1. Systems Thinking - a new approach for decision making

2. Juhana Huotarinen
• Gofore Plc
• Current: Advisor in Agile transformations and a
Product Owner
• Previously: Software developer, project manager,
project director & executive committee
• Twitter: @juhanaOne
• Blogs: www.linkedin.com/in/juhana-
huotarinen-16ab301
@JuhanaOne

3. Today’s menu
@JuhanaOne
Menu
- Theory part
- Practical session

4. A hot topic in the Agile world
@JuhanaOne
• Second principle ”Apply Systems Thinking”?
• 8th principle ”Systems Thinking”?
• First principle ”Adopt a systems thinking view of organizational
transformation”?
• Thinking tools for Software development are: “Lean, Agile, Queuing
Theory and Systems Thinking”?

5. Origins
@JuhanaOne
• Based on Systems Theory
• In 1958, Harvard Business Review published “Industrial
Dynamics: A Major Breakthrough for Decision Makers”
• In 1990, Peter Senge popularized systems thinking in his book
The Fifth Discipline
• Amazon listed 572 items related to ”Systems Thinking” 5/2018

6. What is a system
@JuhanaOne
Meadows DH (2008) Thinking in Systems. White River Junction, VT: Chelsea Green Publishing
” A system is a set of elements or parts that is coherently organized and
interconnected in a pattern or structure that produces a characteristic set of
behaviors, often classified as its “function” or “purpose.” A system is more than
the sum of its parts. It may exhibit adaptive, dynamic, goal-seeking, self-
preserving and sometime evolutionary behavior ”

7. Components
@JuhanaOne
Purpose
Inter
connections
Elements

8. Soccer game
@JuhanaOne

9. ELEMENTS
•Players
•Coach
•Field
•Ball
•Referee
INTERCONNECTIONS
•Rules
•Strategies
•Players’
communication
•Referee’s
communication
PURPOSE
•Win game
•Have fun
•Have exercise

10. What is systems thinking
@JuhanaOne
https://managementhelp.org/misc/defn-systemsthinking.pdf
”Systems thinking is a way to view systems from a broad perspective that
includes seeing overall structures, patterns and cycles in systems, rather than
seeing only specific events in the system”

11. System in action
@JuhanaOne
https://learnsystemsthinking.weebly.com/diagrams.html
INFLOW OUTFLOW
STOCK
FEEDBACK

12. System in action
@JuhanaOne
https://learnsystemsthinking.weebly.com/diagrams.html
CREDIT DEBIT
R
EARNING
BANK
ACCOUNT
(Paycheck) (Spending)
(Interest)

13. ELEMENTS
•Players
•Coach
•Field
•Ball
•Referee
INTERCONNECTIONS
•Rules
•Strategies
•Players’
communication
•Referee’s
communication
PURPOSE
•Win game
•Have fun
•Have exercise
More powerful, usually more hidden

14. @JuhanaOne
1. Today's problems come from yesterday's solutions
2. The harder you push, the harder the system pushes back.
3. The easy way out leads back in
4. The cure can be worse than the disease.
5. Faster is slower.
6. Cause and effect are not always closely related in time
and space
7. Small changes can produce big results
8. You can have your cake and eat it too -- but not all at once.
9. Dividing an elephant in half does not produce two small
elephants.
10.There is no blame
https://www.linkedin.com/pulse/peter-senges-11-laws-systems-thinking-ivan-luizio-magalh%C3%A3es/

15. Traditional thinking vs systems thinking
@JuhanaOne
https://personalityhacker.com/podcast-episode-0039-systems-thinking/
The team works
30% longer –what
will happen?

16. Traditional thinking vs systems thinking
@JuhanaOne
https://personalityhacker.com/podcast-episode-0039-systems-thinking/
The team is not
performing well –
what is wrong?

17. @JuhanaOne
Why Agile frameworks lean on
Systems Thinking?

