Mar

13

In an article about Toyota, J. Brian Atwater and Paul Pittman highlight the importance of systemic thinking.

"Through the analytical paradigm, we attempt to understand complex phenomena by breaking them into smaller parts, then trying to understand how the parts operate in isolation. All evolved fields of study — from chemistry to business — have used this same analytical methodology as a basic building block to understanding."

"Systemic thinking is, fundamentally, the opposite of analysis. Rather than trying to break a complex phenomenon into smaller pieces, it attempts to understand complexity by examining behavior within the context of the larger system in which it belongs."

The authors say Systemic thinking consists of holistic thinking, dynamic thinking, and closed-loop thinking.

  1. "Holistic thinking–studying the role and purpose of a system and its parts to better understand why they behave as they do."
  2. "Dynamic thinking–examining how the system and its parts behave over time."
  3. "Closed-loop thinking–investigating how the parts of a system react and interact to each other and external factors."

Issues that make understanding some systems difficult, as identified by Jay Forrester, are also applicable to speculation:

- Cause and effect often are separated both in terms of time and space.

- Problem resolutions that improve a situation in the short term often create bigger problems in the longer term; actions that make things worse in the short term often have long-term positive effects.

- Because of these first two characteristics, people often do not learn from their mistakes.

- Complex interactions between the various parts of a complex system often create counterintuitive behaviors. Consequently, what appears to be the obvious decision is often a bad choice."

Toyota's introduction of the Prius in 1997 provides a good example of systemic thinking. U.S. automakers took years to respond with their own hybrid vehicles, partly because the U.S. automakers' priority in the late 1990s, a time of low energy prices, was selling high-margin sport utility vehicles. There was no discernible customer demand for hybrid vehicles.

"By examining their industry holistically, [Toyota] realized demand for oil was going to increase significantly as India and China became more industrialized. In addition, political unrest in oil-rich countries and geological concerns that oil deposits may disappear made supplies dubious at best. Finally, worries over global warming made the development of fuel-efficient vehicles an attractive public relations move."

Nigel Davies remarks:

Seems to me like the kind of thing that is written after the fact. I'd need some convincing that Toyota's policy was nothing more than a happy accident. We chessplayers do this all the time, especially when we blunder and it turns out to be good: "Of course I'd seen everything; the bishop sacrifice was the only logical continuation…"


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