As the founder of an EdTech start-up, Heena and her team had built software that delivered CAT training courses to management aspirants. Heena was strong on the tech side, but in other aspects of the business, she needed help. After a string of staff exits, Heena hired a Chief Operating Officer (COO) with a strong grasp of systems thinking who could take over the operational aspects of the business.
Systems thinking is an umbrella term for the process of understanding, influencing and designing systems as an interdependent whole. It’s a term often used in fields like technology development, organizational design and management. In all these areas, systems thinking can help us understand how different components of a system interact with one another or affect the system.
What Is A Systems Approach to Management?
Before we get into systems thinking examples in the workplace, let’s understand what a systems approach entails.
Like the human body, ecological systems such as the global climate or air quality, for example, can appear simple at first glance. However, even minor changes in one part of a system can impact another part of the system. In a business, systems thinking helps us take a holistic approach to our work by accounting for this interconnectedness.
Here are a few ways a systems approach can help your business:
It can help us decide about what products or services we should produce, what processes we should follow, which people to hire or promote and so on. In an example of systems approach, knowledge of the operation isn’t centralized but spread out across the organization. Management decisions are made by integrating information from across the organization, which can lead to better decisions.
A systems approach offers more opportunities for creative problem solving within an organization. Cross-functional teams can come together to analyze a problem, look at the different parts and come up with better and more sustainable management practices.
It gives leaders a deeper understanding of their own role. It can change how an organization’s leaders and employees interact with one another and how they think about themselves and their work.
A systems approach is a broad philosophical framework for organizations and structures that accommodates other business management theories and best practices.
Example Of Systems Approach
The systems theory can apply to any problem in any organization. Let’s explore a few systems thinking examples in the workplace:
Example Of Systems Theory #1: Clean Water Supply
In India, an example of systems approach to management can be seen in a village in Rajasthan.
A non-governmental organization Tarun Bharat Sangh created a system that sought to clean up an entire village’s water supply. They first identified the obstacles to villagers using a simple filtration device to purify their water, including a lack of awareness about the importance of clean water, improper storage and a lack of access to the filtering device. Then, the organization developed strategies to overcome them. The NGO distributed information about the importance of filtering water and created a system for educating villagers on how to use the filters properly. As a result, more families began using their filters regularly.
Example Of Systems Theory #2: Employee Commitment
In the global IT firm SAS, they used systems thinking approach to make the organization more sustainable and balance the needs of its employees with those of the business.
SAS responded to news of industry-wide layoffs in the wake of the 2008 recession by announcing that the jobs of its 13,000 employees around the world were safe. While it would have been easy to tread the same path as its competitors, it doubled down on its people-first policy. It asked its teams to cut other costs where possible, knowing that their jobs were secure. The result was higher than ever profits the following year. It’s an example of systems approach helping an organization overall through an intervention in one specific area.
We’ve looked at some examples of systems approach to management and how it can help in various business scenarios. You can learn about this and other approaches to tackling business challenges head-on in Harappa’s Structuring Problems course. Our course will teach you how to break down any problem into small, manageable tasks in order to work through them systematically. Problem-solving is a core soft skill that’ll help no matter what your career. Equip yourself today to become an effective problem solver.
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