18. ”80% of the systems performance potential
is found in the interactions among the
system’s parts while 20% of the total
performance of a typical system is found in
the parts themselves”
- Richard Koch
@JuhanaOne
https://www.amazon.com/80-20-Principle-Secret-Achieving/dp/0385491743

19. ”96% of organization performance is a function
of the organization’s structure. Only about 4%
of an organization’s performance is attributable
to the people - W. Edwards Deming ”
@JuhanaOne

20. 60/30/10 Rule
The team’s structure
The way you launch the team
The quality and level of team
coaching
A Theory of Team Coaching
Author(s): J. Richard Hackman and Ruth Wageman

21. 60/30/10 Rule
60 The team’s structure
30 The way you launch the team
10 The quality and level of team
coaching
A Theory of Team Coaching
Author(s): J. Richard Hackman and Ruth Wageman

22. @JuhanaOne
Behaviour over time diagrams
Root cause analysis
Cause-and-effect diagrams
System archetypes
Causal loop diagrams
https://thesystemsthinker.com/wp-content/uploads/2016/03/Systems-Thinking-Tools-TRST01E.pdf

23. When to apply?
• To gain understanding of a
complex situation
• To gain sufficient understanding
to make predictions of future
system behaviour
• To solve a problem
• To create a new system
@JuhanaOne
https://www.burgehugheswalsh.co.uk/Uploaded/1/Docume
nts/What-is-Systems-Thinking.pdf

24. @JuhanaOne
”The point is not merely to
understand the world, but to
change it” - Karl Marx

25. @JuhanaOne
”The point is to understand the
world, and then change it”

26. Practical session

27. Causal loop
diagrams
• Designed to visualise the ongoing
dynamic interaction between
elements in a system
• Consist of variables connected by
causal links with polarities and
delays
• Together, these create feedback
loops
@JuhanaOne

28. Goals
• People, organisations,
departments, and systems have
goals
• Goals often generate pressure for
people to react (or act), with the
intent of achieving the goal
@JuhanaOne
20% more social
media interactions
To get 200 website
referrals and 25 leads
from LinkedIn
To make 5 referral
sales totalling
500,000 e
Increased website
visits and leads

29. Variables
• The key elements that are closely
related to the system
• Are things, actions or feelings
(nouns)
• Can be measured
• Quantities can vary over time
@JuhanaOne
HEALTHCARE DELIVERY
Waiting list
Waiting time
Admission rate
Patients in the hospital
Hospital capacity
Capacity utilization
Duration of treatment
Medical opinion
New referrals

30. Causal links
• Represent a connection or a relation
between the two variables
• Variable must has an effect on another
• Positive polarity
• Two variables move in the same direction
• Births  population
• Negative polarity
• Two variables move in the opposite direction
• Deaths  population
• Sometimes there is a delay in the
connection
@JuhanaOne

31. Feedback loops
• When one variable leads to a change in
another variable that eventually leads
to a change in the original variable
• Positive feedback loop
• Changes reinforces the initial change
• Rapid growth or collapse
• Bank account and interest earned
• Negative feedback loop
• Changes balances the initial change
• The harder the push, the harder the system
pushes back
• Goal-seeking
• Body temperature and sweating
@JuhanaOne
https://systemsandus.com/2012/08/15/learn-to-read-clds/
+
+ +

32. Before we start
• Use nouns (as elements)
• Correlation vs causal
• If there are too many variables, try
to bundle them
• If a link between two variables is
not clear, modify variables or add an
intermediate variable
• Long-term and short-term
consequences almost always differs
• Keep the model as simple as
possible
@JuhanaOne
https://thesystemsthinker.com/guidelines-for-drawing-causal-loop-diagrams-2/

33. Exercise
1. Your software project has reached the halfway milestone
2. A new program lead just started last week
3. He has lot of new ideas
4. New ideas are attached on the wall
5. The group will select one idea ( 3-4 members in one group)
6. The group design a causal loop diagram
 Goal is to understand consequences with help of System Thinking
@JuhanaOne

34. • Decision: team members work in multiple projects at the same time
(shared recourse)
• Decision: Story points are used as performance metric
• Decision: a specialized testing team is created
• Decision: Retrospectives are skipped because of the tight schedule
• Decision: The Project is late. More team members are added to the
project
• Decision: Critical bugs are not fixed right away, instead bugs added to
the backlog
@JuhanaOne