What is systems thinking?

Q. How can we apply systems thinking and what is its relevance to the circular economy?

We’ve always had systems – a steam engine is a system, in that it’s a connection of interacting components with a purpose. The aim of the steam engine is to turn the wheels and, with that, pull the carriages. This is a narrow example of a mechanical and predictable system – where one pulls the levers, feeds the engine and gets the result. Train drivers will tell you there is an art to this, which gives us a hint about other systems that are not under our control. Coal burns in the steam engine’s fire, and the intensity varies. It depends on the quality of the coal, the amount put in, and the speed at which the train is travelling. These systems are much harder to manage, that is why we call it an art.

For a long time, and ever since Newton described the universe as being like clockwork, we assumed the world was a bit like a machine. We have assumed that, in principle, we can understand, predict, control and literally engineer the result we want. This was very useful. It took us to the Moon. But, almost all real world systems are nothing like machine systems. We need to understand the context much better.

The economy is often thought of as a machine to process resources. It is thought that the more efficient we make the machine, the better off everyone will be. Some people even think that X marks the spot: a supply and demand diagram tells us where the most efficient position will be. However, this is very simplistic.

Not worrying about where resources come from, because the machine is efficient, is only looking at part of the picture. The big picture is that feedback from too much resource extraction and feedback from too much waste, do impact the economy in very damaging ways. We know this now. The circular economy uses understanding the system to give a better overall result. You can’t ignore the feedback, it’s real. Just because it is not in your model or idea – doesn’t take away the issue. So, systems thinking really is understanding bigger contexts over longer periods and looking at the connections, not the parts, for insights.

We are looking for patterns, not certainty, because certainty does not exist, but the pattern gives us insight about which direction to move in. A circular economy reflects this more contemporary scientific understanding of how the world works.

Q. How can we use this methodology to solve problems in the economy effectively?

The challenge of systems thinking is that our habit of thought is always to look for an immediate cause and effect. “He crashed the car because he didn’t brake.” But why didn’t he brake? What were the other factors? Did he have a row with his partner? Was his blood sugar low? Does he have eyesight problems? Was there a bumble bee in the car?

The point is that the most obvious, proximate cause of a problem may not be the one that is the most effective one to solve.

Waste might be better solved by designing out the use of the product. For example, an iPhone carries at least ten or more regularly used products inside. There may be end of (first) life issues with an iPhone, but when is the last time you saw someone carrying a camera, compass, calculator, or torch? Replacing something with nothing is a great solution for the system as a whole. These products have been designed out along with the waste that comes with them.

Intervening in a system is one of the hardest questions to answer, as you have to look at all the indirect causes. A report from Alfred Rosenfeld of Berkeley Labs – a world expert on energy efficiency – noted long ago that if the Chinese had issued instructions to manufacturers of pumps and refrigeration units to up their energy efficiency to best practice , then the Three Gorges Dam need not have been built. So, a seemingly mundane solution, sending a few hundred letters, could have been more effective, and would have avoided arguments over a large dam construction and the displacement of people.

Q. So how can people know where to start when it comes to systems thinking? How do we break free from habitual thinking and take things forward?

This indirect causation makes it difficult to know where to intervene in the system, because people expect visible action. They are used to reacting to cause and effect. Having a different perspective on how the world works doesn’t sound like taking action – but, as John Maynard Keynes once famously said, the difficulty lies not so much in developing new ideas as in escaping from old ones.

So we have to get used to a new idea, but more importantly, we have to be convinced that it is worth letting go of the old one. In that way, thinking is action – and the circular economy is busy exploring the rationale for us to abandon the habits of thought with which we have grown up.

Q. Are there examples of where systems thinking has already proven successful?

As mentioned earlier, the iPhone – although it’s trivial in a way. And we must not forget autonomous and electric vehicles that, thanks to smartphones, give the promise to combine mobility with an integrated accessible public transport system, e.g. buses, bikes, trams etc, making cities far more accessible.

It isn’t about giving everyone a car and building roads to match that assumption (which proved to be the very opposite of intelligent systems thinking).

The problem was people needed effective mobility to get from A to B. In the 1950s and 60s, we were told, “Get a car. We’ll give you roads!” We assumed that the idea was brilliant, and all we had to do was make the system better for the individual car. But the problem really lay in mobility and access. This is why cities are being revived so successfully, because we have the promise of living densely, in walkable connected communities, without s sacrificing urban space to cars and the inevitable pollution.

We are now designing for mobility, NOT around the car. The renowned entrepreneur, Elon Musk, of Tesla Motors (amongst others), has seen the potential and is developing autonomous driving and emission-free vehicles. This is a long way from selling a car to an individual as an aim in itself. He has pointed towards more effective mobility. He started with a car but has always had his sights on the bigger system and he is one of the poster children for systems thinking in the tech-orientated field.