Introduction To Systems Thinking (For Practical People)

Introduction To Systems Thinking
The goal of this guide is both straightforward and ambitious – you will learn systems thinking on a very practical level.

At the end of this blog post, you will be able to see, analyze, design and optimize systems for yourself as well as for the people around you.

Besides introducing the vision of practical systems thinking, this guide dives deep into core concepts, real-life examples and application advice.

But don’t get fooled, this guide is no theoretical fluff. All the mentioned ideas and approaches can be translated directly into action. Every theoretical concept has a practical reference for your daily life.

Enjoy.

Table Of Contents

The following table of contents summarizes all the subtopics covered by this guide. To get the full benefit, I recommend reading the chapters in a linear fashion.

But if you are interested in a particular subject, click on the associated link, and you will be navigated to the corresponding section in this blog post.

  1. Systems Thinking Foundation
  2. Systems Thinking Concepts
  3. Applying Systems Thinking

1. Systems Thinking Foundation

 

a) The Vision Of System Thinking

When people hear about systems thinking, they usually listen up. It’s strange, but it seems that people intuitively understand that systems are crucial for living a structured and successful life.

And indeed, the importance of systems thinking is easily explained: Literally everything in your life is a system. Be it your household, your job, your finances or your relationships.

This fact leads to a simple conclusion:

If you improve your system thinking skills, you will be able to improve all areas of your life.

Some examples:

  • If you improve the systems (i.e. documentation, automation, communication) at your job, you will get more done in less time.
  • If you improve your money-saving and investment-system, you will have a larger fortune.
  • If you improve your household system, your house will be tidier and cleaner.

But wait, there’s more – the vision of living a systems-based life is exciting and worth pursuing.

By having systems in place, you will take control of your life.

Imagine a scenario where all of your life areas, from your morning routine to your finances, are sorted out. Your daily activities and habits are aligned with your long-term vision.

However, this doesn’t mean you will live a robotic life. On the contrary, you will gain more time, money and energy, which, in turn, means more resources for your hobbies, passion, and creativity.

Sounds amazing, doesn’t it?

b) The Harsh Truth About Systems Thinking

The vision of living a systems-based life sounds promising, however, learning systems thinking is a struggle.

But why is that?

The reason, very simply, is that most systems thinking advice on the internet is very academic. When you start researching online, you will find complex concepts including feedback loop diagrams, dynamic simulations or computer-based modeling tools.

While this is all nice and good, you won’t be able to put this knowledge directly into action. Or, in other words, you won’t improve your life with this kind of theoretical advice.

Don’t get me wrong, all of these concepts have their rights to exist. But with all of this theory, it’s hard to understand the practical value of systems thinking.

Actionable, easy-applicable advice is hard to find. So obviously, there is a large gap between theory and practice.

So, how does a normal human being start to implement systems thinking in his life?

c) Practical Systems Thinking – Why You Need It

To end this confusion, I came up with a new term – I call it Practical Systems Thinking.

Practical systems thinking has two primary goals:

  1. Efficiency: Improving the systems in your life to get more done using less of resources (time, money, energy)
  2. A deeper understanding of reality: Understanding life on a deeper level to gain more insights and shape your future.

Practical systems thinking is heavily based on the Pareto principle, which, in short, defines that 20% of your effort leads to 80% of your results.

The same fact is true for systems thinking. A tiny fraction of systems thinking knowledge can lead to massive results, be it in your career, your relationships, or your personal projects.

However, this principle only applies if you know to navigate through the endless systems thinking resources on the internet. You need to know which resources are important, and how they relate to each other. Otherwise, all of these ideas, concepts, and examples won’t make any sense to you. There is a danger that you won’t see the bigger picture.

d) What Is A System? 

Before we go any further, let’s define the term system. In our context, two definitions are necessary.

„A set of detailed methods, procedures and routines created to carry out a specific activity, perform a duty, or solve a problem.“  1

This definition focuses on productivity because it deals with the question “What needs to be done to achieve a goal?”. It focuses on the result of a system by following a repeatable process.

The second important definition of the term system is this:

„An organized, purposeful structure that consists of interrelated and interdependent elements. These elements continually influence one another (directly or indirectly) to maintain their activity and the existence of the system, in order to achieve the goal of the system“ 2

This definition is more abstract than the previous one. It focuses on the parts of a system and hence on its structure. In reality, these parts could be humans, machines, or organizations.

