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Why You Need Systems Thinking Now

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Bansal & Birkinshaw — Why You Need Systems Thinking Now

TL;DR

Tima Bansal (Research Chair) and Julian Birkinshaw (Dean) at Ivey Business School argue that the two dominant approaches to business innovation — breakthrough thinking (“move fast and break things”) and design thinking (IDEO-style user-centric) — produce socially and environmentally dysfunctional outcomes in interconnected systems. They advocate for a third mode: systems thinking, traceable to Ludwig von Bertalanffy, Jay Forrester, and Peter Senge’s The Fifth Discipline (1990).

Based on Innovation North, a research-practice initiative at Ivey collaborating with 30+ companies on a dozen projects + numerous agile sprints, they offer a streamlined four-principle approach to applying systems thinking to “wicked problems.”

Key claims

The three modes of innovation

ModeSourceStrengthsSide effects
Breakthrough thinking”10×, winner-take-all” — Mark Zuckerberg’s “move fast and break things”Speed, technological progressCreates collateral damage (Google + privacy/IP, Uber + local taxi systems, Airbnb + housing communities)
Design thinkingSenge’s Fifth Discipline; IDEO popularization in 1990sUser-centric, cuts through complexity by focusing on the userObsessive focus on user creates knock-on problems for non-users
Systems thinkingBertalanffy, Forrester, SengeAvoids unintended consequences; embraces complexity; more sustainableSlower, harder, requires modeling interactions; “least common mode of innovation”

Why systems thinking has been rare

  • Traditional approach: model all flows, interactions, feedback loops in the system — daunting and sometimes futile in fast-changing worlds where models can’t reflect reality.
  • Systems thinkers spend time figuring out exactly how the Gordian knot is tied — almost guaranteed to be overtaken by a design thinker (slicing) or breakthrough thinker (single-strand focus).

A streamlined approach: four principles

1. Define your desired future state

  • Standard practice (design thinking, sometimes breakthrough): start with an “unarticulated need” or “job to be done.”
  • Systems thinking: articulate a North Star for the company in the future system.
  • Maple Leaf Foods example: then-CEO Michael McCain reframed the company’s purpose from “meat processor” to “the most sustainable protein company on Earth” — repositioning to adapt to insect/plant-based protein opportunities, partnering with Meat Institute on Protein PACT.
  • Cited classic: Ted Levitt, “Marketing Myopia” (HBR 1960) — railway companies failed because they thought of themselves as railway companies, not transportation companies.

2. Frame the problem, reframe it, and repeat

  • Wicked problems have no single definition; iterating reframings engages stakeholders who experience the system’s dysfunctions differently.
  • University of Guelph example: reframing climate change → soil health to engage farmers more effectively; led to Susterre Technologies’ high-pressure water seed planting.

3. Focus on flows and relationships, not products or services

  • Most innovators focus on a product/service to solve a problem; from a user’s perspective, physical objects are easier to make sense of.
  • Systems-thinking innovation may be a change to flows or relationships among actors.
  • Co-operators (Canadian insurance) example: introduced “drying in place” instead of full home rebuild after water damage — vendor-selection process embedded sustainability requirements; “soft contents” cleaning preserves sentimental items. Fundamentally improved flows/relationships within existing business system; made no new products.

4. Nudge your way forward

  • Innovation rhetoric: moon shot, silver bullet, killer app.
  • Systems-thinking innovators seek an “ecology of actions” — small experiments that reveal system insights and reach a tipping point naturally.
  • CSA Group example: instead of brainstorming a single new building standard for a circular built environment, Bansal & Birkinshaw recommended an ecology of small actions — educating architects/engineers, developing reuse standards, finding pilot funding — plus engaging a “coalition of the willing.”

When systems thinking is NOT the right tool

  • Breakthrough thinking = ideal for clearly bounded problems (rocketry); poor for wicked, ill-defined problems (US healthcare/education).
  • Design thinking = ideal for closely user-centric problems where empathy + iteration help (consumer products).
  • Systems thinking = best for wicked problems that affect arrays of stakeholders very differently.

The authors are explicit: systems thinking is a complement to the other two, not a replacement.

Methodology notes

  • Based on Innovation North initiative at Ivey — 30+ companies, 12+ large projects, numerous agile sprints.
  • Practitioner-oriented framework, not an empirical study.
  • Cases drawn from Ivey’s consulting/advisory engagements (Maple Leaf, U of Guelph, Co-operators, CSA Group).

Quotes worth saving

“Systems thinkers reframe the definition of a complex problem iteratively to motivate stakeholders who may experience a system’s dysfunctions differently.”

“Design thinking cuts through complexity by focusing primarily on the users of the product or service being designed.”

“It’s important to note that Co-operators didn’t create any new products, nor did it make huge investments. Rather, it worked creatively to improve the quality of flows and relationships within its existing business system. This is fundamental to systems thinking and differentiates it from other approaches to innovation.”

“Truly sustainable technology solutions for environmental challenges require a systems-led approach that explicitly recognizes that the benefits of an innovation in one part of the planet’s ecology may be outweighed by the harm done elsewhere.”

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