System thinking (also known as systems thinking) provides a structured, proven approach and road map to improved performance and sustainable competitiveness. System thinking is simultaneously a framework, a discipline, and a set of tools used to address dynamically complex situations.
Our organizations, sectors, and global economy are dynamically complex in their nature and design.
System thinking transforms thinking and behaviours. It is applicable to any organization. Wherever a product or service is delivered to a customer through the interaction of multiple resources (people, equipment,materials, computer systems, etc.), system thinking can and should be applied. It has application across all sectors, public or private, including health care, education, government, manufacturing, financial services, logistics, distribution, warehousing, etc. System thinking is not cost cutting. System thinking focuses on aligning and synchronizing all resources in an organization to improve customer value delivery.
Focusing on improving customer value is proactive and progressive. Customers pay for value, and every action the organization takes that does not create value is waste (cost).
System thinking focuses on understanding the interactions between and among system resources toward delivering customer value. How well or poorly resources interact and work together in delivering customer value determines system uniqueness and performance. If we want to improve
system performance in delivering customer value, we must focus on improving the interaction of resources toward delivering that value. We must un-learn the conventional cost-based approach to managing our organizations.
The reality is that we have been employing the cost approach for decades, while productivity, profits and competitiveness continues to falter. When effectively applied, the outcomes of system thinking include improved productivity, improved customer value delivery, improved system velocity and responsiveness, the elimination of wasteful activities, lower system costs, and improved operational and financial performance and competitiveness.