These two definitions will help you to get a better understanding of the term system within the context of practical systems thinking.

In case you want to dive deeper into systems theory, have a look at the following short video. It contains a more detailed description of the term system and also describes the characteristics of complex systems:

e) Systems Thinking 101

Systems thinking has many definitions – but when it comes to practical systems thinking, the following definition is fully sufficient:

Systems thinking is the ability to identify, model, create and improve systems to make your life and other people’s lives better  

A deeper explanation of the term systems thinking can be found in this 2-minute video by systems thinking legend Peter Senge.

There are, of course, many other web resources explaining the power systems thinking. These are some of the best:

f) System’s Mindset

Let me tell you a secret about systems thinking – Identifying systems is already half the battle.

Once you are able to see a system, you can improve it. It’s easy as that. This skill can be achieved by establishing a system’s mindset. 

But, how do you get it? To answer this question, I found the following two videos to be really helpful.

The first video is by Leo Gura in which he looks at systems thinking from a rather philosophical perspective. He dives deep into systems thinking principles and illustrates how they can be used to improve understanding of life and existence itself. He also talks about the characteristics of systems thinkers and explains why systems thinking is the highest form of self-actualization. As you can see, this video is definitely worth checking out:

Another great video to achieve a system’s mindset is produced by Sam Ovens. He takes a more practical approach than Leo Gura and breaks down why success in life and business depends hugely on your systems thinking abilities. Among other things, Sam teaches you how to view everything in life as a system. He also shows how systems thinking works in detail and breaks down real-life examples. Don’t miss this video:

2. Systems Thinking Concepts

 

a) How To Apply Systems Thinking?

Before you put systems thinking into practice, make sure you build a mental toolbox of systems thinking models. In other words, you need to learn some theory.

In this way, you have a tool belt of systems thinking concepts which can be applied successively when being faced with a complex problem.

The motto of this section is simple: The more you read, the better.

The following concepts have no direct logical dependencies, meaning that you can read them in any order you like.

b) Basic Principles

„As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.” – Harrington Emerson

Systems thinking is based on a core set of principles. Once you understand them, systems thinking will be far easier to grasp. You will get a better “feel” for systems and build a deeper understanding, helping you to learn new systems thinking concepts quicker.

A great blog post about this topic is written by Leyla Acaroglu. She breaks down the 6 most important systems thinking concepts with epic infographics. This blog post is a must-read –  The 6 Fundamental Concepts of Systems Thinking 

Two other interesting articles about systems thinking principles are „10 Useful Ideas On Systems Thinking” and „15 Systems Thinking Guidelines To Live In A World Of Uncertainty”.

To understand how all of these principles work in action, check out this short video. It’s an amazing illustration of complex systems interactions.

c) Systems Mapping

Before a system can be improved or analyzed, it first must be understood. Or more precisely, you have to break down its functioning and its environment. This skill is called systems mapping.

It’s the process of analyzing real-world systems and transforming it into a simple, theoretical model.

Every systems mapping process includes these three fundamental components:

  • Parts – building blocks of a system, i.e. people, assets, organizations, machines.
  • Flow – describes the interaction between parts, i.e. information, communication or material flows.
  • Environment – Everything beyond the system boundaries.

To explain these components, let’s try to create a basic system for investing your monthly salary.

The goal of this system is straightforward – managing your finances and building long-term wealth.

1. Environment

First, let’s sketch the boundaries between our investment system and its environment in which it operates:

System's Environment

As you can see in the figure above, any investment system exists within the global economy, and hence, largely depends on it. The global economy consists of endless actors like countries, companies, finance experts as well as current trends (i.e. digitalization) and conflicts (USA-China economy war) which are created by these actors.

2. Parts

Once we understand the boundaries of the investment system, we can look deeper into the system itself and identify its most important parts:

  • Salary (Your monthly income)
  • Saving Process (The activity of putting money aside)
  • Spending Process (The activity of spending your money)
  • Basic Investment Strategy (The way you are investing your money)
  • Bank Accounts (The places where money is stored)

3. Flow

Lastly, you must understand how the parts of the system interact with each other. This could look like this:

System's Environment, Global Economy

Rectangles represent the parts of the system and flow is visualized by the arrows between parts. In the case of this example, flow means the flowing (movement) of money.

