary basis, to help tackle the crisis and ensure continuity of activities. Thanks to Natura &Co’s impressive financial results, the group returned the donations at the end of 2020.
The move was not just good for the Natura community but also for business overall. Sales volume increased to the point where Natura had to repurpose a vacant warehouse into a distribution center. Those who could work remotely were sent home, no one was fired, and, again, the leadership went to great lengths to protect factory employees, swiftly repurposed its manufacturing to increase production by 30% to meet the shifts in consumer demand. The company also offered credit flexibility to the network of consultants and representatives, with payment terms and additional emergency funds. Employees, franchisees, consultants, and representatives also had access to telemedicine, mental health resources, and grief support, and have been encouraged to maintain connections with their colleagues, friends, and family.
Again, João Paulo didn’t just come at the problem from one direction. He carefully designed a considered, multilevel approach to a major global threat that spanned various aspects of the business and connected viscerally with stakeholders.
Source: Sustainable Leadership, Russell Reynolds Associates, 2021
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