PROJMNGT 7047

Systems Design for Projects

Module 2

Introduction to systems thinking and complexity

Dr. Nam Nguyen
Visiting Fellow, Business School, University of Adelaide
Director, R & D, International Centre for Complex Project Management (ICCPM) 1
 Class exercise (5 minutes)

•Please draw your ‘own system’

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 Introduction to the systems concept
› The six blind men and an elephant
› A partial truth
› The moral of the story: having a
‘holistic’ view
› “The behaviour of a system cannot be
known just by knowing the elements of
the system”
(Meadows 2008, p.7)

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 Definitions of Systems
› “A system is a set of elements or
parts that is coherently organised
and interconnected in a pattern
or structure that produces a
characteristic set of a behaviours,
often classified as its ‘function’
or ‘purpose’” (Meadows 2008,
p.188)
› “Simply defined, a system is a
complex whole the functioning
of which depends on its parts and
the interactions between those
parts” (Jackson 2003, p.3)
› “A system is more than the sum of
its parts – it is the product of
their interactions” (Ackoff
1999)

For you:
Can you explain the message of this infographic?

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 A System versus a Collection
› A collection is also composed of a
number of parts but they are just
dumped together and are not
interconnected (Sherwood 2002)
› A marriage: a collection or a system?

Honey, are we a
collection or a I hope we are
system? a system!

Source: http://www.yaseenkhan.org

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 Basic Properties of a System
A system must consist of:
– Elements or parts
– Interconnectedness & Interactions
– Function or purpose

Examples:
• digestive system; tree; school; city; football team; corporation; a business;
etc.
• However, in reality, the ‘interconnectedness and interactions’ of the parts
in many businesses / organisations are often not good. This would prevent
the ‘emergent properties’ of the business / organisation for
innovation, efficiency and effectiveness.
• More over, many businesses / organisations also do not yet have clear
purpose, vision and strategy.

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Who is this man, and some of his hobbies…

7
Emergence: what makes a system

8
System levels

Simple Complicated Complex

The system only has a few The system has numerous

The system has numerous,
different modes, which are modes that are not clearly
clearly differentiated modes
clearly defined differentiated.

Lightbulb is on or off Swiss clockwork with 5,000 parts Rainforest

Minimal variety Average variety Extensive variety

Complicated or complex?
Complex: Complicated:

No mechanical watch Yes

No puzzle Yes

Yes piano keyboard No

Yes chess No

Number of states
(variety) Number of elements
 What is Complexity?

complicated… …complex

Complexity means that the functioning and behavior of a system can not be predicted
precisely. The reasons for that are the various interdependencies between the different
parts of a system. Complexity can be measured by the number of different states a
system can have (variety of the system).
Complexity has two sides to it

Complexity makes Complexity makes

everything difficult! everything possible!

“Greater abilities only arise from

higher complexity.”
(Karsten Bresch)
Understanding Complexity
If you know that an item consists of approximately –
• 15 kg of carbon

• 4 kg of nitrogen,

• 1 kg of lime,

• 1/2 kg of phosphor and sulfur,

• 200 g of salt,

• 150 g of potash and chlorine,

• 15 other elements,

• as well as of 4-5 buckets of water

what do you actually know?

Understanding Complexity and
Interconnection
Graphite and diamonds are both made of
carbon

Graphite Diamond
Understanding Complex Systems
Consequences for Project Design and Management

1 Highly dynamic, permanent changing systems → Unpredictability

2 Difficulties in understanding the problem → Uncertainty → Hesitation to take decisions

3 Increasing cost

4 Difficulties in setting the right objectives (Which are the right ones?)

How can we control a complex system?

Complicated but not complex
Complex but simple
From control to self-control

• Regulated system
• Self-regulated system

• Control is imposed on the system • Control is built into the system

Black Out> Crisis> Crash
Intelligent predictive control - Real Time Control
 «If the
rate of change in the outside
exceeds the
rate of change in the inside,
the end is in sight.»
Jack Welch, CEO, General Electric (1981-2001)
What makes up a system of a business / an
organisation?

