The Interplay of Systems and Process Thinking

Published: Jul 13, 2023

A hand drawing a business process flowchart, illustrating the use of Systems Thinking and Process Thinking to design better workflows.

As managers, we operate in a world of constant pressure. We must deliver results, meet targets, and support our teams, all while fighting the daily fires that inevitably erupt. It is easy to get trapped in a reactive cycle. We are so busy solving today's immediate problem that we lack the time to prevent tomorrow's. To break this cycle and make lasting improvements, we need a better way of looking at our work.

This is where two powerful ideas come into play: Systems Thinking and Process Thinking.

These are not just abstract theories for senior executives. They are practical tools that you, as a department or team manager, can use to solve complex problems and create a more efficient, effective, and resilient team. Understanding how to use them together is one of the most valuable skills in modern leadership. This guide will explore these ideas in depth, providing the details you need to apply them directly to your work.

Systems Thinking: Seeing the Big Picture

Systems Thinking is the discipline of seeing the whole, not just the individual parts. It views the organisation as a complex, interconnected network. Actions taken in one area create ripples that spread throughout the entire company, often with unintended consequences. For a manager, this means looking beyond your own team's borders to understand the wider context of your work.

Here are the core ideas of Systems Thinking, expanded for a manager's perspective:

An illustration representing Systems Thinking, where a business leader looks beyond individual parts to understand the whole interconnected network of their organization.

Everything is Connected. Your team is a vital part of a larger ecosystem. The quality of your work directly impacts the next team in the chain, and their work, in turn, impacts the team after that, all the way to the end customer. Consider a seemingly simple internal change, like a new expense approval policy from the Finance department. For a sales manager, this could mean that their team's expense claims are processed more slowly. This might reduce their ability to travel and meet clients, which could ultimately lead to a drop in sales. A systems thinker in Finance would ask, "How will this policy affect the teams that rely on it?" before making a change.
Actions Have Reactions (Feedback Loops). Our actions create cycles of cause and effect. Some loops reinforce change, while others balance it.
- A reinforcing loop creates a snowball effect. Imagine you invest in a new training program for your team. Their skills improve, leading to higher-quality work and fewer errors. This success frees up your time from fixing mistakes, allowing you to provide more coaching, which further improves their skills. This is a positive, upward spiral.
- A balancing loop pushes back against change to create stability. Imagine a push to increase production speed. Workers might start taking shortcuts to meet the new targets. This could lead to a minor quality issue or a safety incident, which in turn results in new, more stringent procedures that slow production back down. The system "balanced" itself, resisting the push for speed without a corresponding focus on quality. As a manager, your job is to spot these loops and nurture the positive ones while redesigning the negative ones.
Effects Can Be Delayed. We often judge our decisions by their immediate results, but the most significant consequences can take months or even years to appear. Opting for the cheapest software solution saves money this quarter. However, the hidden costs of poor integration, frequent crashes, and lost productivity from frustrated employees can make it a far more expensive choice in the long run. Systems thinkers learn to ask, "What are the potential consequences of this decision in one week, one quarter, and one year?"

Using Systems Thinking helps you diagnose the deep, underlying causes of problems instead of just treating the symptoms.

Process Thinking: Focusing on the Steps of Work

If Systems Thinking is the wide-angle lens, Process Thinking is the microscope. It focuses on the specific sequence of activities that transform an input into a valuable output for a customer. A "customer" can be an external client or an internal team that depends on your work. This is the "how" of value creation, and it's where managers can make the most immediate impact.

Let's explore the key ideas of Process Thinking in more detail:

A professional using a magnifying glass to inspect a business workflow, illustrating the use of Process Thinking to analyze steps and eliminate waste.

See the Whole Journey. A process cuts across many teams. The "Procure-to-Pay" process, for instance, involves far more than just the procurement department. It starts with an employee in any department needing a product, moves to their manager for approval, then to procurement to source a vendor, to the vendor for the invoice, to the receiving department to confirm delivery, and finally to accounts payable to make the payment. As a manager, you must understand your team's specific role in these larger, end-to-end journeys.

