How is systems thinking applied to organization

Complexity management

Using systematic thinking to use crises as opportunities for growth

Dr. Margret Richter

The world is in the middle of a financial and economic crisis. Banks are collapsing. Companies go bankrupt. Orders collapse. Economic stimulus packages are intended to help overcome the crisis. They can only have a supportive effect if the problems are tackled at their roots.

At its core, the crisis is not a monetary problem. The cause of the global economic crisis are serious deficiencies in corporate management. Errors in the management and regulation of companies and organizations have led to the crisis. The health system has also been in crisis for years. Reform after reform cures symptoms, shifts problems from one sector to another. Nobody has an overview of the effects the interventions have on the different areas of the system. The global economic crisis is an expression of a multimorbid overall social system in which there has been incorrect control and regulation for a long time. It cannot cope with the rapidly increasing complexity.

Systems thinking with cybernetics is necessary to manage complexity. This is a way of thinking in contexts that is based on the structure of organized systems and their special dynamics. It provides methods and instruments for the optimal control and regulation of complex systems.

The increasing complexity with its strong networking, dynamism, unmanageability and limited controllability has led to the crises that we have to overcome. It shows that the regulatory and control systems have failed because they are out of date and not suitable for dealing with complex systems. Key words for understanding the crisis are complexity, system and management in the sense of taxes and rules. Complex problems are still mainly handled with linear methods and instruments, which are good for complex systems and useless for complex systems. Here only systematic thinking helps us with thinking in circular causal chains and observing and using the laws of complex systems.

Complicated is not always complex

Complex systems like an organization, a company or the national economy are like complicated, characterized by many, strongly linked system elements. The difference between complex and complicated systems lies in the fact that the system elements and their relationships change over time. It is precisely this dynamic that requires different control and regulation methods and instruments when dealing with complex systems than when dealing with complicated systems.

A complex system behaves completely differently from its parts. It has a life of its own. An intervention in one place propagates and affects the whole system. It has extremely complex consequences such as feedback, time delays and long-term effects. The current global economic crisis shows that very clearly. Although perfectly planned on its own, the interactions triggered by an intervention in a complex system can cause chaos. Nobody can play through the consequences of an intervention in a complex system in their heads. Knowing these, however, is extremely important for the efficient control of economic and social systems as well as for adapting to changes and for the development of the systems. Complex systems can be controlled to a limited extent because of their dynamics and must be constantly monitored. But they can be directed if their laws are observed.

The behavior of a complicated system, on the other hand, is deterministic and calculable. A complicated problem is solved the Descartesian way: You break it down into sub-problems and solve them individually.

Solutions to complicated systems cannot solve complex problems

This method contributed to the crisis as it is mistakenly applied in companies and organizations to also handle complex problems. Cutting-edge thinking with profit maximization is still seen as the ultimate goal. With shareholder value and value creation strategies, it is part of a mechanistic way of thinking that has little chance of survival in a highly complex world.

In a complex world, systems thinking with cybernetics is required, in which strengthening viability is the primary goal. The aim is to optimize the overall system and raise it to a higher level and to structure, control and regulate it in such a way that it is flexible, adaptable, capable of learning and development and that retains its identity despite its high complexity.

The most successful company in the world works with the principles of complex systems

Einstein already said that you cannot solve a problem with the means that created it. The solution to the crisis are the methods and instruments that are based on the laws of complex systems. You come from the most successful company in the world. This is nature. She knows no crises, no debts and no unemployed and has been working very efficiently for millions of years.

Anyone who knows the laws of complex systems can still solve seemingly hopeless problems in innovative ways and use the crisis as an opportunity for growth.

 

Complexity is often equated with difficult handling. Everything new is unfamiliar and needs to be trained. You can train in my consultations, workshops and seminars. You are welcome to contact me: [email protected] and visit me on my homepage www.solidia.de.


 

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