This document discusses systems thinking and key concepts related to systems. It defines systems thinking as the cognitive process of studying and understanding systems of any kind by examining the linkages and interactions between interconnected components. A system is defined as a set of elements organized in a structure that produces characteristic behaviors. Key components of systems include elements, interconnections, and function. The document contrasts System 1 and System 2 thinking and provides examples. It emphasizes that systems thinking is needed to address problems created by more simplistic levels of thinking.

1. Systems Thinking
Prepared by:
Arindam Bhattacharjee
Research Intern at IIM Kozhikode
MBA 1st year, NIT Rourkela

2. Definition
Systems
Thinking
Cognitive process of
studying and
understanding systems
of every kind.
The focus is integrating
information from
different sources and
different types.
Examines the linkages
and interactions
between the
components that
comprise the entirety
of that defined system.

3. What is a System?
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.” (Donella Meadows)

4. Components of a System
Elements
Inter-
connections
Function

5. Elements
Elements
• Typically the most obvious
part of a dynamic system.
• Changing elements often has
very little effect on the system.
Image Source: Armchair GM

6. Interconnections
Inter-
connections
• Often involve the flow of
information.
• Changing relationships usually
changes system behavior.
Image Source: Creative Commons by ~IconTexto

7. Function
• Typically the least obvious part
of a dynamic system.
• A change in purpose changes a
system profoundly.
Image Source: Antique Radios
Function

8. Systems: Key Points
• A system is more than the sum of its parts.
• Many of the interconnections in systems operate through the
flow of information.
• The least obvious part of the system, its function or purpose, is
often the most crucial determinate of the system’s behavior.
• System structure is the source of system behavior. System
behavior reveals itself as a series of events over time.

9. Tenets of systems thinking
Interdependence
of objects and
their attributes
Holistic
approach
Goal seeking
Inputs and
outputs
Transformation
of inputs to
outputs

10. Tenets of systems thinking
Entropy Regulation Hierarchy
Differentiation
Convergence
and
divergence

11. Systems Thinking Diagram
Source: Wikipedia

12. System 1 vs System 2 Thinking

13. System 1 vs System 2 Thinking
• System 1 and System 2 are two distinct modes of decision
making:
• System 1 is an automatic, fast and often unconscious way of
thinking. It is autonomous and efficient, requiring little energy
or attention, but is prone to biases and systematic errors.
• System 2 is an effortful, slow and controlled way of thinking. It
requires energy and can’t work without attention but, once
engaged, it has the ability to filter the instincts of System 1.

14. Examples of System 2 Thinking
• How would you decide :
• Which college to attend?
• Which house to buy? or
• Whether to change careers?
• These are the types of decisions that engage System 2. They
require attention and slow, effortful, considered responses.

15. Examples of System 1 Thinking
• How would you decide:
• Which seat to take in a waiting room?
• Which chicken dish to buy? or
• Whether to change sketch pen colors?
• System 1 is capable of making quick decisions, based on very
little information.

16. Thinking in Systems
“The problems we have
created in the world today will
not be solved by the level of
thinking that created them.”
--Albert Einstein
Image Source: Flickr Creative Commons, by mansionwb

18. Image Source: Waters Foundation

19. Image Source: Waters Foundation

20. Image Source: Waters Foundation

21. Image Source: Waters Foundation

22. Image Source: Waters Foundation

23. Image Source: Waters Foundation

24. Image Source: Waters Foundation

25. Image Source: Waters Foundation

26. Image Source: Waters Foundation

27. Image Source: Waters Foundation

28. Image Source: Waters Foundation

29. Image Source: Waters Foundation

30. Image Source: Waters Foundation

31. Systems Thinking Model

32. Modeling Influenza

33. Conclusion
•The leadership challenge is accentuated by the realization that for every
legitimate, official or consciously designed system (which is intended to be and is
supposedly rational) there is a shadow system. The shadow system is where all the
non-rational issues reside; e.g. politics, trust, hopes, ambitions, greed, favors,
power struggles, etc.
•The system can confuse, overpower, block, and fail leadership. But leadership can
fail the system. A major failure of leadership within, across or down an
organization is referred to as ‘systemic’.
•Here systems thinking can go a long way to mitigate problems.

34. References
http://www.systemicleadershipinstitute.org/systemic-
leadership/theories/basic-principles-of-systems-thinking-as-applied-to-
management-and-leadership-2/, accessed on 20th May 2017.
www.wikipedia.com, https://en.wikipedia.org/wiki/Systems_thinking,
accessed on 20th May 2017.
http://upfrontanalytics.com/market-research-system-1-vs-system-2-
decision-making/, accessed on 20th May 2017.
www.slideshare.com, https://www.slideshare.net/pwoessner/systems-
thinking-lli2012, accessed on 20th May 2017.

35. THANKS