The systems thinking workforce – powering competitive, responsive, resilient businesses

Business decision-makers are under increasing pressure to keep pace with the relentless acceleration of change and growing complexity across business ecosystems.

In pursuit of greater efficiencies, technology has enabled businesses to increase automation with rules and processes and flatten organisational structures. But faced with ever-increasing complexity, surely managers need more time, not less, to make good decisions? 

Instead of considering a wide range of potentially relevant factors and options and optimising choices, overstretched managers often settle for the first credible option and move onto the next set of challenges. Simple solutions are frequently applied to complex problems. 

But Dr Martin Farrar, in A Systems Thinking Mindset for a Sustainable World, maintains that complex problems can’t be reduced to rules and processes. They involve too many unknowns, too many interrelated factors, and have an unknown number of potential solutions.  

The systems thinking mindset 

Systems thinking is an approach to “wicked problems” – problems with many interconnected factors that make them complex – that views issues as part of a wider, dynamic system.

It is the process of seeing an issue both individually and as part of a whole. It considers how factors interact with one another, seeing patterns and feedback loops to help decision-makers reach good decisions.  

This is not a new concept. Over 500 years ago, Da Vinci wrote, “Learn how to see: realise that everything is connected to everything else.” 

He believed that we need to know how to see, “sapere vedere,” to be able to understand and connect all the relevant factors of any situation and to uncover new ideas. 

The implication of adopting a systems thinking mindset is more management attention, not less. Businesses are faced with the conflicting forces of less available management attention and increasing complexity and the need for speed. 

In my last column I talked about integrated thinking and the Integrated Reporting framework and its widespread adoption amongst listed businesses in Japan.

Finance professionals have an important role in making connections between relevant factors that have a bearing on these wicked problems and financial outcomes.

Farrar points to a systems thinking skills gap in the profession, though progress has been made with the rise of Integrated Reporting and the Integrated Thinking Principles. 

The Integrated Thinking Principles and systems thinking are closely related, as both aim to create a holistic and interconnected approach to understanding and managing businesses. 

Perhaps businesses need more decision-makers at more levels of power hierarchies to reduce crowding senior leaders with issues that could be resolved elsewhere in businesses.

But senior leaders fear letting go of decisions for fear of negative outcomes. That is why rules and processes have often replaced empowerment and trust. But innovation and fresh thinking typically come from those closest to market and operational realities. 

Building resilient businesses with IPM 

Businesses that can fully integrate their approach to problem solving will be better positioned to optimise performance and be more resilient and competitive – and this is where Integrated Performance Management (IPM) can help.  

IPM is a forward-thinking framework developed by the Association of International Certified Professional Accountants, the global alliance formed by AICPA and CIMA, and the World Business Council for Sustainable Development (WBCSD). It: 

• Introduces a comprehensive, people-centric system that connects strategy execution with workforce engagement, ESG integration, and long-term value creation. 
• Focuses on detailed components on leadership, culture, resource allocation, and data-driven decision-making. 
• Provides a practical roadmap for organisations seeking resilience, innovation, and sustainability in a rapidly evolving global landscape.   

Crucially, it recognises that employees closest to the coal face are generally best positioned to respond to wicked problems as they emerge. 

Businesses should provide their people with learning opportunities that help them to develop a systems thinking mindset and, because IPM drives collaboration between different specialist functions and empowers them to respond, a systems thinking mindset amongst collaborating employees is likely to generate diverse and novel ideas for responding to challenges as they arise.

Businesses are more likely to benefit from optimised decisions at speed than the status quo of leaders acting upon the first credible option that becomes available. 

A further danger of (and motivation to evolve from) leaders acting upon the first credible option is that options will likely be constrained to the prior experiences, biases, and fears of a small group of people.

In certain cases, options could be further constrained by group think or the power dynamics of the leadership group. 

Embedded throughout the workforce a systems thinking mindset, powered by Integrated Performance Management, will lead to better optimised decisions and result in more resilient and competitive business.