Systems thinking
Leadership Development Program 2 > Module 3: Strategic Planning and Financial Management > Systems Thinking
Systems thinking – from siloed to systems thinking
Again, in this section we are learning not what to think but how to think. Scenario planning is often linked with systems thinking.
Systems thinking is a holistic approach to analysis that focuses on the way that a system’s constituent parts interrelate and how systems work over time and within the context of larger systems. Systems thinking is critical in how we run a mining operation which is one big, complex system made up of lots of sub systems.
Systems thinking in practice encourages us to explore inter-relationships (context and connections), perspectives (each person has their own unique perception of the situation) and boundaries (agreeing on scope, scale and what might constitute an improvement). Systems thinking is particularly useful in addressing complex or wicked problem situations (covered in Module 4). These problems cannot be solved by any one person, any more than a complex system can be fully understood from only one perspective. Moreover, because complex adaptive systems are continually evolving, systems thinking is oriented towards organizational and social learning – and adaptive management.
A simple example of a system in action
Watch: Introduction to systems thinking (5:11 mins)
My Father enjoyed tending to his vegetable garden when he retired from work. He noticed that a type of worm was eating his tomatoes. He went to the hardware store, bought some pest spray which killed the worms (linear thinking). However, while the worms were gone, a range of insects returned which ate both the tomatoes, some of the leaves and his other vegetables. He hadn’t viewed the problem (perspective) by understanding the wider system at play in the garden – the inter-relationships between plants and insects within a healthy, thriving vegetable garden (boundaries). Systems thinking and mapping helps us understand the wider issue and identify the underlying root cause – but importantly how by changing one element of a systems to consider what impact that may have on the whole systems or organisation.
Activity 7: Systems thinking and reoccurring problems
21st Century Mining Value Chain
If we step back and look at a mine such as Ok Tedi, we can view it as a whole system. Our ability to deliver value depends on our ability to manage, balance and make decisions across six capitals or value systems within a mine – financial, social, environmental, manufactured, social and intellectual capital. When you overlay business units, departments, technical issues, resource constraints, we start to appreciate the complexity you face every day running and optimizing the value from Ok Tedi. The 21st Century Mining Value Chain is a complex yet simplified view of the mining system that you need to manage.
Activity 8: General Manager capabilities
unintended consequences from not applying systems thinking in mining
Mines across the world (and their Managers) are all guilty of the following example at times (and some systemically). We have all been in situations where we need to play catch up to meet targets. For example, we need to deliver short term cash to achieve a target agreed with the Board. No one likes to miss targets so as responsible and reactive leaders we make the decision to high grade (deviate from the agreed mine schedule and life of mine plan) to target high grade ore. We send out of schedule, different, high grade ore to the Mill which plays havoc on equipment and availability.
However, being highly responsive the Processing Team react to the best of everyone’s ability, deliver good recovery which delivers a spike in metal sales and cash. The Marketing team respond and sell the extra product while prices are high. The Team metaphorically high-five (COVID safe) one another and continue on. Some mines and executives get hooked on constantly reacting. While short term and sometimes for example high grading is ok, we need to do so by understanding the short and long term implications on the wider system. We can find examples across an entire operation.
We will review and explore Ok Tedi’s entire mining value chain and system in Module 4.
Activity 9: Applying systems thinking to operations
Like scenario planning, systems thinking is a critical capability to delivering sustainable performance and operating as an effective senior leader. Read and reflect on the following article to continue to develop and strengthen your strategic thinking and systems thinking mindset.
