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CYCLES course (5): Systems and System Thinking

A lot of research has shown that systems are the key to innovation success.
Systems are made up of interrelated components of people and processes with a clearly defined, shared destination or goal.

Systems work best when everyone shares an understanding and commitment to the aim or purpose of the system.

The foundations are clarity and a commitment to learn, and improve.

Great companies have 3 characteristics that set them apart from the rest. These characteristics are: 1. An ability to see and build on strengths 2. A commitment to build innovation eco-systems and 3. A commitment to ongoing action

Deliverables: Simplifying the challenges, structuring the learning process, getting better internally and in your eco-system.

Enough information to update your objectives and start another cycle.

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CYCLES course (5): Systems and System Thinking

  1. 1. Cycles The simplest, proven way to build your business. Systems and System Thinking
  2. 2. Systems
  3. 3. Quick Recap Increase your odds of working on the right things Problem finding + Stimulus + Diversity + Work Ideas / solutions worth testing Clarity to move forward Clarity First Really Listen Be honest Opportunities Death Threats
  4. 4. What’s the core message today… View 1: To move forward effectively you need to focus your energies on the most important parts of your business, the best way to do this is to use a systems view to identify death threats and key opportunities. View 2: Bullets, then cannonballs. View 3: Going slow to go fast. Final Understand what you’re aiming at and why, take time to shoot bullets together, then fire cannonballs.
  5. 5. The Theory
  6. 6. What is a system ? 2 or more independent parts working together to achieve a common aim A way of doing things A good system = product of parts 6
  7. 7. Collection vs Systems A bowl of fruit A football team AToaster A Marriage Tools in aToolboxA Kitchen
  8. 8. System Collection
  9. 9. A system versus a process a GOOD SYSTEM is 2 or more independent parts working together to achieve a common aim a PROCESS is A way of doing things (it doesn’t mean people will work together)
  10. 10. A good innovation system • A holistic view, so you can be honest with yourself • A momentum , a way to do things that stick • Purpose • Process • Persistency
  11. 11. The big value of systems They keep you learning and they keep you thinking
  12. 12. a systematic approach to making ideas happen
  13. 13. The Reality… Quality Of Ideas Time Start Learning Cycles No Changes Bad Cycles Smart Winners Lucky Winners Losers Losers
  14. 14. Cycles: The ABC’s Of Growth. Cycle 1 Cycle 2 Cycle 3 Cycle 4 Cycle 5 Align/Ask Build Communicate Check Systematically Improve Idea Quality Time
  15. 15. ‘Fire bullets, then cannonballs’ approach explains the success of companies 10x better than big-leap innovations and predictive genius Jim Collins
  16. 16. Video : https://vimeo.com/61581268
  17. 17. The flywheel effect Crawl, Walk, Run Change happens slowly, but then it happens all at one Building a flywheel Source: The flywheel Effect , Jim Collins
  18. 18. What an amazing idea !!
  19. 19. How to think in systems 1. Understand businesses are systems 2. Make room for system thinking 3. Use system thinking to identify death threats and “one things” 4. Take a systematic approach to learning
  20. 20. 3 Guys and a Genie
  21. 21. Assembling the best car ever
  22. 22. Best Parts don’t a system make!
  23. 23. The world is often not linear Versus
  24. 24. The language of systems Turn knob Measure Change Causalities Filling a glass of water
  25. 25. Reinforcing feedback The engine of growth and decline. Small changes amplify causing accelerated growth or decline.
  26. 26. Balancing Feedback Goal-oriented behavior Limits growth or decline Resistance to change is a balancing process
  27. 27. A simpler process diagram for a new product (and your case study)
  28. 28. Launch Product Sell Product Partner Support and profit for partners Case Studies Link to Sprint Ideas Link to other methods I Interest Real Benefits Links to Other Methods Clear Benefits A Aware Articles Books Talks Social media A Act (Buy) Dramatic Difference Emotions Remove Risks Fit with existing Programs D Desire Reason to believe Emotions Remove Risks Fit with existing Programs
  29. 29. How to think in systems 1. Understand businesses are systems 2. Make room for system thinking 3. Use system thinking to identify death threats and “one things” 4. Take a systematic approach to learning
  30. 30. We resist system thinking Because it is harder and usually more confrontational
  31. 31. Some old, but very good advice 1. Appreciation of a system 2. Understand Variation Common Causes vs Special Causes 3. Understand human behavior 4. Theory of knowledge 20171982 1993
  32. 32. Understanding Systems A system is complex. It is made up of interrelated components of people and processes with a clearly (or unclearly) defined, shared destination or goal. Appreciation of a system depends on quality leaders’ understanding the interconnectedness and interdependence. In a good orchestra people play together The same should happen in business
