Life

Unveiling the Power of Systems Thinking in Business: Unraveling Complexities for Strategic Success

I once discovered a phenomenon during monthly company meetings. When senior executives report to their bosses on their work summary for the previous month, the points they report are often scattered and their thinking is chaotic. It seems that there is a lot to say, but it is always difficult to formulate a summary. A complete system.

The boss is also aware of this situation, and he constantly emphasizes to senior executives that thinking must be systematic and expressions must be clear. For example, if a problem arises, it cannot be solved based on this problem, but solved systematically.

We have heard many similar words like this in the past, such as
1. I hope that everyone will stop looking for headaches and foot pains, and think and solve problems systematically;
2. This problem is very complex and is a systemic problem, not a problem of any one department;
3. This person is not very systematic in thinking about problems.

So the question is, since we all know that systems thinking is important, what exactly is systems thinking in business?

1 What is systems thinking?

System thinking is to regard the object of cognition as a system and comprehensively examine the object of cognition from the interconnection and interaction between system and elements, elements and elements, system and environment.

To put it simply, it means thinking about things comprehensively, not just discussing the matter, and seeing the forest for the trees.

Let’s give an example. One day, you feel very tired and sleepy, so you buy a cup of coffee to refresh yourself, and the effect is very good; the next time you feel sleepy again, you will buy another cup of coffee, but as time accumulates, the refreshing effect of coffee becomes more and more It’s getting worse. So, you need to drink two glasses, three glasses, or even more. Coffee can be refreshing, but the relationship between the two is not linear.

At the same time, drinking too much coffee may lead to a poor night’s sleep and further cause problems with your health, which will make you tired more easily. You see, if we start from the key point that coffee can refresh ourselves, we can solve the problem of fatigue. As we often say: “Treat the head when it has a headache, and treat the foot when it hurts.” In fact, our body is a large balance system.

From a short-term perspective, coffee can refresh you, but in the long-term, or from a systemic perspective, what you need is better rest, a healthier diet, a more stable mood, etc. The key is that any single solution cannot completely solve the problem, and may even bring about a series of other problems. This is the importance of systems thinking.

I believe everyone should have heard of the butterfly effect.

The butterfly effect was proposed by meteorologist Lorenz in 1963. The general idea is: A butterfly in the Amazon rainforest in South America, flapping its wings occasionally, may cause a tornado in Texas in two weeks.

The reason is that the movement of the butterfly’s wings causes changes in the air system around it and causes the generation of weak airflow, which in turn causes corresponding changes in the air or other systems around it, thus causing a chain reaction. Ultimately leading to drastic changes in other systems.

This effect shows that the results of the development of things are extremely sensitive to initial conditions. A very small deviation from the initial conditions will cause a huge difference in the results.

The “butterfly effect” is used in sociology circles to explain: a bad and tiny mechanism, if not guided and adjusted in time, will bring great harm to society, jokingly called a “tornado” or “storm” ; a good A tiny mechanism, as long as it is guided correctly, will produce a sensational effect, or a “revolution” after a period of hard work .

Therefore, a small action in a large system is likely to cause a series of chain reactions in the entire system. In this case, people with systematic thinking have the ability to see through the phenomenon and see the essence. ability.

Because things do not exist in isolation, but are interconnected and interconnected. Only by understanding the internal operating rules and development direction of the system and grasping the essence of things can we have a clear understanding of things and become masters in controlling the overall situation.

The essence of the difference between masters and ordinary people is not due to hard work or choice, but due to different modes of thinking. Many people think that choice is very important, but if a person without a strong thinking model gets a “pie from the sky” today , he may not think that it is a “pie” , but instead think that it is a “pit . ”

So, since systems thinking is so powerful, everyone desires to have a set of systems thinking, but why is the reality that less than 0.1% of people have it? Why is it so difficult for ordinary people to have it? What are the undisclosed factors behind it?

2 Why ordinary people don’t have systematic thinking

I summarize it in three points.