Looking at the functioning of the system itself, the monthly salary serves as the input of the system. It flows into three containers:

  • 1) Your fixed costs (rent, food, and insurance)
  • 2) Fun costs (hobbies, travel, and luxury)
  • 3) Investment Process (The way you invest your money)

The investment process is based on an investment strategy, which currently consists of three different investment approaches: stocks, real estate, and bitcoins.

It should be also noted that the strategy gets constantly refined based on the current global economy (see the blue, two-sided arrow). For example, if there’s a global recession, you act more risk-averse and start to invest in bonds instead of risky stocks. Thus, a good system has to be in constant exchange with its environment to achieve improvement.

This example shows that simple systems mapping process helps massively to get the big picture. It also serves as a foundation for further systems improvement. For example, you could think about refining your sub-systems or using automation with the help of technology (i.e. financing apps).

How To Do A Basic Systems Mapping

To some people, the skill of systems mapping comes naturally. Especially if you are working as a software engineer or UX Designer, sketching diagrams, structures and processes will be easy for you.

But even if you don’t work in such a job, don’t get discouraged. There are no special rules on how to do systems mapping. As long as you stick to the three components (environment, flow, and parts), you are good to go. It builds a solid foundation on which you can apply the next concepts of this web guide.

In case you want to dive deeper systems mapping methods and examples, I recommend these three web resources:

  1. Tools for Systems Thinkers: Great systems mapping method created by Leyla Acaroglu
  2. Systems Map: video showing an interesting example of an intuitive systems mapping process
  3. Systems Mapping: interesting video about the basics of systems mapping

d) Systems & Goals

„You do not rise to the level of your goals. You fall to the level of your systems.” – James Clear

Humans are obsessed with their goals. But when it comes to following through, we quickly get overwhelmed.

Why is that?

We overestimate the importance of goals, and underestimate the power of systems.

Systems & Goals

If you want to achieve a goal, you better have a system in place. Otherwise, your pursuit will produce random or even chaotic results.

In his blog post „Systems Over Goals”, James Clear describes the shortcomings of goals. He argues that systems are the most important cornerstone of success.

However, systems are no end in itself. Systems are built to achieve goals. Nat Eliason reminds us about this fact in his blog post „Systems Without Goals Is A Path To Mediocrity”.

So in essence, you need both, systems and goals. But how can they be aligned with each other?

A possible solution is presented by Flavio Rump in his Medium article „Systems Versus Goals”. He breaks down an 8-step process to translate your goal into an applicable system. Two powerful concepts mentioned by him are„social contracts” and „measurability”.

e) A System’s Environment

„It’s inevitable your environment will influence what you do.” – Duncan Sheik

Let’s perform a short thought experiment: Imagine you are in the process of starting a new business. You have supportive investors, an amazing product and a perfect founder-team.

Sounds great, right?

And now, let’s add just a last small detail: Your business operates within a sluggish and unprofitable market.

This simple fact changes everything. Sales will be much harder because customers won’t have the money and mindset to invest in your new product, even if it’s extremely useful.

This example shows that a system is significantly influenced by its environment. A system won’t produce good desired results if its environment doesn’t have a positive influence.

Two helpful blog posts highlighting the power of the environment are „How To Improve Your Health And Productivity Without Thinking“ and „Motivation Isn’t Enough. Environment Literally Shapes Your Life“.

Using Environment Design In Your Life

But, how do you harness the power of a system’s environment?

Easy – next time you want to create or improve a system, take a step back. Have a deep look at its surroundings. Where are the interfaces between your system and its environment? How do they interact with each other?

While you do this, it can be a challenge to differentiate between a system and its environment – where to draw the line?

There’s an easy guideline to solve that problem: A system can be controlled, an environment only can be influenced.

So, for a CEO, his company is the system. The market (competitor, partners, customers), however, is the environment because it can only be influenced.

Once you understand how the environment affects your system, you can react in three ways:

  • Adapt – Create a symbiosis between your system and its environment.
  • Protect – Be like Donald Trump, build the Mexican wall, and start a trade war between China and the United States
  • Change – It’s also possible to change your environment completely. Two good examples are the companies are Yelp and Slack, which became successful by changing their market.

f) Iteration

„It is better to take many small steps in the right direction than to make a great leap forward only to stumble backward” – Louis Sachar

Every beginning is difficult. We all know that. From a system’s perspective, this phenomenon is summarized by Gall’s Law:

„A complex system that works is invariably found to have evolved from a simple system that worked. The inverse proposition also appears to be true: A complex system designed from scratch never works and cannot be made to work. You have to start over, beginning with a working simple system.” – John Gall

Gall’s law has a wide range of applications, whether we talk about human evolution, business or even learning a new skill.