  33. 33. Variation Common Cause versus Special Cause Common Cause • Is inherent in the design of the process • Is due to regular, natural or ordinary causes • Affects all the outcomes of a process • Results in a “stable” process that is predictable Also known as random or unassignable variation Special Cause • Is due to irregular or unnatural causes that are not inherent in the design of the process • Affect some, but not necessarily all aspects of the process • Results in an “unstable”” process that is not predictable • Also known as non-random o
  34. 34. Common cause or Special Cause ?
  35. 35. Common Cause or Special Cause • Innovation does not work in 94% of organizations • You’re late for class because of a flat tire • You’re always late for class • 85% of start-ups fail Deming estimates : 94% of problems are due to common causes and are management's responsibility. He estimates that only 6% of problems are due to special causes
  36. 36. Understand human behavior Most psychologists agree that humans have an innate desire to perform well, to take pride in what they do. Successful organizations harness this by ensuring that systems allow workers to contribute towards improvement. Theory of knowledge Improvement isn’t something you do once and forget about, it isn’t a process with an end-point. Improvement within an organization has to be continuous.
  37. 37. How to think in systems 1. Understand businesses are systems 2. Make room for system thinking 3. Use system thinking to identify death threats and “one things” 4. Take a systematic approach to learning
  38. 38. It’s Easy To Ignore What You Don’t Want To Do. The Stockdale Paradox (Named after Vietnam Prisoner of War) Retain faith that you will prevail in the end, regardless of the difficulties. AND at the same time confront the most brutal facts of your current reality, whatever they might be
  39. 39. ++ +++ - +++ + + + + Failure Success Success is about getting everything “good enough”
  40. 40. ++ +++ - +++ Failure Success ++ +++ + +++ Option 1: You can fix a “death threat”
  41. 41. ++ +++ - +++ Failure Success +++ ++++ + +++ Option 2 You can find a “one thing”, that makes many things better
  42. 42. Launch Product Sell Product I Interest Real Benefits Links to Other Methods Clear Benefits A Aware Articles Books Talks Social media A Act (Buy) Dramatic Difference Emotions Remove Risks Fit with existing Programs D Desire Reason to believe Emotions Remove Risks Fit with existing Programs Partner Support and profit for partners Case Studies Link to Sprint Ideas Link to other methods
  43. 43. 2 ways to be really effective multi-tasking to “unitasking” parallel to sequential
  44. 44. A simple example With Current 40 hours Web site right 80% 90% 90% 80% 80% 80% 80% Better Laptop 80% 99% 80% 99% 80% 80% 80% Co-founder 30% 60% 30% 30% 60% 30% 30% Product 80% 90% 80% 80% 80% 90% 80% Pricing 40% 75% 40% 40% 40% 40% 75%
  45. 45. The most powerful tool ever invented for a start-up Do Now Do Later Don't do
  46. 46. Slower is faster ! A study by Economist intelligence with 312 companies split into 2 groups: 1. Go, go, go 2. Think, go , think, go (paused at strategic moments) The companies with strategic pauses achieved: 40% higher sales and 52% higher profits
  47. 47. How to think in systems 1. Understand businesses are systems 2. Make room for system thinking 3. Use system thinking to identify death threats and “one things” 4. Take a systematic approach to learning
  48. 48. What does it mean to learn as you go? Quite Simply… 1. Test 2. Learn 3. Take Action
  49. 49. Mini versus Maxi Learning cycles Mini Low stakes beta test Bullet Maxi High stakes investment Cannonball
  50. 50. Your hypothesis matters Hypothesis, Test, Learn Take Action
  51. 51. A system of Active learning = The heart of Innovation • Holistic and honest view. • Accept and Overcome business shortcomings. • Momentum: a way to doing things that stick • Purpose • Process • Persistency • Making decisions and taking action as you go An Innovation system is incomplete without active learning
  52. 52. Quick Recap Increase your odds of working on the right things Problem finding + Stimulus + Diversity + Work Ideas / solutions worth testing Clarity to move forward Clarity First Really Listen Be honest Opportunities Death Threats Understand Analyse Make decisions A smart next step A little or a big cycle
  53. 53. If you got it right, launch cannonballs. If not, fire more bullets or try 1.Understand what you’re aiming at and why Alignment 2.Look for better solutions Build 3.Check progress Communicate + Check 4.Make decisions Systems

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  • RicardoVaz4

    Mar. 13, 2020
  • AspectHorizon

    Dec. 8, 2020

A lot of research has shown that systems are the key to innovation success. Systems are made up of interrelated components of people and processes with a clearly defined, shared destination or goal. Systems work best when everyone shares an understanding and commitment to the aim or purpose of the system. The foundations are clarity and a commitment to learn, and improve. Great companies have 3 characteristics that set them apart from the rest. These characteristics are: 1. An ability to see and build on strengths 2. A commitment to build innovation eco-systems and 3. A commitment to ongoing action Deliverables: Simplifying the challenges, structuring the learning process, getting better internally and in your eco-system. Enough information to update your objectives and start another cycle.

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