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System thinking - why you should use it?

Here in San Francisco Bay Area, we see a lot of new Indian restaurants open…and many of these close within two years of opening. We had one such restaurant in our neighborhood. It had a few reasonably tasty signature dishes and the overall service was good.

However, when we visited the same restaurant after six months, the food didn’t quite taste the same and the service was slow. And on the other hand there is an old time Indian restaurant, not too far from the above mentioned restaurant, and that seems to have been around forever.

Whenever we visit the Indian restaurant that’s been around forever, the food tastes just at it did when we first visited it five years ago. It’s the consistency in taste and service that attracts us, and possibly others too, and I can say for certain that’s one of the reasons it’s still around.

System thinking is about maintaining consistency and thus insuring repeatability and reliability of the results. So what’s probably the system in the old Indian restaurant? It’s sticking to the winning recipes year after year and having the training processes that insure the staff maintains that quick and friendly service. I can bet successful restaurants stick to system thinking even if they may not use the word.

However, for the longest time I didn’t quite understand system thinking.

When I went to business school, ‘system thinking’ was thrown around like a buzzword. I knew how cool it was as the word ’system’ in any title would mean it would sell. I knew some really ‘intelligent’ sounding system thinking models, like the STAR model. But, honestly, I never really understood it - how system thinking really made a difference, and what really is a system? If you asked me I would ramble, fumble and even tumble but never get to it…as I never really knew it!

And now, I know system is nothing a process that we follow to get consistent results every time, an algorithm, etc. A process is linear, that is it gets us from point A to point B and then stops; however, a system is cyclic, it can repeat itself to produce similar results. A recipe is a series of steps that converts raw ingredients into a tasty dish and can be repeated to get similar taste. A customer service training manual for a successful restaurant will have steps that outline how to wow and delight customers — and that manual is a system.

This device, a computer, that I’m typing this article on is a system. Your coffee maker, air conditioner, TV are systems as they give you specific results. So anything that a series of logically organized steps either in a machine or manually that can be repeated to produce same results in different situations is a system.

What are the three benefits of system thinking?

1. Maintain legacy

2. Scalability

3. Organization

1. System Thinking and maintaining legacy

If you want to leave a legacy, people will remember you for your good work then create systems. The books, works of music or art that become immortal most likely at their core use a system. Shakespeare used the ‘five act plot’ system to construct his plays. Imagine if Shakespeare had constructed his plays randomly — I bet we would not know of him today.

We may not be in the league of Shakespeare or Mozart yet, but still system thinking, is the beginning, and at the very least will set our work on to the path of greatness.

So, how can you apply system thinking to your work?

Let’s take an example of a marketing professional.

If you happen to be a marketing professional do you use system to plan and execute your work? If you are creating a presentation or an write an article, is there a system behind it or is your work random? If not, can you find some winning system based and base your work on these system?

But, how does it apply to building a legacy?

Your initial work may be amateurish, but as you continue to use and refine your system, slowly the results will begin to trickle down your work and it will start to stand apart. And eventually, it will reach a level where it gets a life of it own and impacts several people. You can’t control whether your work will become famous or you’d become famous. However, you can control if your work has impact — and system thinking does just that.

Am I using a system to write this article?

You bet, I am. My process is a five day affair — no I don’t sit and write for eight hours on test days. Instead I spread my work over several days. Day one involves coming up with the topic and then breaking it down into three sub topics and if needed into sub-sub-topics. Then I take a break and resume writing the next day. And, I use a timer to manage my energy and concentration and write for 50 minute each day. On day two, I write the opening paragraph of the article, which is usually a story and connect it to the main article using a theme of the article. On day three, I fill in the details to the topic and sub-topic. On day four I edit the article. And on day five, I create the article headline and edit it for the last time — and then I’m done. This process gives me required pauses and my brain a chance to be creative.

2. Now, let’s talk about how systems thinking results in scalability

All of us want your business to grow and serve more customers. Then we must systemize. Anything random cannot be systemized. I worked for a small software company that had only eleven paying customers at one time. When we got a new customer, we would manually built a copy of software, test it and sent it to them. However, as the company grew bigger and the number of customers increased manual work was very time consuming. So, we created scripts that handled the process of building software and sending it to the new customer. That is, we automated the process to scale to a large, theoretically, an infinite number of customers. So, the scripts was one of the systems the company used to handle a growing volume of customers.

You can also use system thinking to expand your product lines. Say you are a freelancer and want to move on from one-on-one consulting to group consulting and then hosting workshops and seminars. As a first step, you could launch a book to establish yourself as a thought leader. And once you have a book, you can move on to conducting workshops and seminars for your audience. So, you see there is a process you have to follow to move from serving one to many customers.

3. And how does system thinking help with organization and efficient?

System thinking means that you nothing can be random. If you run a small business, that means all of your functions have to be organized. Not just business functions managing your time and energy has to be systemized.

Think about your daily schedule. Can you optimize it to manage not just your time but schedule activities according to your varying energy levels throughout the day? And then can you take the thinking forward and put a system to plan and execute your work? Do you have a system to prospect a customer, a system to close the sale, a system for customer management? Do you have systems to manage accounts, hire and train employees? Sure it is a lot of cumbersome work but there are so many upsides.

The benefits of organization or systemizing is that it reduces overwhelm and frees up time to focus on the core of your business. Your business and your life begins to run smoothly and predictably. Sure, systemizing may feel as if the freedom and creativity are being restrained and there is no time to accommodate sudden events. Well, if you have a system for managing your time and energy, you can carve out time for pure creative thought (a.k.a creativity with controls) or have a dedicated time slot for handling urgent activities. You can move around activities and prioritize as the day unfolds.

So we now know why system thinking is important and is the basis for creating a legacy, scaling your business, and building an organization.

But if you haven’t yet adopted system thinking how can you go about incorporating it into your business?

1. Make every activity or aspect of your business into a process. Say accounting or customer support. Have a process or checklist of steps of things to do when an activity is performed. For example, once you have a new customer, you send a welcome email along with information on how to contact you, FAQs, any training manuals. Then you make an entry into the CRM software (or even a spreadsheet) about that customer. Their name, purchase history, billing history, their birthday, contact details, etc. And adhere to this process. And when you hire someone, then insure that they can repeat this process.

Also, how do you manage your accounts, and track your income and expenses? Do you use Quickbooks or another accounting software, or just randomly jot it down. If you spend cash, do make a manual entry. Using a system like Small Business Accounting software will automatically track your credit card for expenses you indicate are for business. Plus you can scan receipts and the software will file it properly.Similarly, for maintaining accounting. If you’ve been maintaining manual records, and want to use software to manage these records, link your credit cards to this software, and scan receipts whenever you make a purchase.

You may wonder that this is a very simplified definition of system thinking

And you are right to notice that, this article is a little too simplified take on system thinking. After all, the formal definition of system thinking (just Google ‘system thinking’ and you’ll find formal definitions and models) talk about different components of systems in different disciplines such as project management, education, sustainability, etc. And also relationships between systems such as interconnectedness, causality, etc.

So, in front of those academic and formal definitions, this article is too simplistic. However, if you notice the essence and objectives of system thinking as defined in academia and in this article is similar. And if you start to think holistically in terms of systems mentioned above in this article, you will notice a shift in your business and life - a structure and balance will start to emerge and different systems will begin to impact each other… in a positive way.

So to summarize, we’ve covered system thinking and its benefits in this article.

We also discussed how you can instill system thinking and put systems in place if you don’t have one. Doing this will make your business into a well oiled, lean, mean and capable machine that will continue to yield fabulous returns for a long time.

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