1. Without professional and deliberate practice

Deliberate practice is a kind of purposeful practice, which includes four parts:

① Define a clear and specific goal and take small steps to achieve a thousand miles;

②Stay focused and focus all your attention on your task;

③Feedback is needed. Feedback will help you figure out where you are lacking and how far you are from your goal;

④ Get out of your comfort zone. You can never make progress unless you get out of your comfort zone.

The core of this is to get out of the comfort zone . Although it is only a few words, it contains great wisdom. People who are unwilling to step out of the comfort zone are like boiling frogs in warm water. They are destined to have difficulty in having an extraordinary life and are destined to live an ordinary life. human life.

Therefore, the reason why it is difficult for ordinary people to become true masters is that ordinary people easily give up when encountering difficulties and find various reasons and excuses for themselves.

But the masters practice deliberately and insist on doing difficult and correct things. This is a huge difference!

At the same time, purposeful and deliberate practice affects the brain and changes its ability to adapt.

①The brain is like a muscle, it gets bigger the more you practice it. Scientists studying the nervous system at the University of London used magnetic resonance imaging to find that the thickness of the hippocampus in the taxi driver’s brain was larger than that of normal experimental subjects; at the same time, the taxi driver’s hippocampus was also significantly larger than that of the bus driver (the bus driver repeatedly walked a line);

②The brain has unlimited adaptability. For example: for people with normal vision, the visual cortex only lights up when processing information from both eyes; while when a blind person touches Braille with his hand, the visual cortex lights up;

③ Step out of the comfort zone “appropriately”. The greater the challenge, the greater the changes in the brain.

2. Never stand in the team of experts.

A person with strong thinking often has good results, and many times our weak thinking has a lot to do with the circle we are in.

For a person who only thinks in one point every day, his colleagues around him must also think in one point;

For a person with a monthly income of 2,000 yuan, most of his friends also earn around 2,000 yuan a month;

A person with an annual salary of 1 million will find that the majority of people around him have an annual salary of 1 million;

For people who borrow money from everywhere to pay off their credit cards every month, many of their friends are on the verge of financial crisis.

Jimmy Rohn said that you are the average of the five people you interact with most. There is also an old saying in China, which goes like this: “Birds of a feather flock together, and people are divided into groups; those who are close to vermillion are red, and those who are close to ink are black.” It’s really hard not to be affected by the environment around you.

In 1898, Norman Triplett conducted a study in which he measured the time it took a group of cyclists to circle a track together, as well as the time it took them to do so individually. He found that every time he measured the structure, it was faster when everyone rode together. Later, this experiment was repeatedly applied to all walks of life, and the results proved one thing. The people around you play an important role, and the environment determines everything.

We all know the Matthew effect of “the strong always become strong”: to everyone who has some, more will be given to him, so that he will have more than enough. From those who do not have it, even what they have will be taken away. –“Gospel of Matthew”

Regarding the impact of the environment on people, it is also consistent with the Matthew effect to a certain extent.

Because excellent people are excellent, more excellent people will gather around them; when excellent people gather, they will become even better together, creating a virtuous cycle. Therefore, we must take the initiative to make choices and go to an environment where outstanding people gather. This will subtly help our own growth.

However, the most critical thing in this process is not the environment or the outstanding people around you, but whether you can continue to make progress and keep up with the footsteps of outstanding people. Otherwise, there will be no people who are excellent and motivated at the beginning but then become mediocre and degenerate.

Therefore, even if you are now among a group of outstanding and proactive people, it does not mean that you can relax and feel that you can become outstanding with everyone without having to pay anything.

Whether it is becoming good or continuing to be good, it is never a once and for all thing.

3. Failure to develop good study habits

Today, it can be said that it is an era of knowledge explosion. Various audio and video platforms have emerged one after another, such as Himalaya, Lizhi Micro Class, Get, Fan Deng, Chaos, etc. Everyone can learn more or less from them. Some valuable content, but after studying it, I found that it is still difficult to organize it into a system.