Focus on the Customer and Eliminate Waste. Every step in a process should add value that the customer is willing to pay for. Activities that are not considered waste (muda in Lean methodology). As a manager, you can train your team to spot these common types of waste:
- Waiting: Time spent waiting for the previous step to finish, for an approval, or for information.
- Overproduction: Doing work before it is needed, leading to excess inventory.
- Rework/Defects: Time and resources spent fixing mistakes.
- Excess Motion: People moving around unnecessarily due to poor layout or organisation.
- Over-processing: Doing more work than the customer requires (e.g., creating a detailed 20-page report when a one-page summary will do).
- Unnecessary Transport: Moving items or information from place to place without adding value.
- Excess Inventory: Having more materials or unfinished work than is needed, which hides problems.

Measure Your Work for Consistency. You cannot effectively manage what you do not measure. Process Thinking relies on data to understand performance and drive improvement. You don't need complex statistics to start. Simple metrics can be very powerful:
- Cycle Time: How long does it take to complete a process from start to finish?
- Error Rate: How often do defects or rework occur?
- Throughput: How many items can you complete in a given period?
- Customer Satisfaction: How does the recipient of your work rate the outcome?

How They Work Together: From Diagnosis to Cure

Using only one of these approaches is a recipe for failure. Systems Thinking without Process Thinking leads to grand strategies that never get implemented. Process Thinking without Systems Thinking leads to isolated improvements that can accidentally cause bigger problems elsewhere.

Let's revisit our example: customers are complaining about late deliveries.

The Systems Diagnosis (Finding the real "why"): Using a systems view, you discover that customer churn is 40% higher for clients whose first order was late. You also see that the sales team's commission plan heavily rewards closing new deals in the last week of the quarter, regardless of production capacity. This creates a huge, unmanageable spike in orders at the end of every quarter. The problem is not "late deliveries"; the problem is a system that incentivises a sales pattern that the rest of the company cannot support.

A graphic showing the interplay between the 'why' (Systems Thinking) and the 'how' (Process Thinking) to move from a business diagnosis to a cure.

The Process Solution (Defining the "how"): Now you use Process Thinking to find a precise solution.
1. Analyse the Sales Process: You work with the sales manager to introduce incentives for spreading deals throughout the quarter.
2. Analyse the Order Fulfilment Process: You use tools like Process Mining to analyse data from your IT systems. The data shows that 80% of delays occur at the "credit check" stage for new customers, which is overwhelmed during the end-of-quarter rush.
3. Implement a Better Process: You work with Finance to create an expedited credit check process for smaller deals or a pre-approval process that Sales can run earlier. You then use a Process Automation tool to automate the workflow, ensuring the new rules are followed consistently.

This integrated approach solves the problem at its root, creating a lasting, positive change for the entire company.

Ready to measure your Manual Work Index?

Putting It into Practice: First Steps for Managers

This may seem complex, but you can start small. Here is a simple, four-step plan:

1. Pick One Recurring Problem. Choose one issue that frustrates your team and disrupts your workflow every week.

2. Zoom Out (Systems View). Identify which other teams are affected by this problem or contribute to it. Schedule a brief 30-minute chat with the managers of those teams. Ask them: "When my team does X, how does it impact you?" Listen to their perspective.

3. Zoom In (Process View). Gather your team around a whiteboard. Together, map out the current steps of the process related to the problem. Focus on what actually happens, not what the official procedure says. Identify the bottlenecks, rework, and waiting times.

A four-step infographic for managers on how to put process improvement into practice: 1. Identify an Issue, 2. Analyze the Process, 3. Consider the System, and 4. Test and Refine.

4. Find One Small, Quick Win. Do not try to redesign the entire process at once. Identify one simple change you can make this week to eliminate a piece of waste or smooth out a single step. This builds momentum and shows your team that improvement is possible.

Measure the impact of your small change and, most importantly, communicate the success to your team and the other managers involved. This builds a coalition for change and starts to foster a culture of continuous improvement.

Conclusion

As a manager, your true power lies in your ability to shape how work gets done. By moving beyond daily fire-fighting and adopting these two complementary ways of thinking, you can fundamentally change your role. Systems Thinking allows you to see the big picture and identify the right problems to solve. Process Thinking provides you with the tools to analyze the details and design effective, lasting solutions.