The Benefits of Systems Thinking

Here are more examples that may help you see the benefits of systems thinking.

When the Titanic set sail from England, the engineers who designed the watertight bulkheads assumed that the hull would never be breached across multiple compartments below the waterline. This led to the popular illusion that the Titanic was unsinkable. Thus, for its maiden voyage, the ship carried only enough lifeboats to handle a small emergency evacuation.

In addition, weather reports at the time indicated the weather was better to the north and that there was no danger from icebergs. So the captain sailed a more northerly course to avoid inclement weather to the south. The owners of the Titanic wanted the ship to make the crossing in record time, which motivated the captain to sail at high speed through what turned out to be an iceberg-riddled ocean.

The story of the Titanic illustrates two types of errors – both precipitated by “ignorance loops.” The first is feedback delays. The weather reports upon which the captain relied were based on anecdotal evidence from a ship that had sailed three weeks earlier. The second is assumptions of causality. It was assumed that watertight doors caused the boat to be unsinkable. But in reality, the watertight doors couldn’t handle certain scenarios – including the gash in the bow that caused water to invade several compartments simultaneously.

Feedback delays are all too common. It would be absurd to drive a car down a street and respond to a red light fifteen minutes after it occurred. Yet companies rely on two-year-old market research to determine whether their products or services are well-positioned to meet consumer demands. When Disney made a huge investment in, it gambled that it would be able to make a significant dent on the emerging internet search market, then dominated by Yahoo. But as AOL-Time Warner had already discovered, the internet search business is a brutal marketplace – where content providers are penalized if they give preference to their own content. Disney’s investment turned sour and it later sold for a fraction of what it paid. Consumers simply weren’t behaving the way Disney assumed they would.

Assumptions of causality are also common. When videocassettes were introduced, it was assumed that the number of movie theaters would decline. Instead, home video viewing sparked an increase in overall demand for movies. There was a causal connection, but the underlying assumption was 180 degrees off.

The best way to cope with feedback delays and assumptions of causality is by encouraging people to challenge each other’s assumptions – including top leadership’s. At the CIA, a preliminary national intelligence estimate (nie) is put through the wringer of an all-day grilling in which senior officers do everything they can to poke holes in it. if the initial estimate survives, then it is forwarded to higher ups.

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