The essential reason for this is that we used fragmented learning in the past. Fragmented learning refers to a learning method that uses diversified learning media, fragmented time and distributed space to learn fragmented knowledge content based on self-learning needs, thereby improving one’s knowledge capabilities.

However, fragmented learning can easily make people forget what they have learned before, especially in this era of paying for knowledge. Therefore, systematic learning is particularly important. Systematic learning is a series of analysis and thinking on the fragmented knowledge. , a learning method for in-depth understanding, memory, etc.

If fragmented learning is like thin threads, then systematic learning is like a cloth woven by these threads, connecting these threads to make it more solid and reliable.

Therefore, if we cannot develop good study habits, excellent thinking will never belong to us.

I hope everyone can reflect on themselves from these three points and start to break through their own cognition in a real sense.

3 What are the three elements of a system?

Any system is composed of three elements: elements, connections (relationships), and functions (goals) . You can also divide it into three levels. The lowest level is various elements, and the upper level is the relationship network composed of elements. , and the top level is the goals and functions of the system.

The function here mainly refers to non-human systems. For example, a building is a system, and its function is to be provided for human beings to live and use. The goal mainly refers to systems related to humans, such as a sports team is a system, and its function is to provide human beings with the ability to live and use. The aim is to win games and so on.

In a system, the elements are the most obvious, while the relationships and goals are not obvious, but they are crucial and even decisive.

The world’s most expensive sports car “Bugatti Veyron” is worth US$2.5 million and weighs less than two tons. If calculated based on physical mass, the value per kilogram is approximately US$1,300. Although it is not as expensive as gold at US$50,000 per kilogram, it is still much more expensive than silver at US$1,000 per kilogram.

However, in reality, if we take any one kilogram of these parts, we can’t do anything and it is meaningless. If one day you drive a Bugatti Veyron and crash into a tree, no one is injured, but the car is smashed into a pile of parts, its $2.5 million value as a luxury car has been wiped out. Because although the parts are there, the connections and relationships between the parts are no longer there, and the value of a luxury car composed of these connections no longer exists.

For a Bugatti Veyron, it is a system: the elements are parts, and the combination of parts, the structure of the car is the connection. The elements and connections of any car are actually the same, and let a Bugatti Veyron and a What distinguishes an ordinary car is its value as a whole, or its role and function.

The function here is of course not driving. In addition to providing us with the ultimate driving experience, its functions also include that it is also a symbol of wealth and status, which will bring a person a sense of satisfaction, vanity and show off wealth. Waiting for additional value, these are the functions of this car as a system.

Let’s take another example: why do some people continue to work hard but end up feeling confused for a long time? They seem to be doing everything right, but they just can’t succeed. We may all be surrounded by people like this. Some people have changed jobs one after another and are very capable, but they just can’t succeed; some people have changed partners one after another, but they just can’t be happy.

Our life is actually a system. There are of course many elements in the system, including your daily behaviors and every decision. These elements may seem isolated, but the connections or relationships between elements are very important.

Some people change jobs frequently, and there is no relationship between the last job and the next job, so they always stay where they are and start over every time. Some people change partners frequently and always think that they have not found the best partner. In fact, they may have a problem with their definition of a good partner.

In short, you may think that each thing is correct when viewed individually, but the relationship between each thing is not optimal. In fact, this is not the most terrible thing, but the most terrible thing is that many people do not have a definite goal in life.

Life is a system, and the most important thing about a system is its goal.

Everything a person does may be right, but everything is not working toward the same goal, so he will continue to work hard and be confused for a long time.

There are also many people who have good interpersonal relationships, have both sides, or are very capable, but they do not have a clear life plan. The result is the same: continuous efforts but long-term confusion.

4 How to have strong systematic thinking?

Summed up in one idea: three abilities + two methodologies.

three abilities
The first person to come into contact with the ability of systems thinking may be a book called “The Fifth Discipline” written by Mr. Peter Senge.

