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Commercial awareness
Commercial awareness

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6 Thinking in systems

Through our discussion of value chains and interdependencies we’ve reached a good place to highlight an important distinction between ways of looking at and thinking about business. These ways are not mutually exclusive – indeed, it is strongly advised that to be commercially aware, managers should be adept at many different methods of analysis. To introduce the two broad approaches for contrast:

  • Reductionist approaches: these reduce or break down issues into smaller chunks. In the process much of the real-world complexity of an issue can be lost. The benefit of this approach is that you can focus on a small scale, look at individual problems which are well-defined and (often) easier to deal with in isolation from the ‘mess’ of the rest of the organisation.
  • Systems approaches: these refuse to strip down issues into something less complex. A much larger-scale, holistic system is considered in which there are multiple causes, with different aspects of the organisation interacting with other aspects in ways that are hard to pin down. Often the problems tackled in systems thinking remain ill-defined – but the level of analysis is wider and recognises the richness of interaction across an organisation.

Within your organisation or industry you may be a skilled professional – someone experienced in a particular field or line of work. Your substantive role may be to apply specialist expertise for the benefit of the organisation and its clients or customers. There will be things which you can do much better than your colleagues – qualities that you are called on to display and make use of. In that respect we are, each of us, ‘experts’ – and to fulfil our specific roles it is inevitable that we often adopt a reductionist attitude to our own business.

If you continuously and exclusively think in whole-system terms you may not get the low-level, well-defined portion of your workload completed. However, whilst your expertise may be vital to fulfilling your role – the very reason you are employed as you are – it is only part of the story when it comes to being commercially aware. Full commercial awareness requires far more systems thinking than you may have realised when training or studying for the profession you now find yourself in.

Optional activity: Short introduction to systems thinking

Timing: Allow 5 minutes

To extend your understanding of this section of the course, you may wish to view an introductory video on systems thinking such as Video 2. Towards the end of the video is an example of how a systems approach might be adopted in car design.

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Video 2 Systems thinking
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The final two sections of this course are made up of two activities. Both activities should reinforce the notion of the organisation as a complex system.