In this podcast, Seth discusses the concept of systems thinking and why we should learn to be more aware of what is working around us so we can make things work even better.
Duncan Hines saw food safety in a restaurant was an issue and decided to do the hard work for improving the environment. He made his first fortune by licensing restaurant the right to put a sign out front of their restaurant, announcing that Duncan Hines himself had approved the restaurant.
Hines’ idea probably would not have worked earlier because the system changed. It changed because people were driving around in cars. People were going from one city to another. This created a demand for exactly what Duncan was bringing to the public. The system where there was a lack of restaurant review and the trend of people eating out more often means the system was largely responsible for Hines’ success.
Wal Mart started out seeking to be a business that has very competitive pricing. The business model of low-price was able to work mainly due to the system of container shipping.
By cutting down days and many thousands of dollars, the container shipping system enabled Wal Mart’s business model of bringing these low-priced goods from far away to consumers who wanted to pay less. Wal Mart showed up when the system needed someone like it to thrive. Wal Mart helped itself by building an organization that interfaced with the system.
Many things we interact with are part of a broader system. When we adopt systems thinking, we begin to pay attention to the relationships and connections. Amazon Web Services wants to host our electronic systems cheaper and more reliably than anyone. They understood that, by being at the center of a system of data exchange, would enable them to increase their reliability and lower their costs, for both themselves and others. Seeing the system enables us to participate as a productive member of the system.
The second idea that is related to systems thinking is this idea of slack. It is not effective to build a system that is tightly coupled without slack. Slack enables the system to be flexible and resilient against variability. Variability is not something we can always control. When the system lacks slack (or buffer) and unexpected happens, the whole system can fall apart.
To build slacks into the system effectively is to a loosely coupled system and find ways to make productive use of the buffer resources. A buffer is a cushion to avoid the emergency, because in that buffer we can focus on the long-term efforts.
What we have is the opportunity to look deeply into the systems in our lives. What we might be able to do is let ourselves off the hook just a little bit for not sprinting all day long. We’re not optimizing for a four-minute mile all the time. Instead, what we are doing is building resources and finding assets, so that when the opportunities within the system arise, we are ready for them.
Once we start looking at the connections as opposed to the individual pieces on the board, we realize that we are all part of a system that is part of many systems. Our job is to learn to see the system and to build enough slack into our interaction with the system. That way we can continue to be productive when emergency strikes.
“Systems thinking is the shortcut to creating productivity and impact.”