Like all human beings, Enterprise Architects use models to understand our world and inform our actions. Einstein emphasized that effective models must be as simple as possible—but no simpler. There can be little doubt that the modern, global enterprise is best modeled as a complex, multi-minded, adaptive system inhabiting an uncertain, dynamic, richly populated—and richly interconnected—enterprise context. Anything else is too simple.
Once we admit complexity into our enterprise models, we need tools able to deal with that complexity. The most basic need is for clear thinking about complex systems and environments, and that is where systems thinking comes in. Systems thinking is a holistic approach to analysis that focuses on the way a system’s constituent parts interoperate, how systems work and change over time, and how they interact with other systems. It emphasizes the importance of feedback loops, delays, and other factors that cause undesirable behavior. Systems thinking originated in 1956 when the Systems Dynamic Group was created by professor Jay Forrester at the MIT Sloan School of Management, and it has been honed over the years to deal with difficult, complex problems in many domains.
But systems thinking is no panacea. We want to architect enterprises that can be controlled, yet systems thinking says that control of a complex system is not possible—the best that we can hope for is to influence parties in the enterprise ecosystem. We want to engineer stable, nearly independent systems. However, systems thinking tells us that while independence is an important goal, we should not expect to fully realize it, since “nearly independent” means “dependent” in some ways. In fact, these dependencies ultimately connect everything to everything else, at least indirectly. It is hard enough to understand the connections, not to mention the unforeseen behavior that often results from the interactions. Uncertainty in the behavior of complex systems never goes away.
These apparent limitations, however, are not shortcomings in systems thinking; rather, they are inherent in the reality of every enterprise. So it is crucial that systems thinking helps us recognize these and related dilemmas. Systems thinking also provides us with a number of ways to look at systems, including insights into what constitutes a system and the impossibility of drawing just one system boundary (due to different stakeholder perspectives). It also offers heuristics for designing robust systems, for diagnosing and correcting problematic system behavior, and for addressing many commonly encountered system “traps” (e.g., the tragedy of the commons), thus allowing us to set an informed path forward.
By designing the systems that provide the enterprise’s capabilities, Enterprise Architects help the enterprise achieve its mission, vision, and strategy. Together with other strategic stakeholders, they need to answer specific questions about any proposed systems: What are the enterprise’s goals for these systems? What capabilities do they enable? Where is the enterprise headed, and how might this change over time? How might the enterprise’s environment change? What pressures will these changes exert on the systems? What are the cost-benefit tradeoffs of building flexibility into the systems so that they can adapt effectively, efficiently, and quickly?
There are even more questions at the heart of defining and scoping systems: What is the role of the system in its environment? How does the system provide benefits to and otherwise impact a variety of stakeholders, either intentionally or unintentionally? What are the concerns of these stakeholders, and what is the systems context for each of these concerns?
One of the most fundamental aspects of any system is its stability, that is, its ability to persist over time, even in the face of significant change, both external and internal. For a purposeful system like an enterprise, persistence requires that it provide useful and valued contributions to society, although the specifics of the contributions are likely to change as society changes. How does an enterprise evolve its contributions effectively and efficiently? Are there fundamental limits to the resources that the enterprise can rely on for the development, operation, evolution—and retirement—of its systems?
Systems thinking also helps with some of the thorniest problems facing society and the enterprise’s role in addressing them. What should enterprises do to help society prosper over the long term? Seeing the big picture and balancing across many dimensions is key to improving our common sustainability. Focusing too narrowly on the natural environment (environmentalism) has proven limited in its ability to improve our situation, because people and corporations reject the narrow focus as impractical. And most people don’t prioritize the environment ahead of their needs and lifestyle.
So how does systems thinking help ensure that the enterprise can sustain its value over the long term? By considering how the enterprise acts as a complex, multi-minded, adaptive system within its larger societal, political, economic, and natural environment. This implies considering the enterprise’s many component systems, including people, automated systems, buildings, and equipment. These are richly interconnected through dynamic processes, information and resource flows, and causal structures featuring feedback loops and delays. The components are in many locations and work together to form capabilities that transform inputs into products and services for customers.
Multi-mindedness, the condition of having a number of stakeholders with both common and competing interests and ideas about directions and decisions, is one of the greatest challenges organizations face. In our increasingly information-rich and hyper-connected world, it is becoming easy for any motivated stakeholder to learn about and track how the enterprise is operating. To be effective, the enterprise must be aware of the concerns of all stakeholders and, as appropriate, include them in the ongoing strategic conversation. The goal is to come up with a balanced approach to addressing competing concerns that gets the support of most stakeholders and eliminates any strong opposition.
Enterprise systems do not stand alone; they depend upon resources, suppliers, channels, collaborators, and other parties in the enterprise’s ecosystem. Corporate leaders understand most of these dependencies, as well as the potential impact of competitors, some of whom may also be collaborators in bounded situations. However, it is the external factors, which are fundamental but often little noticed and poorly understood, that can both enable and/or profoundly constrain the enterprise. Changes in economic, societal, political, legal, technical, natural environment, and resource systems, which may be large and abrupt, can disrupt the “business as usual” operation of the enterprise, presenting it with both threats and opportunities.
Getting disruptions right is almost certainly the most important factor for the long-term success of an enterprise; it merits hyper-vigilance and rapid, accurate adaptation to changing conditions. Systems thinking helps us understand not only the complex operation of an enterprise but also the actual and potential disruptions in its ecosystem and the broader surrounding contexts of an enterprise. And it helps us discover ways to address these disruptions. As such, systems thinking is truly the foundation for architecting enterprises that can survive and thrive over time.
Note: This blog is adapted from the introduction to our chapter in Beyond Alignment: Applying Systems Thinking in Architecting Enterprises in 2013, pp. 92-94.