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System Defined
A system is an entity which maintains its
existence and functioning as a whole for some purpose through the mutual
interaction of its parts.
Systems Thinking Defined
Systems thinking is your
ability to see things as a whole (or holistically) including the many
different types of relationships between the many elements in a complex
system. "Systems thinking is a
sensibility – for the subtle interconnectedness that gives living systems
their unique character."7
The Goal of Systems Thinking
The goal of systems thinking
is to manage the rapidly growing complexity of the worlds of business and
technology.
The task of a
business architect
and a
process manager is to create systems, within a sensibly structured
business, that
empowers employees
and enables people to achieve higher productivity and greater
competitive advantage...
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The Focus of Systems Thinking
Systems thinking "focuses on
the whole, not the parts, of a complex system. It concentrates on the
interfaces and boundaries of components, on their connections and
arrangement, on the potential for holistic systems to achieve
results that are greater than the sum
of the parts. Mastering systems thinking means overcoming the major
obstacles to building the
process-managed enterprise – for every business process is a whole
system."2
Growing Demand for Systems
Thinking
"End-to-end
business processes are dynamic systems, but today's business
professionals are generally not trained in general systems thinking. Too
often constrained to a perspective limited by ingrained business practices,
rigid scripts and structured input-output work, few professionals have a
wide-angle view of, or experience dealing with, end-to-end business
processes."2
Balancing the Five Basic
Elements of Nature
The Five Basic Elements are Fire, Earth, Water,
Metal, and Wood. According to the ancient Chinese belief, those are the
basic elements of the universe and everything in our word is a compound of
the five elements. These elements are understood as different types of
energy in a state of constant interaction and flux with one another.
The most important of all is the
balance
of all five elements...
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Systems Thinking and Modern
Management
The
system approach to management is based on general
system theory – the theory that says that
to understand fully the operation of an entity, the entity must be viewed as
a system. This requires understanding the interdependence of its parts.
Systems thinking
characterizes many of the world's leading executives. It is a formal
discipline of management science that deals with
the whole business system
and in terms of the interconnections and interactions of its parts.
"Many managers fail to see
the forest for the trees. This is not an either/or problem. The trick is to
see both the forest and the trees. Systems thinking is a methodology for
doing both simultaneously. It's more than a methodology, it's like learning
a new language and takes nearly as long as learning a foreign language to
achieve maturity. The human mind is notoriously poor at predicting the
performance characteristics of multivariable systems. Systems thinking can
help. What you can train your mind to do is to look for counterintuitive
leverage points and to construct scenarios where results beyond the obvious
are possible." (Botkin, 1999)
Systems Thinking and
Cross-functional Management (CFM)
Cross-functional management (CFM)
manages business processes across the traditional boundaries of the
functional areas. In Total Quality Management
(TQM) and Kaizen, the
cross-functional goals of QCD (Quality, Cost, Delivery) are clearly defined
as superior to such line functions as planning, design, production and
sales. The positioning of cross-functional goal as superordinate ones
necessitates a new systems approach
to management, thinking and decision
making...
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The Power of Your
Cross-Functional Excellence
If you build broad cross-functional expertise,
no idea will be wasted! Your
mind can accept only those ideas that have a frame of reference with
your existing knowledge. It rejects everything else. If your knowledge is
functionally focused, you'll be open to new ideas related to your functional
expertise only and will miss all other learning and innovation
opportunities. If you develop a broad cross-functional expertise, no new
idea will be wasted. It will immediately connect with the existing knowledge
and will inspire you, energize you, and encourage your
entrepreneurial creativity.
The broader your net, the more fish you catch...
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Apply 80/20
Analysis
80/20 Analysis examines the
relationships between two sets of comparable data and can be used to
change the relationships it describes. One its use is to discover the
key causes of the relationship, the 20% of inputs that lead to 80% of
outputs, and put your resources behind the best-performing efforts. The
second main use of 80/20 Analysis is to improve the effectiveness of the
underperfroming 80% of inputs that contribute only 20% of the output.
80/20 Analysis should be applied
carefully, in a systemic way, as opposite to linear thinking that may lead
to misunderstanding of the 80/20 Principle and its potential abuses. "Don't
be seduced into thinking that the variable that everyone else is looking
at... is what really matters. This is linear thinking. The most valuable
insight from 80/20 Analysis will always come from examining non-linear
relationships that others are neglecting."11...
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Application
Value Chain
Management and Value System Analysis
Your firm's
value chain
links to the value chains of upstream
suppliers and downstream buyers. The result is a larger stream of
activities known as the value system. The development of a
competitive advantage depends not only on your firm's specific value
chain, but also on the value system of which your firm is a part.
Making
breakthrough improvements in your value chain requires
out
of the box,
cross-functional, systems thinking. You have to see the
value creation
process across the entire flow of work, not just single points...
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Complex System Rules of Thumb...
NLP Solutions...
10 Strategic Management
Schools...
Building Synergies...
Changing Mindset...
The Framework for a
Growth Strategy: 4 Rules...
Case in Point
Canon
Production System (CPS)...
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