Systems Thinking - Iteration

A great example of Gall’s Law is described by Justin Jackson in his blog bost „I wasted 4 years of my life doing this”. He explains how he built his business by starting small by applying Gall’s law and Just in Time Learning.

How can you apply Gall’s Law in your daily life?

Next time you start a new project (aka build a system), start small. Build a tiny system first. Keep tweaking and get constant feedback by defining and measuring a success metric. Once your system works reliably, it’s time to increase its complexity. This concept is also described as the Build-Measure-Lean cycle. A detailed explanation can be found in „How The Build-Measure-Learn Cycle Really Works”.

g) Bottlenecks

„Having no problems is the biggest problem of all” – Taiichi Ohno

A key idea of systems improvement is maximizing throughput.

Throughput is defined as the  „productivity of a … system over a unit period, expressed in … a term meaningful in the given context, such as output per hour, cash turnover, number of orders shipped.“ 3

For different systems, throughout can mean different things:

  • If you are a writer, this could be the amount of word you write within an hour.
  • If you are a car salesman, it could be your sales number within a day.
  • If you are a manufacturer, it could the number of units you produce within a month.

If you want to maximize output, you have to face one powerful enemy along the way – he is called bottleneck:

„A bottleneck is a hindrance to productivity, efficiency and speed. The term is an analogy to the shape of a bottle that that narrows at the neck. A bottleneck is typically a component of a process that is slower than anything than everything that depends on it.” 4

A good example of a bottleneck is an almost perfect company with the exception that they have a slow and inefficient sales process. In this case, the sales department is the bottleneck because it hinders the success of the whole organization -no matter how efficient, determined or flexible the company is.

Systems Thinking, Bottleneck

A bottleneck can take down your whole system, even if the rest of the system works perfectly. Thus, it’s important to provide downside protection by eliminating bottlenecks before making radical changes within a system.

How To Find Bottlenecks

In case of a simple system, identifying a bottleneck is straightforward because people intuitively know what hinders them:

  • In your social circle, it could be a toxic friend.
  • In your job, it could an inefficient management process.
  • If you want to lose weight, it’s nutrition.

But once a system gets too complex, you have to take a more methodical approach. I found two guides to be very helpful to achieve this. Both of these web resources are based on the “Theory Of constraints“ method by Eliyahu Goldratt:

h) Iceberg Model

„I always try to write on the principle of the iceberg. There is seven-eights of it underwater for every part that shows.” – Ernest Hemingway

When it comes down to solving deep-rooted problems, human beings quickly get overwhelmed. We tend to see symptoms only, go for the quick fix and neglect the deeper causes of problems.

However, real change can only happen when problems are tackled at source.

A great mental model to achieve this kind of thinking is the iceberg model. It acknowledges the fact that deep-rooted problems are invisible to the human eye. Like an iceberg, where only approximately 10% of its mass is visible and the rest is under-water:

Iceberg Model

The iceberg model consists of 4 layers:

  • Layer 1 – Events: Observable happenings and actions that happen in day-to-day life.
  • Layer 2 – Patterns: Patterns are formed by events happening over time in the form of trends or changes.
  • Layer 3 – Systems: The deep underlying structures which create patterns and events on an ongoing basis.
  • Layer 4 – Mental Models: The beliefs, norms, assumptions, and dreams that drive human behavior.

A great visual explanation of the iceberg model can be found in this 7-minute video:

Iceberg Model – An Example

To illustrate the 4-layered iceberg model, we will try to analyze the problem of „global environment change“:

Events:
We all experience the events of global environmental change: Hot days, sunburn, tornados, fires, and Greta Thunberg.

Patterns:
If we analyze these events over time, we notice patterns like the melting of glaciers, water pollution, temperature increase in the last 50 years or an increase of environmental catastrophes.

Systems:
Assuming that human beings are responsible for global climate change, some of the associated systems are CO2 production, international air-transport, inefficient recycling systems and unhealthy economic growth (capitalism).

