©2019 by David J Banger | Founder CHANGE lead ® 

The importance of systems thinking

There is a tendency for organisations to determine and prioritise actions based on a bias of experience and input from trusted colleagues. Often senior colleagues have a subconscious bias to trusted colleagues, favouring those who validate their thinking. The emergence of digital will require different and new thinking within any industry; it presents both an opportunity and a risk for all organisations.


Santiago Theory of Cognition helps create a higher consciousness of the system people participate in (not a technology system or process but the broader eco-system, when reading this think about the eco-system) consider;

  • Cognition emerges as a consequence of interactions between the system in its environment. Cognitive systems can be technology or 'living' systems

  • Technology does not rationalise reality; there is no bias

  • The essence of Santiago's Theory is that human being's do not perceive their reality; we do perceive the world we see, and we see the world we know how to perceive. Our perception is our reflection of our history. We create reality; we bring forth a reality

  • In a situation where there is conflict (conflict can be good), there are different systems with different realities. If somebody endeavours to explain a situation based on their reality, they may refer to this as what is 'really going on here'. The person explaining this is making a demand for obedience, i.e. "what I see is real and your delusional".

  • If this is not understood, the state of the system is fragile for those involved.

When a group of people can operate with humility and acknowledge that they don't see everything that is occurring, learning is enabled. Your reality is not my reality; my reality is not reality; it is a perception; let's learn together.


If you apply Santiago's Theory to how people with organisations are contemplating digital, the consequences could be significant, if they are not a learning organisation. Consider recent MIT research of board members that saw digital disruption as one of their biggest threats, estimating that 32% of revenues will be threatened in the next five years. Interestingly, only 39% of board members reported specifically discussing digitisation of the enterprise business model.


Further, often the Chief Information Officer (CIO) reports into an executive role rather than being a member of the executive team. Therefore, if a digital conversation occurs within an organisation at the board or executive level, these are often without a technology industry professional. The perception and the potential of the value of the CIO role holder within an organisation are very often influenced by their previous experience. Based on my experience there are three types of CIO.


Technical; very comfortable and confident with their technical nous and sometimes can be found coding or provisioning infrastructure. Their background before the role has been within technical roles and limited business experiences. There is a belief that any technical scenario can present an opportunity to better a solution vendor is offering or if it's not available; let's build it ourselves! The risk for the person in the role is they work 'in' technology rather than 'on' the business


Procurer; have arrangements in place or are making the arrangements for the delivery of services from a third party. This can present opportunities, such as automation of infrastructure to the cloud but also risks such as outsourcing of traditional services and projects to third parties. When establishing or being within an outsourcing relationship, there is a risk that the third party will be measured/ rewarded on the delivery of services rather than evolving the service. The implications for the broader business who are receiving the services is stagnation or expensive initiation via change requests to evolve the service. Degradation of technical currency is the outcome


Business; considers the technology team an extension of the business rather than a service provider. The person understands clearly contributes to and co-creates parts of the broader business strategy. Links the possibilities of a well-performing information technology capability with emerging or established operational and customer technology.


These technology leaders within any organisation operate and contribute to the system, and they need to understand their bias.


Peter Senge who authored 'The Fifth Discipline' initially published in 1990, explores the learning organisation and systems thinking. Systems thinking links interdependence and interconnectedness, a good example to start thinking about is a family. A family is a system. Often a situation within a family is a symptom of a broader problem, a poorly behaving child is a symptom of a more widespread problem, potentially the child is seeking attention or replicating the behaviour of another family member?


There are many points of interdependence and interconnectedness at many levels across society. These points of 'inter' is now global and commenced being global in the Industrial Age. The digital possibilities for an organisation integrate systems not just technology, digital is part of our societies evolution. Therefore, the CIO is only part of the system and should be a contributor to digital rather than owning digital. The management of digital is likely to be different from how a CIO will manage information technology due to the many 'inters'.


Interconnectedness is how our actions affect others on the other side of the world.

Senge's book includes a section on 'loops', reinforcing and double loops that are useful for systems thinking.

  • A reinforcing loop is an action by one party, creating a responding action by another party, and then continues with actions by both. An example is the arms race between the USA and USSR, with both countries stockpiling weapons as a position of power. A reinforcing loop is a systems cycle that continues; the cycle could be good or bad

  • A double loop is a loop that has action taken, creating an alternative loop. An example I have used within workshops was a community with a crime problem. Crime occurs within this community due to an illegal drug dependency. The police endeavour to address the drug problem by arresting known drug dealers, intervening in the reinforcing loop between crimes occurring and drugs being purchased. This seems like a sensible intervention, however due to the reduced number of drug dealers being reduced and drugs are now less readily available, the price of the drugs increases, increasing the volume of crime. Not all actions can be positive.


Systems thinking and the learning organisation need to be understood by an organisation. Loops and actions need to be studied by organisations. The potential of digital can enhance or exacerbate a situation rapidly.