• The appearance of the business / • Being the business / organization

organization

instead of hierarchical ... networked ...

• The interrelationships make up the
business / organization!
Practical example of a Swiss company: The
variables of the system …
…and how they interconnect to form a system
Concentration on few but Essential
Variables
Systemic Inter-Connection of the Essential
Variables: finding system’s ‘leverage
points’
 The Torn Net
A coherent net torn apart

We live and work in a society which

Media consists of a network in which everything
Politics Chemistry is connected, but in reality we make
decisions in a torn net. Examples are
everywhere – in governments we have
different departments; in universities we
City Planning
have faculties and schools; in the
community we have different
organisations and the organisations have
different parts, and so on. This is obviously
Biology Supply of Energy because we need these structures to be
able to have order in our societies. The
problem, however, is that we have built
‘thick walls’ around these entities that has
led to a lack of communication and cross-
Traffic sectoral collaboration. This is one of the
System major stumbling blocks in addressing
Water
complex problems.
Balance Economy
Illustrating looking at issues in isolation in
another way, ...

Concentrating on the particular………

 … his thought fails
to see the totality

…could have detrimental consequences

if we don’t understand the bigger system.
shared by Joe Barbosa
Drawing by Levin; © 1976 The New Yorker Magazine, Inc.

This cartoon relates to several important concepts in systems thinking, such as: a “quick-
fix solution” often leads to “unintended consequences”, a management decision could
have a “delay” before the effect is recognised, etc.

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 Project Failures, Over Budgets, Decision
Disasters and poor Investments continue to
plague our Society
Worldwide only 40% of
projects are successfully
completed on time and Human Factors
within budget the main barriers to success,
e.g.:
› Difficulties in changing
attitudes (58%)

35% of major projects › Dysfunctional corporate

severely underestimating culture (49%)
the degree of complexity › Lack of senior
management support
(32%)

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 You may know me …

but you have no idea

WHO I AM

Our basic philosophy

It is easy to see an iceberg (the

symptoms) but much more difficult
to see what is underneath the
water (root causes) and how big
the iceberg is (level of complexity).

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 $$$ for reducing The IcebergApproach
Systems Approach
business issues
Addressing fundamental problems to achieve
Symptoms sustainable systems
Events

PATTERNS
interactions between
components

$$$ for root causes of $$$ for mitigating

business issues unintended
SYSTEMIC STRUCTURES consequences
What does the system look like

MENTAL MODELS/MIND MAPS

People’s understanding

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 Definitions of Systems Thinking
› Systems thinking is a ‘new way of thinking’ to understand and manage
complex problems (Bosch et al. 2007; Cabrera et al. 2008).
› “Systems thinking is a way of seeing and talking about reality that helps us
better understand and work with systems to influence the quality of our
lives” (Kim 1999, p.2)
› System thinking is a way of seeing and describing practices that
help us better understand the system and thereby impact on the
system to achieve the best outcomes; rather than using ‘quick
fixes’ solutions.

› Since 2017, the United Nations (UN), the World Health Organization (WHO)
and the Organization for Economic Co-operation and Development (OECD)
have all publically declared systems thinking to be a key leadership
skill that is necessary to deal with the fundamental interconnectedness of
complex, local-to-global economic, social and environmental issues.

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Why Systems Thinking?

Increasing
Technological Conflicts
Global Information
developments
Exchange

Climate and
Complex Social & Political
Environmental
changes and Dynamic Developments

Differentiation of
Social Responsibility
Disruption Customer Needs
of the Value Chain
 Making Decisions in such a
Complex Web of Interactions
Politicians, business managers and all members of society have to make important decisions on a daily
basis in the complex web in which business, social issues, finance and economics, environment, politics
and culture are all highly interconnected.