Mental models:
All mentioned events, patterns, and systems have been produced, or at least influenced, by human minds. Thus, it’s essential to analyze the underlying beliefs, values, and models which have led to our current environmental situation on earth. One interesting mental model worth analyzing is the human „growth-mindset”. Basically, it can be said that this mental model promoted human progress throughout history. However, used in an unhealthy way, it can lead to short-term thinking, greed and ignorance causing thoughts like „the more the better“ or „the next generation will fix environmental problems”.

Next time you are trying to solve a problem systematically, think of the iceberg model. Start to observe the events, and dive deeper into the problem until you reach the deepest layers of the iceberg, namely systems and mental models.

When it comes to the solution of a complex system-problem, the following rule applies:

The deeper the layer your solution aims at, the higher its leverage.

Think of the global issue of „environment change“. As long as we keep fighting against symptoms (events) like applying sun lotion and inventing tornado detection systems, we will create an artificial complexity which will lead to environmental disasters in the near future.

Instead, we have to look below the surface and redesign our most important systems and mental models to achieve long-term success.

i) Leverage Points

„Give me a place to stand and with a lever I will move the world“ – Archimedes

As a child, most of us learned about the lever concept.  In a nutshell, „a lever amplifies an input force to provide a greater output force, which is said to provide leverage.“ 5 The best way to explain leverage is this simple image:
Leverage Effect

Put simply, good leverage multiplies your initial efforts and leads to a far better result.

The power of leverage doesn’t only apply to physics, but to every aspect of your life. Here are some examples of good leverage:

  • Making 1000$ from 100$.
  • Loosing 30 kilos in 6 months by working out twice a week.
  • Building a profitable business by investing 1 hour a day.

When it comes to systems thinking, the lever effect is described with the term leverage point:

“Leverage points are places within a complex system where a small shift in one thing can produce big changes in everything” 6

A great way to understand leverage points is to think about the domino-effect. The fall of one single domino brick leads to a chain-reaction and eventually triggers a big change in the whole domino system.

How To Find Leverage Points Quickly

But how can such high leverage points be found?

Basically, a notable change within a system occurs when a leverage point targets the root cause of a problem. This is only achievable by ignoring symptomatic solutions and short-term thinking.

An example of a symptomatic solution can be found in our global financial system. When our global economy slows down, central banks tend to lower interest rates to fuel growth and wealth. However, this approach only works short-term and will eventually lead to inflation and devaluation.

High leverage points can be identified by analyzing deep-rooted structures of problems. This isn’t always fun. In fact, people avoid this like the plague but wonder why they always get the same results.

As a rule of thumb: the deeper the leverage point within the iceberg model, the better the leverage point. The relation between leverage points and the iceberg-model can be found in this video:

Leverage points can be divided into different subtypes. Donella Meadows, a systems thinking legend, extracted 12 different types of leverage points, ordered by their effectiveness. An explanation of these 12 types can also be found in this Medium post.

A final note: Bottlenecks and leverage points seem to be very similar. However, bottlenecks focus on protecting the downside of a system by removing its biggest constraint. Leverage points, however, are based on positive change and creation of „limitless“ opportunity.

j) Circular Thinking

Imagine this scenario: You are the CEO of a company, facing daily problems like these:

  • How to maximize innovation?
  • How to reduce the stress of employees?
  • How to improve collaboration between sales- and development-team?

None of the problems above have an easy solution. But why exactly is that?

All of these questions can’t be analyzed in isolation or solved by following a linear step-by-step process. Rather, these are all interconnected problems which are based on ongoing circular interactions and feedback mechanisms. In other words, we are talking about dynamic, and not linear problems.

To explain this idea, let’s take a short look at the question “How to maximize innovation within a company?”.

Innovation certainly needs two things: Employees who have 1) motivation and 2) skills. Motivation creates the willingness to change, while skills are needed to put things into practice (e.g. using the newest technology).

However, pursuing both of these two things at the same time can lead to a new problem. If you force your employees to improve their skills all the time (e.g. further education), they will burn out and eventually lose motivation. So, these two factors have to be balanced out.

Linear Versus Circular Thinking

To achieve a satisfying solution for such a dynamic problem, circular thinking is needed.

Circular thinking doesn’t come naturally to most human beings. On the contrary, since childhood, we have been taught to think in a linear way.

Linear thinking deals with one single question: How do I get from point A to B as quickly and efficiently as possible?

How do I get rich? How to lose 40 pounds? How to make more friends?

Don’t get me wrong, linear thinking is absolutely necessary to get things done. However, this approach is limited because it is based on short-term maximization. Too much linear thinking will lead to exploitation and burnout, be it on an individual, local or global level.

