Unlock Focus for Your Business with a Systems Thinking Mindset
All companies aim to operate more efficiently, with more output and less overwhelm. But it’s the ones that implement an operating system with clear habits and behavior standards aligned to the system that earn happy customers and happy employees. To manage a winning system, you must become a systems thinker.
By Jared Frank | 10 min read
The current business environment is difficult, and also the simplest it is ever going to be in our lifetime. It is only going to get more and more complicated moving forward. To navigate current and coming complexities, entrepreneurs must take a systems thinking approach to problem solving and strategic decision making. With an operating system in place, it doesn’t matter how complex the issues become, the system through which those issues are put remains the same. And it is this discipline of consistency and commitment to the simple that yields a winning edge to successful business leaders.
In his book Traction (a must-read for any entrepreneur or small business owner), Gino Wickman explains that “Either you’re going to run your business, or your business is going to run you.” Wickman’s Entrepreneurial Operating System (EOS)® helps business leaders “get a grip” by implementing processes, accountability, and clarity to avoid feeling overwhelmed by their business operations.
Seat 36 runs on OS36 – an operating system adapted from EOS. It brings focus internally as well as externally to any clients needing help with a case of whiplash that comes with chaos and too many competing priorities. Ultimately, it doesn’t matter what system you deploy (there are many theories). What matters is that you have a system anchoring your culture and habits, as well as systems thinkers throughout all levels of your organization. Beyond a problem-solving tool, a system aligns your operations, culture, and vision for long-term success.
Key Takeaways
Systems thinking encourages business leaders to view the big picture to better recognize hidden patterns, root causes, and underlying habits that fit together to drive outcomes.
Systems thinkers zoom out to understand the interconnected parts of their companies by asking questions, implementing feedback loops, auditing data flows, and intervening at high-consequence moments.
Managers instill a culture of systems thinking in part by implementing the five keys of effective teams (as uncovered by Google’s Project Aristotle) – Psychological Safety, Dependability, Clarity, Meaning, Impact.
What Is Systems Thinking?
First, let’s define a system. A system is any group of things (e.g. a soccer team, a car, a school) that together perform an intended outcome. Each player, gear, and teacher are crucial, but any player, gear, or teacher alone is not enough.
Systems thinking is a holistic approach to understanding how all the various elements of these systems interact and influence one another over time. Instead of focusing on individual components in isolation, it encourages operators to view the big picture to better recognize hidden patterns, root causes, and feedback loops that fit together to drive outcomes.
A business is such a system of interconnected processes, people (employees and customers), and goals. And systems thinkers always consider this entire web when solving problems. This methodology equips managers with a long-term perspective, rather than always rushing quick fixes. No more band aids on broken legs. And once the system roots into your organization, there are fewer broken legs that need fixed. Systems thinking businesses enjoy improved efficiency, enhanced collaboration (no more silos), and a more empowered and resilient employee force.
As a simple illustration, consider a time when your sales team was underperforming. Did that contest you ran really incentivize activity and drive results? Maybe for like a day.
Systems thinking prompts you to explore deep-rooted leverage points and intervene when needed with small changes that can create significant positive impacts across the system. Business managers must plumb underlying workflows, communication channels, and allocated resources to truly understand bottlenecks and customer experiences.
In our sales example, maybe one specific product isn’t selling. Maybe it’s only one or two reps who are lagging and dragging down the team. Maybe you need to consult other internal departments. Or maybe you need to talk to your customers and implement their feedback. The systems thinker figures it out quickly and effectively, whereas the manager without a system doesn’t sleep at night and relies on simply telling his team, “Sell more stuff or you’re fired.”
The Iceberg Model of Systems Thinking
The Iceberg Model is a powerful tool for visualizing systems thinking. If you picture an iceberg, 20% of the ice emerges above the water line. This 20% represents the obvious, chronic problems that most businesses spend 80% of their time and energy trying to solve. But much like an iceberg, most of a system lies beneath the surface.
“The action is happening below the water,” says Ted Souder, former Google executive and the Board Director for the tech incubator 1871.
Eighty percent of the ice (e.g. nonobvious causes, inefficient processes, recurring patterns, cultural beliefs, behaviors, etc.) isn’t clearly visible, and most businesses only spend 20% of their effort attempting to understand it. Systems thinking flips the iceberg and directs 80% of our energy towards the 80% of our system below the surface.
While it is natural to react to surface-level occurrences (e.g. missed deadlines, drops in sales, team conflicts), systems thinking encourages us to proactively dive deeper to uncover hidden layers that are really driving them.
How To Be a Systems Thinker
Becoming a systems thinker starts with a mindset shift. Instead of seeing problems as isolated incidents, you zoom out to view them as part of a larger, interconnected system. But how do you cultivate this mindset in practical terms? Here are four strategies to get you started.