The fifth discipline in this book “The Fifth Discipline” is about systematic thinking, which includes the following three important abilities:

1. Global thinking ability
It is how we consider all the elements of this thing and how we think about it clearly. We call it global thinking.

2. Deep thinking ability
That is, how do we see the essence from the phenomenon, and even see the future development trends, and what are the reasons behind the development of these trends? We call this deep thinking.

3. Dynamic thinking ability
It is how to think from the past, present and future, as well as the dynamics of the physical space we see. Suppose the same product is sold in Hangzhou, Shanghai, and Hefei, they may adapt to different user needs, so We call this dynamic thinking.

After this series of thinking, we will finally output our thinking through methodology.

two methodologies
1. Holistic thinking method—5W2H of factor method
Many people may have heard of the 5w2h model, which is often called the ” Seven He Analysis Method” . It mainly consists of seven elements:

What: What – what do I want to do?
Why: Why – why do it? Are you sure it’s reasonable?
When: When – when should it be done? When did it happen?
Where: Where – where is it done? What platform do you rely on?
Who: Who – who needs to be involved? Who is the leader and the target?
How: How – what exactly did you do? What is the process?
How much: What are the inputs and outputs?

The 5W2H analysis method is generally used as an evaluation index. Any data and behavior can be judged according to these 7 questions. If any of the questions is unclear, further improvement is needed.

The following is an introduction to using the 5W2H analysis method to analyze a specific business scenario, using the recent bleak catering industry as the background.

An offline catering company has shown a significant decrease in customers in the past month. According to preliminary analysis by the business department, it is judged that it is due to the serious loss of old users. However, the business department cannot trace the reasons for the loss of users. I want you to use the existing data. Identify the problem.

This problem is a common user churn analysis. There are many analysis methods. Today we will use 5w2h alone to analyze:

Analysis purpose
Generally speaking, the catering industry attaches great importance to user operations and customer quality. To achieve sustained profitability, it must ensure that “the inflow of new users > the loss of old users” . Therefore, the catering industry generally attracts new users through advertising, and then through Promotional activities promote activity, which is the business background.

Now the business wants you to locate the reasons for the decrease in customers. Essentially, it wants you to find ways to increase the customer retention rate while keeping the cost of acquiring new customers unchanged. Therefore, the purpose of our analysis this time is to locate the reasons for the decrease in customers. The reasons for customer churn can be determined by identifying the reasons and taking targeted measures.

analysis of idea
Let’s directly follow the 5w2h thinking model:
what: We have lost a lot of old users in the past month.
where: Which store has the most losses? Which areas are losing the most?
who: Who lost the most? How about user portraits? Is it related to age, occupation, gender?
when: When is the greatest loss? Some week? One day? A certain time of day?
why: Why is it lost? Because the food tastes bad? Price too high? Have a competitor? Environmental reasons?
how: How was it lost? Step loss? A cliff-hanger? Slow drain?
how much: How much was lost? Is it at normal levels?

2. MECE law
MECE analysis is an important principle proposed by Barbara Minto in “The Pyramid Principle”. It provides a way of thinking and solving problems. MECE is the abbreviation of Mutually Exclusive Collectively Exhaustive, which means “mutually independent and completely exhaustive” , which is also the core of MECE.

For an issue, it can be classified without overlap or omission, and at the same time it can effectively grasp and solve the problem. When dividing a whole into different parts, it must be ensured that each divided part meets the following requirements:

ME: Each part is independent of each other, has no overlap and is exclusive.
CE: All parts exhausted, nothing left out.

ME means that each piece of work should be independent, and there should be no overlap between each piece of work; CE means that no item should be missed in the process of decomposing work, and completeness should be ensured. When we need to solve a problem or analyze complex work, the MECE analysis method can effectively help us conduct a structured analysis of the problem to avoid duplication or omission of logical loopholes due to confusion or unclear understanding.