In our current times, linear thinking doesn’t provide enough solutions to solve our deepest economic, financial, environmental and educational challenges.

Thus, we need to accept the fact that we live in an interconnected world where circular thinking is absolutely necessary to achieve regeneration, sustainability, balance and synergy effects. If you want to read more about that topic, I highly recommend this blog post about circular systems.

Feedback Loops

If you want to master circular thinking, you first need to understand the concept of feedback loops. Basically, there are only 2 kinds of feedback loops, balancing loops and reinforcing loops.

A reinforcing feedback loop reinforces previous changes within a system. This often leads to a snowball effect. A good example is the relation between success and motivation. If you have success, your motivation will increase, which will improve your success again, which makes your motivation go up again (etc).

Reinforcing Feedback Loop

Reinforcing Feedback Loop

In contrast, a balancing loop stabilizes the state of a system to achieve self-regulation. A good example of a balancing feedback loop is the relationship between stress and relaxation. If your stress level increases, there comes a point where you need relaxation, which eventually will decrease your stress again.

Balancing Feedback Loop

Balancing Feedback Loop

Great examples of feedback loops in nature can be found in this video:


Further reading on feedback loops can be found here, here and here.

Reinforcing and balancing feedback loops are not per se good or bad. While balancing loops can lead to stability within a system, reinforcing loops can accelerate growth and positive change.

However, in term of negative effects, balancing loops can lead to stagnation and rigidity. Reinforcing loops, on the other side, can lead to overload or even chaos within a system.

How Feedback Loops Affect Your Life

Assuming you understand the concept of feedback loops – how to apply them in day-to-day life?

Put simply, start to manage the feedback loops in your life.

Keep in mind that a robust system needs both:

  1. Balancing feedback loops for stability.
  2. Reinforcing loops for growth.

This applies to your job, relationships, finances, or life in general.

If you have a look at most people’s lives, they either stay the same and don’t improve (too many balancing loops) or they are overwhelmed because they do too much (too many reinforcing feedback loops).

To prevents this, have a closer look at your life areas. Where are your balancing loops? Where are your reinforcing loops? Do you have both types of feedback loops in your life?

A good balance will help you to master the Ying and Yang in life. You will be able to achieve a balance between old and new, contraction and expansion, security and adventure.

To get the ball rolling, ask yourself these questions:

How well can you handle stress and chaos (do you have stable feedback loops)?

Some Examples: Relaxation Techniques, helpful friends, working at a process-driven company, good work-life balance.

Do you have growth impulses in your life (do you have reinforcing loops)?

Some Examples: reading books, meeting new people, having passion projects, interesting colleagues.

Which balancing loops prevent change in your life? 

Some Examples: toxic friends, repeating job tasks, protective parents, laws & regulation, restrictive culture.

3. Applying Systems Thinking

This is the part where most systems thinking advice fails – putting things into practice.

If you want to apply your attained systems knowledge, there are 4 independent avenues you can go to. Ideally, you do several of these things at the same time:

a) Practicable Theory

As mentioned in the introduction, walking through life with a systems mindset is half the battle. The mere fact that you look at life from a systems perspective will give you one huge advantage:

If you can identify a system, you can improve it.

So from now on, everything in your life is a system. Your wardrobe, your desktop, your filing system, your social circle, your finances, and your job. Every new project you start is a system. Every new goal you aspire will be designed around a well-thought system.

As soon as you do this, your perspective on life will change. Where other people see chaos and randomness, you will see the potential for systems development. Everywhere in your life, you will see parts working together as an interconnected whole to achieve a shared goal.

Once you internalized the systems mindset, it’s time to personalize your theoretical knowledge from the previous chapters. Because so far, all of these ideas and concepts are rather abstract than spontaneously accessible in your day-to-day life. You need to enrich these abstract concepts by practical examples. To achieve this, re-read every chapter of this web guide and try to relate to your daily life. Here are some starting points:

Systems Mapping: Sketch out at least one system from your day to day life. Identify its environment, its parts and their interactions in the form of flow.

Basic Principles: Once you created that sketch (you did that, right?), analyze which system principles apply to this example. Look for interdependence. relationships and cycles.

Environment: Often when we experience a chaotic situation, we focus too much on the actual event. Instead, it can be very beneficial to take a step back and look at its surroundings. Consider the problem of bad nutrition for example. A change of your environment (lazy friends, party lifestyle, stress at work, inconsistent sleep rhythm) can improve your nutrition without actually changing it.