Do we get it right?
– Do we make good policy and investment decisions?
– Are we aware of the unintended consequences of our decisions?
– Are we effective in our cross-sectoral communication and collaboration to
deal with the multi-dimensional nature of complex problems?
– Do we go for quick fixes because it is easier to treat the symptoms?

• OR

• Do we urgently need new and innovative ways of thinking and

fresh approaches and tools to deal with the problems facing our
society?

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 Linear Thinking
• Most people, when asked how can poverty on an
island community be alleviated through tourism, Improved
will say: ‘enhance tourism, that will lead to more
Quality of
tourists, more jobs, more money for the people
and their lives will improve’. That is how many of
Life
our management decisions are made through
pure linear thinking.

More $$$

More Jobs

More Tourists
Enhance
Tourism

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 Systems Thinking: Systems Model of Cat
Ba Island, Viet Nam
P Agriculture
Other pollution sources S O S Services New construction
Eco pollution
S B_T4 O S
Attraction of
S S Infrastructure Agriculture S
CB island
R_T2 S revenue
Biodiversity
B_T3
Number
Number of
S
of Tourists
tourists S
B_T1 R_T3
Tourism R_T3 Access to market
Tourism Increasing
revenue S
pollution R_T1 Investment in S
n Jobs
agriculture
B_T2 S R
Available S S S Eco3
underground Waste Hotels and
water Restaurants S GDP per capita
S S Information and Other income
communication sources
Use of S
R_Eco1 Wealth of of
Livelihood S
underground water S O Food safety
Commoner
Local O
R_Env Health

Misuse of NR
O People S
NR conservation Life expectancy
O R_S1
Poverty O S S
The System is influenced by O Educated Population Immigration
S population S
R_S3 S Student
S population
Cultural values R_S2
NGOs Governance Policies O
structure Social
evils/crime
S S O
Tourism development People’s awareness

The line from number of tourists to reduction of poverty is there, but look at the various effects and causes
that cut across various areas of interest (e.g. Agriculture, Social issues, Conservation, Education,
Governance, Tourism, Economics, Food Safety & Security, Infrastructure & Planning, Pollution, etc.)
• Nguyen, Bosch et al. (2011). Creating ‘Learning Laboratories’ for SD in Biospheres - A Systems Thinking Approach. SR & BS, 28 (1), pp 51-62.
Systems Model of Cat Ba Biosphere
Reserve and UN SDGs
Where to from here
P Agriculture
Other pollution sources S O S Services New construction
Eco pollution
S B_T4 O S
Attraction of
S S Infrastructure Agriculture S
CB island
Biodiversity R_T2 S revenue
B_T3 Number of
S tourists
This module B_T1 was only intended to be
S
R_T3 an introduction to
Tourism R_T3 Access to market
systems
Tourism
pollution
thinking, interconnectedness
R_T1
revenue and complexity.
Investment in
S It S
Available
hopefully has stimulatedB_T2 youS to continue S
S
withagriculture
S
the journey R
Eco3
underground
water
through Waste the further modulesHotels and of this course.
Restaurants S GDP per capita
S S Information and Other income
communication sources
The course consists of many
Use of
underground water
R_Eco1 more interesting
Livelihood
O Commoner
of S aspects that
S
S O Food safety
could help R_Env all of us using systems O
thinking to
Healthmake
S
an
Misuse of NR
impact
NR conservation
in the O world; and there are many R_S1 tools that could
Life expectancy
Poverty O
help you
The System to become
is influenced by more systemic O Educated
in
S
your way S of thinking
Population Immigration
S S
and subsequently your way of designing population
R_S3 S
a Student
project,
S
managing an organisation and Culturaldealing
values withpopulation
R_S2 the
NGOs Governance Policies O
complexities
structure we are facing in this ever changing, turbulent
Social
evils/crime
S
21st Century knowledge society we
Tourism development
areS Opart of.
People’s awareness
 Thank you very much and enjoy learning!

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