System Thinking to Run, Grow, and Transform the Business
December 11, 2020
Systems Thinking and the Organization
There are many ways to describe system thinking. We can say system thinking is a way of viewing or thinking about a system in terms of structure, patterns, cycles, and data exchanges. System thinking can also be thought of as a way of integrating a person into the organizational flows of the system or the way the organization works to make decisions. Then there is system-1 and system-2 thinking. System 1 is based on one’s experiences. System 2 is based on analytics or data. There have been studies to categorize system-1 as fast thinking and system-2 as slow thinking.
Organizations usually have an intended strategy that is budgeted to run, grow, or transform the business. The Run the Business strategy usually is aimed at fixing issues, customer wishes, and keeping the light on. The Grow strategy is usually aimed at creating competitive capabilities. The transformation of the business strategy is aimed at innovation.
The strategy is transformed into tactics and tactics into operations. Another model to consider is that strategy transforms into missions, missions to goals, and goals to objectives. Each organizational structure and person in the organization supports the objectives with projects and daily activities.
Organizational structure influences the behavior of the organization. There are different types of structures, such as hierarchical, which can include functional, divisional, and horizontal structures. There are matrix organizational structures and other types. Each structure supports behavior, data exchanges, and communication of the people in the particular roles in the structure.
Within these structures are many complexities and challenges. There is a value chain of interactions, linking the top strategy to the bottom objectives. These objectives to meet the goals have critical success factors. Each critical success factor is measured based on a system 1 approach, or a system 2 approach, or a combination of system 1 and 2.
System 1, expert opinion can be good enough for some objectives. System 2, a metric can be good enough for some objectives. The combination of both is always best.
Enablement of Decision and Data Exchanges
Data is exchanged between people and technology for accomplishing work efforts. The person or automated system transforms data for consumption. Data effectiveness strives to be done so that there are no data silos that could affect the health of the system. Work efforts across the organization need to be focused on the organization’s strategy. Data management tools should support the elimination of data silos, such as supporting the integration of data in the cloud and on-premises solutions.
Decisions are enabled with the transformation of data to information, information to knowledge, and knowledge to decisions. A decision can be made without data, such as the discussion on system-1 thinking. A decision can be made with data alone, such as with system-2 thinking. Enterprise data systems help connect the data value chains between the organization structure types with people for decision support.
Many organizations have been concerned with what is called the “graying” of the IT community—in other words, losing key decision capabilities that are in the minds of the employee who has years of experience in a particular area or from working for the company. Many of these people are sometimes hired back as consultants because of the knowledge they have. The empowerment of a data-driven enterprise system helps collect people’s knowledge and discovered knowledge for the benefit and system thinking of the organization. Important decision-making data does not get lost.
Run, Grow and Transform the Business
Day-to-day analytics captured for running the business can help experts in key customer-facing functions or areas make faster and more accurate decisions. Enterprise data analytics can be used to discover business constraints and change the business trajectory for continuous growth. Business transformation requires knowledge from a system 1 and system 2 perspective.
Enterprise data to support an overall service knowledge management system in your organization for agile, quick, empowered, trusted, and high performing decisions can only be enabled with technology. Each function and many people in the same functional structure in the organization uses different tools and processes to do their job within their service value chains. The organization’s data is the organization’s data and should be leveraged appropriately across the enterprise. To do this effectively requires the collection of analytical data from as many sources as possible, then transforming this data to appropriate information and knowledge for decision support across the organization. Using a solution like Actian DataConnect enables quick and easy design, deployment, and management across on-premises, cloud, and/or hybrid environments.
An organization that functions as a one-team with many unique, specialized capabilities and responsibilities should be enabled with analytical system 2 data to support their system 1 experience and expertise for high-performing organizational decision support. Customer insights, organizational performance, and many other valuable decisions can be made for effective and efficient running, growing, or transforming the business with a system thinking approach. Actian DataConnect enables rapid onboarding and delivers rapid time to value, and allows you to connect to virtually any data source, format, location, using any protocol. Learn more here.
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