Iteration: Almost every one of us has this one business idea which never gets implemented. Oftentimes, we get paralyzed by our own huge expectations. We don’t start because we don’t know what to do first. You can easily solve this problem by applying iteration. For example, instead of building a complete software business, create a scrappy UI mockup which you show to potential customers. Instead of writing a book, just write the table of contents, show it to interested people and get valuable feedback.

b) Create & Manage Systems

There is no way around it, you need to build your own systems.

Your first practical systems thinking steps are crucial for building experience, trust, and momentum. How else can you learn this stuff?

So – how to start?

First of all, you need to find problems and activities which need systematization. This can be achieved by sharpening your view for recurring problems, inefficient processes and chaotic situations (keyword: systems mindset).

After you identified several systems opportunities, I’d recommend starting with the smallest system. Keep improving that system until it works perfectly. Once this is done, build the next largest system. As you get more systems experience under your belt, you can include other people, technology and tools. But for now, pick a small system, set a simple goal and just start.

To get your creative juices flowing, I collected systems from daily life with different difficulty levels:

Level 1 systems: Your wallet, wardrobe, refrigerator, filing system, hard disk.

Level 2 systems: Your household, nutrition, fitness, education.

Level 3 systems: Your finances, family life, job, business, professional network.

Your Refrigerator As A System

In order to fully understand what I mean, I’m going to explain the systems thinking process briefly by using a level 1 system,  your refrigerator.

This may sound like a trivial example, but given the fact that the average American household throws away 30% of his food, this system can save you more than a thousand dollars per year.

First, let’s set a simple goal. Every refrigerator in this world should:

  1. Provide fresh food
  2. Reduce waste.

Next, let’s analyze the two most common problems (keyword: events) of refrigerators:

  1. Wrong amount of food  (either too much, not enough, or wrong ingredients)
  2. Expired food (mold)

With these two problems (keyword: constraints) in mind, we need to analyze the system’s parts of the refrigerator and its related environment. This includes:

  • Refrigerator parts (food, food containers, shelves, temperature setting)
  • Your Shopping Routine (food is input)
  • Your Cooking Routine (food is output – way 1)
  • Your Snacking Routine (food is output – way 2)

Systems Thinking Example

To solve these two problems (wrong amount of food and expired food), we don’t need to focus too much on the parts of the refrigerator system, but rather on its environment. As we can see in the figure above, the food input needs to be aligned with the food output of the system. Otherwise, there will be too much or not enough food. What you buy is what you have to eat, and that needs to be within the period of a week. A possible solution could be planning your weekly meals in advance and buying ingredients accordingly.

Refining The Refrigerator System

Of course, there are many other things which could be done for further system’s improvement, but this one change will have the biggest effect on your refrigerator system (keyword – leverage point).

But, just for the sake of it, these improvements could be done also:

  • Set the perfect temperature.
  • Check your refrigerator weekly for expired food.
  • Use only transparent boxes to see molded food immediately.
  • Clean your fridge monthly.

As you have seen in this example, we didn’t use many advanced systems concepts from this web guide. We just applied basic systems mapping and used leverage points/constraints to get things going. The rest was just using common sense.

c) Analyze Systems

If you want to take your systems thinking skills to a high level, you need to become a student of the game.

Start to explore systems, from nature, history, economy, business, and technology:

Please don’t just google “systems thinking“, but rather try to analyze things from a systems perspective. Whenever you experience a complex problem, look for root causes and ask deeper questions than everyone else (hint: iceberg model).

Then, there’s another tip which may sound strange at first: Try to envision the future of a system.

Analyze any given company, social group, country, political or economical system, and derive the next 10, 50 or 100 years, based on their current dynamics, challenges, and possibilities.

d) Play Games

Believe it or not, but playing games is an awesome way to improve your systems thinking skills. Strategy games (computer and board games), which require the management of complex systems over time, are particularly suited. Take the game risk, for example, where one needs to balance stability and growth (feedback loops) and decide for the next offensive attack (leverage points). But not only that, all of these concepts have to be applied intuitively under pressure.

It is no wonder that many of today’s entrepreneurs have played video strategy games in their youth.

If you are further interested in that topic, check out these resources:

  1. 1
  2. 2
  3. 2
  4. 3
  5. 4
  6. 5