Systems Thinking
In the early days of my career I remember reflecting on a presentation some junior colleagues and I had just given to an executive audience. We were dismayed by the apparently simplistic frame they had imposed on our discussion. It seemed they were looking for stick figures and sand castles while we were discussing silhouettes and sculpture. It was a moment of petty empowerment as we contrasted our subtler grasp of the issues with their allegedly superficial concerns.
Over time I came to see the naiveté of that early-career perspective. I realized I had been stuck in a subsystem while these executives had been assessing the system as a whole. They had a deeper understanding of the most relevant inputs and outputs, and their questions had kept us focused on these specific things.
As more areas of our working lives become complex and confusing, systems thinking has emerged as an essential meta-skill. When you watch capable leaders in action, you often see evidence of this skill being applied in various ways.
The other day, for example, someone asked LinkedIn's CEO, Ryan Roslansky, how he maintains a work-life balance. That was a systems question, because the challenge of balancing one's personal and professional commitments involves an elaborate web of interconnected responsibilities.
A conventional answer might have detailed all the areas of his personal life that are important to him and why. Then he might have described the most stimulating aspects of his job, and what this implies for his schedule. He might have concluded by saying it's a constant struggle to honor both dimensions, but by golly he tries.
This was not his answer, however. Instead, he demonstrated systems thinking by immediately isolating the key inputs and outputs. He said he maintains a non-negotiable commitment to driving his kids to school and having dinner with them each day (input). He also keeps track of how excited he feels going to work and coming home to dinner (output).
Systems thinkers see the world as a collection of feedback processes. They have an intuitive feel for the relative strength and importance of loops within the system. The most effective leaders have a clear sense of the 1-3 inputs and outputs that matter most at any given time.
Corporate finance boils everything down to free cash flow. Operations science is perpetually on the lookout for one limiting variable, the roaming bottleneck. Venture Capitalists want to understand the 3-5 key results that drive an overarching objective for each portfolio company.
For most people, this mental exercise is deeply unnatural. It's extremely hard to grasp, let alone process, a disparate range of variables. Just as importantly, complexity creates the illusion of control, while simplicity feels difficult to distinguish from incompetence. People fear that to include the few is to neglect the many.
The second point is fundamentally a perspective problem. We know a tremendous amount about how the world works, but not nearly enough. Our knowledge is amazing, but our ignorance is even more so. The discipline of isolating the critical few measures is a forcing function that requires us to separate the signal from the noise in a system.
In this sense, systems thinking is the mother of strategic thinking. As Stripe and Google executive Claire Hughes has written, "strategy should hurt." Making trade-offs with your time and resources should be painful and disappointing, because there's no such thing as a strong strategy that prioritizes everything at once.
It's a type of hurt that becomes manageable with a systems-based perspective.