The essence of MECE is to discover and solve problems, predict the possible consequences of problems, or evaluate the impact on core issues. Do not repeat operations, do not miss key points, and go straight to the essence of the problem. This is the charm of MECE.

The most fundamental purpose of using MECE analysis is to avoid generalizations and logical confusion. When analyzing a problem, if we want to clarify our ideas and express them accurately, we must master the MECE analysis method.

Next, I will briefly share the specific steps:

Step 1: Determine Scope
Before applying the MECE law, we must first clarify the scope and boundaries of the problem; that is, we must clarify what the problem under discussion is and what we want to achieve.

Step 2: Find the right entry point
The entry point refers to the dimension from which things are to be divided. The entry point should have common attributes. For example, should they be divided by location, function or structural sequence? The same thing can be found in different entry points according to different dimensions. Different entry points will lead to completely different results in dividing things.

Step 3: Continue to split down
For the disassembled elements, you can continue to disassemble them according to the “MECE rule”, but always remember ” What is the purpose of your disassembly analysis? ”

Step 4: Check for omissions or duplications
Combined with the logic tree structure diagram, use a visual method to check the results of classification and disassembly to see if there are any omissions? Is there any overlap? Of course, sometimes it may happen that after splitting, there are still several items that do not belong to which floor they belong to, but these items are still relatively important. In this case, you can try to add a category – other.

For example, how does the company classify customers in its business activities?
By region (Hokkaido, Tohoku, Kanto…)
By industry (food, electrical machinery, communications…)
According to scale (less than 100 people, 100-299 people, 300-999 people, more than 1,000 people)
Divided according to transaction status (no trading experience, transaction suspended, continued transaction)
Score according to customer performance (good, flat, sluggish)
According to the capital of the enterprise (local, foreign capital)

So how should we better differentiate between customers?
For example:
When sales personnel are spread across the country, it is better to classify them by region. When customers need to acquire necessary professional knowledge, it may be better to differentiate according to industry (because each industry has its own characteristics). If you want to create a brochure for proposals and separate them by transaction status, you may be able to make proposals that match each entry point.
Just one entry point can have a great impact on business activities or the content of proposals, and it often happens that if a highly sensitive entry point is chosen, the difference in strategy that should be adopted becomes very obvious.
However, in the past, once I used a certain entry point to start organizing my thoughts, I would completely forget to consider other entry points . If you can often and consciously think about whether there are other entry points, you may be able to find a better MECE state.

Clearly defining all elements of the problem through step-by-step decomposition is the core idea of ​​MECE analysis. Independent and complete problem definitions are the basis for subsequent problem analysis and solution, and are also the ideas for structured analysis and problem solving. In actual application, you need to pay attention to the following points:

1. Be clear about your goals: Always remember: “What is the purpose of classifying and dismantling?” You cannot dismantle for the sake of dismantling; for the same thing, you can classify and dismantle it from different dimensions.

2. Pay attention to hierarchical consistency: the same level should be of the same category and attribute; for example, the previous way of classifying library spaces illustrates the importance of hierarchical consistency.

3. Multi-accumulation theoretical framework and management model: Mature theoretical frameworks and management models can help us analyze and dismantle effectively, and are very practical.

However, the MECE law also has some disadvantages:
MECE law, although it completely and independently dismantles the elements of complex things, in fact, the dismantled elements influence each other. In reality, the problem is often a complex network structure. Therefore, The MECE law’s tree-like structure that is dismantled layer by layer is not applicable.

From the perspective of analysis structure, the MECE law is biased towards static analysis, while the correlation, dependence and influence process route between elements is dynamic analysis. The analysis of dynamic plus static analysis is a complete analysis, which is a dynamic balance structure formed by the mutual influence and interaction between elements. , is the systematic thinking we need.

Final summary

The seemingly elusive systematic thinking has been elaborated in this article. I hope that every reader can study hard, think seriously, practice deliberately, and finally stand out from his own field and become that extraordinary person!

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