2. Systems Thinking - An Agile Perspective

One of the key ways to understand and implement agility is through systems thinking. This approach focuses on viewing an organization, team, or structure as a whole, rather than as isolated parts. Let’s explore this concept and how it applies to agile practices in everyday work.

Holistic View of the Organization

Systems thinking encourages us to see an organization as an integrated system rather than as disconnected departments or functions. For example, consider human health. If someone has a problem with their foot or hand, removing the affected part doesn’t necessarily restore overall health. Our body functions as an interconnected whole, and so do organizations.

When a team isn’t productive, it might not be due to internal issues alone; there could be external dependencies or other factors impacting performance. Understanding this interconnectedness allows us to address the root causes of problems, rather than focusing solely on isolated symptoms.

Relationships Over Objectives

In systems thinking, relationships between components are more important than individual goals. For instance, when developing a product strategy, it’s crucial to connect that strategy to the broader portfolio of the organization’s offerings. Managing these relationships ensures that products work together cohesively and deliver value to customers.

Understanding how customers interact with your product and the broader ecosystem of your organization is more valuable than simply achieving isolated goals. A holistic approach helps you manage these relationships effectively.

Metrics as Sensors, Not Goals

Metrics serve as a valuable tool in systems thinking, providing a “map” that helps you understand what’s happening within your team and organization. However, metrics should not become the end goal. For example, if you set productivity metrics as the primary driver for your team, it can lead to gaming the system, where people manipulate metrics without genuinely improving performance.

There’s a famous quote from Eliyahu Goldratt, author of The Goal: “Tell me how you measure me, and I will tell you how I will behave.” Systems thinking encourages us to use metrics as instruments for improvement, not as rigid indicators that shape behavior. Metrics should help evolve and optimize the system, rather than dictate performance for the sake of hitting targets.

Context-Driven Knowledge

Another key aspect of systems thinking is the idea that knowledge comes from context. Every organization and team operates in its own unique environment. When you enter a new environment, don’t rush to impose methods or practices that worked elsewhere. Instead, observe, listen, and learn from the team and its context.

If you impose methods without understanding the specific needs and dynamics of a team, you risk alienating people and fostering resistance. A better approach is to adapt practices to the context, creating solutions that fit the unique challenges and needs of the organization.

Connected Workflows and Teams

Systems thinking moves beyond looking at individual teams or departments in isolation. For example, in a product development scenario, you might have teams for credit card products, business accounts, and current accounts. Instead of treating these teams as separate silos, systems thinking encourages you to understand how their workflows are interconnected.

Similarly, cross-functional teams like design, software engineering, and testing need to work together seamlessly. Understanding how work flows between these teams ensures that products are delivered efficiently and meet customer needs. Systems thinking promotes viewing the organization as a living, connected entity where all parts work together harmoniously.

Applying Systems Thinking in Practice

You might be wondering how to bring systems thinking into your daily work. Here are a few practical applications:

Model the interactions between teams: One case I encountered involved a company that viewed departments—such as technology, product, marketing, legal, and customer service—as isolated entities. However, the work of these departments impacts customers collectively. We mapped out how these departments interacted to deliver solutions to customers. This exercise helped the organization understand how each team’s work contributed to the overall customer experience. By doing this in your organization, you can ensure that different departments are working together effectively.
Manage workload and focus: Often, when teams are overwhelmed with work, they lose focus and fail to deliver quality results. If you’re managing a team with too much work in progress, prioritize limiting the amount of new work being introduced. Overloading teams can lead to quick fixes or “band-aid” solutions, which only create more problems in the long run. Systems thinking reminds us that increasing work for an overloaded team has systemic consequences, affecting quality and long-term performance.
Psychological safety as a foundation: For systems thinking to work, teams must feel safe to express their ideas, collaborate, and learn. If people feel unsafe, they won’t contribute fully, and their interactions will remain superficial. Leaders need to cultivate an environment of psychological safety, where team members feel they belong and can openly engage in discussions. When people feel part of a bigger system and are connected to its success, the organization becomes more resilient and agile.

Conclusion

Systems thinking teaches us that organizations are interconnected systems that thrive when relationships, workflows, and context are considered holistically. By visualizing how work flows between teams, limiting work in progress, and fostering psychological safety, you can create a more effective, agile environment.

Systems thinking shifts the focus from individual actions to the bigger picture, promoting collaboration, long-term value, and organizational health. This mindset is crucial for any organization looking to truly implement agile practices that go beyond frameworks and tools.