1. Ask Questions
Curiosity is at the heart of systems thinking. When faced with a challenge, resist the urge to jump straight into solutions. Instead, ask thoughtful questions: What is causing this issue? How is it connected to other parts of the business? Are there recurring patterns? By digging deeper, you can uncover root causes that might not be immediately obvious.
In our earlier sales example, a dip in sales might be about pricing, or it could relate to marketing strategies, customer service, or even market trends. The more questions you ask, the more insight you gain.
2. Implement Feedback Loops
Business systems include customers and employees. For internal problems, solicit feedback (1:1 or anonymous) through interviews and surveys, and include employees in usability testing. For external problems, ask customers what their wants, needs, and friction points are, and invite them to design a solution together.
“Customers aren’t just your targets,” Sounder says. “They are your co-creators.”
Feedback loops are processes where outputs are fed back into a system as inputs. So acquiring customer and employee feedback must not simply be a check-the-box exercise. You have to actually put the feedback to work, take it into account, and share it with the right teams, then refine your strategy as warranted.
3. Audit Data Flows
Every system relies on information, but not all data flows are efficient or accurate. Systems thinkers regularly audit what data is missing and how existing sources of data move through their organizations. Are the right people getting the right information at the right time? Are there bottlenecks or blind spots in how decisions are made? By improving data flows, you enable smarter, faster, and more coordinated decision-making across your business.
4. Intervene at High-Consequence Moments
Not all parts of a system are created equal. Some moments or processes carry more weight in influencing outcomes. Systems thinkers identify these critical leverage points (i.e. if this breaks, the whole system goes down) and focus their efforts there. So ask yourself, when friction does exist, where should I look first?
High-consequence moments are those that involve one or more of the following:
- A lot of time or effort
- Multiple levels of buy-in
- Cross-functional collaboration/dependencies
- The customer experience
Leaders should intervene when consequences will have significant downstream impact. By targeting interventions where they’ll have the greatest impact, you maximize the effectiveness of your efforts.
There are three categories of intervention: People, Process, and Technology. Will different people/teams, new processes, or better technology/data improve the consequence?
Instill a Systems Thinking Culture
When systems thinking becomes part of your company’s DNA, everyone is empowered to see the big picture and contribute to more effective solutions. Here’s how you can lay the groundwork for a systems thinking culture.
Start with Behaviors and Beliefs
Culture is built on daily actions and shared values. Encourage your team to develop habits that align with systems thinking, like regularly questioning root causes, sharing insights across departments, and considering long-term impacts before making decisions.
Equally important are the beliefs that underpin these habits – fostering an open mindset, valuing interconnectedness, and embracing change. Leaders play a crucial role here by modeling these behaviors and creating an environment where curiosity and collaboration thrive.
Learn from Google’s Project Aristotle
Google’s Project Aristotle was an internal research initiative aimed at understanding what makes teams successful. The project studied over 180 teams within Google to identify the common factors that contribute to high-performing teams. The name references Aristotle’s famous quote: “The whole is greater than the sum of its parts.”
Project Aristotle identified five keys to building effective teams. These attributes – psychological safety, dependability, structure and clarity, meaning, and impact – can guide your efforts to build a successful team culture.
Psychological safety ensures team members feel comfortable sharing ideas, challenging assumptions, and taking risks.
Dependability ensures all team members are accountable to the team, take their responsibilities seriously, and complete quality work on time.
Structure and clarity ensure team members have clear roles, goals, and know exactly what is expected of them.
Meaning ensures team members find a sense of purpose or personal fulfillment in their work.
Impact ensures team members fundamentally believe their work makes a difference towards accomplishing organizational goals.
Make Systems Thinking a Core Practice
Finally, embed systems thinking into your processes and decision-making frameworks. This might mean including systems-based analysis in strategy meetings, offering training to help employees identify feedback loops and leverage points, or even celebrating successes that stem from a systems approach. The key is consistency. When systems thinking is steadily applied, it becomes second nature for your team.
When to Adapt Your Systems Thinking
Knowing when and how to adapt your systems thinking is crucial for keeping your business aligned with its goals in a dynamic environment. External forces like market shifts, technological advancements, or regulatory changes can impact the dynamics of your organization. When the landscape evolves, it’s essential to revisit your assumptions and strategies.
Internal red flags can also signal the need for adaptation. Employee churn, recurring customer complaints, or workflow inefficiencies might indicate a part of your system is out of sync. Using systems thinking, you can identify the origin point and understand how adjustments in one area may ripple through others.
As your business grows, so does its complexity. Remaining committed to your system’s fundamentals but adapting it ensures your business remains agile, resilient, and capable of capitalizing on new opportunities while staying true to its long-term vision. As you adapt your business, remember you are aiming for progress, not perfection. Through a focused, but open-minded systems thinking approach, entrepreneurs get a grip on their business, rather than the business having a grip on them. 
Do you need help organizing your business operations? Let’s chat.
Write to Jared at [email protected].
Disclosure: ChatGPT helped ideate the first draft of this article. The author revised subsequent drafts and contributed original copy to better reflect the intended message and voice.
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