System ThinkingSystem Thinking

Simulation & Modeling

Kardi Teknomo, PhD

Kardi Teknomo, PhD

Overview Why system matter

System Thinking System Thinking1. Holistic (Integrated) Solution2 Long Term Gain Solution2. Long Term Gain Solution3. Win-Win Solution

Game of System Thinking Game of System Thinking Objective:

By the end of this lesson, you will be motivatedBy the end of this lesson, you will be motivated to think about system rather than parts

Kardi Teknomo, PhD

0. Why System Matter?

GM closes plant in Fremont, California (1982)(1982) Worst quality record

W t l b l ti Worst labor relations Highest employee absenteeism and drug use

Toyota opens Fremont plant in 1984y p p Hires 80% of GMs workforce Outstanding quality recordOutstanding quality record

Kardi Teknomo, PhD

1. System Thinking

An approach for developing models to promote our understanding of eventspromote our understanding of events, patterns of behavior resulting in the events and even more importantly theevents, and even more importantly, the underlying structure responsible for the patterns of behaviorpatterns of behavior

Kardi Teknomo, PhD

Three Solutions of System Thinking

1. Holistic (Integrated) SolutionL T G i S l ti2. Long Term Gain Solution

3. Win-Win Solution

Kardi Teknomo, PhD

1+1 >< 2

Why is the whole less than the sum of its parts?parts? 2 software developers work together will

produce less code than if they workproduce less code than if they work separately

Why cant the whole be MORE than the f it t ?sum of its parts?

Kardi Teknomo, PhD

Discussion Preparation Form a discussion group (divide the class into

4-6 groups)

Select any system (social, politic, education, physical biology etc) that you are interested tophysical, biology etc) that you are interested to discuss

Write the result of discussion & report to the class

The same discussion topic will be continued within this class and next classes

Kardi Teknomo, PhD

Discussion: Specify Common Problem

Think of any problems in your society or family or company or organizationfamily or company or organization.

What are the common problems?

Kardi Teknomo, PhD

Common Problems

Why is the whole less than the sum of its parts?parts? Focus on the short term gain

W k l th t Work only on the parts

They do their best to fight for its share of limited resourcesD i b t i t h Doing your best is not enough

Kardi Teknomo, PhD

System Thinkers Solution 1

Holistic approach

Pay attention to the interactions between parts rather than the parts themselves

To manage a system we need to manage the interactions between componentsthe interactions between components

Kardi Teknomo, PhD

Separate Improvement Destroy a System

System may be destroyed by separately improving the performance of one orimproving the performance of one or more of their parts

Example: Business traveller wants to save travel department money use cheaptravel department money, use cheap airline connections: cost more time and impacting his or her performance and p g pfinally damage the purpose of business travel

Kardi Teknomo, PhD

Departmental Saving Problem

Each department head proudly tell of their cost saving and profittheir cost saving and profit

What they forget is that each cost saving What they forget is that each cost saving is done by eliminating services from otherbusiness unitsbusiness units

At the end the net cost for the company At the end, the net cost for the company as whole increases and the net company profit decreasesprofit decreases

Kardi Teknomo, PhD

Orchestra

In orchestra, the players are not there to play solos as prima donnas each oneplay solos as prima donnas, each one trying to catch the ear of the listener

They are there to support each other

How about in your organization or family How about in your organization or family or country? Each supporting each other or just collection of prima donnas?or just collection of prima donnas?

Kardi Teknomo, PhD

System Thinkers Solution 2

Long term vision

Focus on the long term profits or benefit of the system as whole

Kardi Teknomo, PhD

Short Term

Short term thinking will lead to crisis over crisis Firefighting is rewarded even as the next fire starts Firefighting is rewarded, even as the next fire starts

buring Focus on quarterly profit statement to look good at the

expense of the future Fear of the next quarterly statement

F f th t f i l Fear of the next performance appraisal Fear of diminishing resources

Any person, with sufficient pressure, can achieve any given target number through distortion, shifting costs to others or outright falsification

Kardi Teknomo, PhD

Long Term

Long term success and winning environment for all come with systemenvironment for all come with system thinking in practice

Kardi Teknomo, PhD

System Thinkers Solution 3

Cooperation

Work to achieve Win-Win results

I t t d t f i t f Integrated management for improvement of synergy that allows individuals working within a system to achieve far more than the indiviualsystem to achieve far more than the indiviual themselves could have acieved.

Kardi Teknomo, PhD

Group and not Individual

W t t i di id l We cannot separate an individual componet from its performance appraisal, b t i i i i di id l bbut we can minimize individual bonuses(pay for the performance)

Group effort is encouraged, with p g ,participation by th workforce and leadership by managementp y g

Kardi Teknomo, PhD

Intrinsic Motivation

Build bigger pie rather than fight over the piecespieces

Employees develop pride and joy at their work insted of merely chasing the latest bonus or trying to avoid blame and the latest retribution

Kardi Teknomo, PhD

Summary

We are great at managing pieces and parts, and attempt to optimize the whole byand attempt to optimize the whole by optimizing individual parts.

Systems Thinking integrates to a higher whole rather than dissecting to lower levelsg

Kardi Teknomo, PhD

Discussion: Applying System Thinking

In your chosen system, how can you apply system thinking?apply system thinking?

In what way do you think your new h ill b b fi i l?approach will be beneficial?

Kardi Teknomo, PhD

Bonus: Game of System Thinking

The purpose of this game is to reveal system thinking through cooperationsystem thinking through cooperation, competition, trust and negotiation

You can cooperate, or betray other teams

Please do not feel bad if your team is Please do not feel bad if your team is betrayed by others. It is only game

Kardi Teknomo, PhD

Game of System Thinking Game preparation: The class is divided into 4 teams Give name to our team Each round:

h ll d b h h Each team will discuss about what to vote within a team

You are not allow to discuss the vote between teams Write the vote in the paper together with your team

name We will play for 8 roundsWe will play for 8 rounds Only at round 3, and 6, each team

representative can discuss between team

Kardi Teknomo, PhD

Game of System Thinking

Objective: G t th hi h t f t Get the highest score for your team.

Rule of the game: You can either vote for X or for Y, not both. If all teams vote Y, no team get any point If all teams vote X, each team get 4 points If there is a mixture of vote, those who vote

X get nothing but those who vote for Y get 5 points

Kardi Teknomo, PhD

Discussion after game

What did you learn from this game?

If you have high trust and highly cooperate, overall score up to 128

Compute the total score for each round and for all rounds (I will write in theand for all rounds (I will write in the white board)

Kardi Teknomo, PhD

Follow Up Game of System Thinking

We will play again 8 more rounds

However, now let us change the objective of the game

Instead of getting highest score for your team the objective is to obtain theteam, the objective is to obtain the highest overall score for all rounds.