When you build a company, what you’re really building is a system.
A system of inputs and outputs, stocks and flows.
And if you play your cards right, that system will do what you want, you’ll be very successful and you can retire on a pile of money.
But of course, getting your system dialed in and working exactly as it should, is incredibly difficult for a host of reasons.
More often than not, your system will sputter, and you’ll run into issues that need to be solved.
It’s these issues I want to talk about today.
We tend to take most issues in a company at face value. Something happened, and something else needs to happen to solve it.
Unfortunately, this rarely leads to long-term solutions.
Great leaders know this, and take a systems thinking approach instead.
They think like a systems engineer, working to solve a systems issue.
There are many practical implications to this, but he core of it is this:
When facing issues, system thinkers approach them from both a macro and a micro perspective.
Let me tell you what I mean by this
🦅 The Macro Perspective
From a systems perspective, any issue that pops up means that the system is not working as intended.
Taking a macro perspective simply means zooming out, and regarding the system from a birds-eye-view.
- What are the goals and major functions of the system?
- Where in the system does the problem occur?
- What other system functions are related to this issue?
- How does this issue impact the effectiveness of the overal system in achieving its goals?
By asking these types of questions, you ensure that you’re not tackling the problem on the wrong level.
🪱 The Micro Perspective
From a systems perspective, any issue that becomes visible is most likely to be a symptom rather than a cause.
Taking a micro perspective means zooming in, and finding the root cause of the issue.
One way to do this is to ask “why?” five times, in order to find the level where an intervention will actually solve the cause of the issue, rather than the symptoms.
The Systems Approach In Practice
To give you a real example, I worked with a company where the business development team was tasked with finding appropriate partners that could help bring the product to a wider audience.
A profile of potential partners had been identified, but they were having a hard time closing partnerships.
This surface level problem initially generated a surface level solution: approach more clients, the sales version of “work harder”.
Zooming out, however, yielded the insight that the product was facing a similar lack of adoption on the consumer side.
The partnerships were devised as a partial solution to this lagging adoption, to spread the risk.
It was becoming clear that both approaches likely shared a similar, underlying problem.
Zooming in, it was immediately obvious that partnerships lagged because potential partners didn’t love the product.
Why? Because it wasn’t a clear match for their own audiences.
Why? Because the product was not made with any clearly defined audience in mind.
Why? Because the founders were hoping to appeal to a mass market.
Why? Because they figured offering a low price point compared to their competitors would be appealing enough to draw customers in.
Oh boy.
In this case, both the macro and micro perspective led to the same conclusion, which was that the overall strategy of the company needed to be revisited.
Did they truly want to be a small fish in a big pond, competing on price only, or would it be better to niche down, and become a big fish in a small pond?
The Takeaway
You won’t really solve any issues in your company if you tackle them on a surface level.
Taking a systems thinking approach makes it much more likely that you are solving the right issues in the right way.
A great place to start is to apply both a macro and a micro perspective to your issues, and see where you end up.
If you do, I guarantee you two things will happen:
- You’ll run into some surprises
- You will finally fix some of your company’s longest standing issues
Try it out, and let me know how it goes.
Good luck!