The Systems Thinking Approach to Business Process Management
Systems thinking is an approach to integration that is based on the belief that the component parts of a system will act differently when isolated from the systems environment or other parts of the system. It is about seeing “wholes”, the interrelationships rather than things, and seeing patterns of change rather than static snapshots.
Concept of a Process
Organizations deliver products and services to customers and clients. Amazon delivers what seems like an endless supply of goods, Google Maps delivers restaurant reviews, YouTube delivers videos, Tesla delivers cars, and the Mayo Clinic delivers healthcare. Each and every one of these companies deliver products and services. They exist for no other reason.
How do they deliver these products and services? They are delivered through processes.
A process transforms inputs to outputs. As an example, let's consider that inputs to Amazon are products such as books and clothes. A process receives and stores those. Orders are then filled by another process. The goods are then delivered to the customer and represent the output of the process.
Even the production of original films by Netflix can be visualized as a process. Inputs include scripts, funds, actors and actresses, the crew, editors, music, and promotion. The process includes such activities as choosing a script, hiring actors and actresses, choosing locations, shooting scenes, editing the footage, and developing a marketing plan. The outputs include the finished film and revenue.
It is fair to say that every product or service is delivered through a process.
“The biggest cost of poor quality is when your customer buys it from someone else because they don’t like yours.”
Describing Process Inputs and Outcomes
We can describe the concept of a process in a related but somewhat different way.
Consider a process with a single input. It can be expressed as:
Y=f(x)
The "Y" represents the process output, and the "x" represents the process input.
Using mathematical terminology, we say that Y is a function of x. So, the value of Y depends upon the value of x. Simply stated, output depends on inputs.
Relationships and Systems
But in reality, there may be several inputs. It would therefore be appropriate to describe a process with two inputs such as:
Y=f(x1, x2)
Or five inputs as:
Y=f(x1, x2, x3, x4, x5)
By describing a process in this way, the focus is directed to the relationship between inputs, processes, and outputs. We visualize it as a system. To say it in another way, systems thinking is encouraged in contrast to a view of a system as a set of separate and independent factors.
Six Components of a System Thinking Framework
Systems thinking can be broken down in a simple framework with six components. Using this framework creates a system mindset that helps you think critically and creatively about how your company can solve problems in your unique, complex environment.
The six elements of the framework are:
Interconnectedness
Synthesis
Emergence
Feedback Loops
Causality
Systems Mapping
Interconnectedness
Disconnection is the lack of awareness that parts of a system need each other to function. It occurs when the supply chain system functions independently of the assembly process and the assembly process functions independently of the marketing process. It occurs when the imaging department at a hospital functions independently of the emergency department, for example.
Interconnectedness, on the other hand, is the recognition that one part of the system needs the other parts to function. When the imaging department works together with the emergency department, minutes can be saved when a patient shows stroke symptoms. These minutes can make the difference between complete recovery and very serious consequences including weakness and paralysis.
The fundamental principle of this interconnectedness is that everything is interconnected.
Consider the full range of interconnectedness in an organization. The decisions made in product design affect the supply chain, which then affects inventory decisions, which then affects customer service decisions, and which then affects marketing decisions, and which finally affects customer value in sales.
So by focusing on interconnectedness, the organization can be seen as a collection of related components.
Synthesis
When analyzing a system, we tend to break that system into manageable pieces or components and examine each one separately. We look at each web page, each product component, or each test that patients undergo as they proceed through an emergency department.
But synthesis is the process of combining these pieces and creating something new. Through synthesis we begin to recognize the complexity of the whole and the role that each piece plays in contributing to that whole.
So synthesis also involves an awareness of interconnectedness.
Emergence
From a systems perspective, we know that larger things emerge from smaller parts. Emergence is the natural outcome of things coming together.
Without the freedom to emerge and without the effort to enable interconnectedness, silos often emerge. They emerge when parts of a system fail to interact with one another. So, marketing may fail to interact with manufacturing and then fail to interact with customer service. Unless these connections emerge, the ability to create effective processes can be significantly constrained.
In short, we can say that a systems thinking approach encourages the emergence of new ways of looking at old problems.
Feedback Loops
Because all parts of a system are interconnected, there needs to be some formal mechanism to connect them.
This mechanism is called feedback, of which there are two types: reinforcing and adjusting.
Reinforcing feedback is not necessarily good. For example, it may simply reinforce questionable process steps or reinforce a culture of less than desirable behavior.
More appropriate is adjusting or balancing reinforcement where the feedback from the process is used to ensure that the process is meeting its intended goals. If not, the feedback is used to improve output performance.
Causality
Causality is the concept of understanding feedback loops and how one action precipitates other events in a dynamic and constantly evolving system.
It is understanding how an increase in price may affect sales, how changes in a website may affect the number of sessions and pageviews, or how appointment reminders sent to patients may affect on-time appointment arrivals.
But above all it is a concept that encourages process improvement teams to continually ask why until the root cause of a problem is uncovered.
Systems Mapping
Systems mapping, a visual tool, is used to identify and map the elements of things within a complex system. It helps understand how these things interconnect and relate to one another and is a tool that can lead to important insights that often change the way we look at a system.
The ability to visualize flows and map systems is a critical skill in process improvement. Not only does it capture the flow of units or people through a process, but since it is visual, it is often very effective at helping other stakeholders understand process complexity.
Among the most important mapping tools, perhaps the most important tool, is the Value Stream Map.
Boundaries
If we consider large systems and the interconnectedness between their elements, the complexity of what we see can be overwhelming.
Sometimes it makes sense to establish boundaries and include only those elements that are most important. In other words, we try to simplify complexity while not sacrificing the essence of the problem that must be addressed.
For example, consider an assembly process for lawn mowers. If we look at the entire system, we would have to include the supply chain that provides the individual parts, the assembly process, quality control, marketing, and customer service.
Here is the important point, it might be necessary to set boundaries on a process improvement project and to focus on just the assembly process or even part of the assembly process. Depending upon the circumstances, boundaries may be necessary.
