Instrumented Interconnecteds Intelligent

By Bridget van Kralingen
General Manager, IBM North America

bridget van Kralingen Photo(large)This week, IBM is hosting THINK: A Forum on the Future of Leadership in New York City, where IBM was born 100 years ago.  The Forum will examine the deep, structural changes confronting the world’s systems to drive progress in business and society. (Editor’s note: come back tomorrow and Wednesday for live blogging from the event.)

Governments and organizations are infusing intelligence into every aspect of how the world works.  Such “smart” technology affects everything from how we develop, manufacture, buy and sell physical goods, to how we provide services to improve the way billions of people work and live.

Such a change to our daily lives gives us greater appreciation for how technology, societal trends, economics and scientific discovery intersect, and how big, complex systems provide new avenues for progress.

The rise of expansive systems across the world — think of them as “systems of systems” — inspires new kinds of leadership lessons: how to tackle a complex city planning issue where no one individual or organization has exclusive control; or how to navigate a smart grid project — where to start, and how fast to move.  Such new approaches to leadership may vary in detail and timing, but they share common traits that pave a pathway to success. For organizations and leaders who can see the possibility in our increasingly interconnected world, the options require a new type of thinking: systems thinking.

What is systems thinking?

Systems thinking examines how the world’s ecosystems fit together — not just information technology systems, but organizational, political and societal systems as well.  Like its people, the world’s systems are becoming increasingly interconnected.  Whereas 200 years ago we used to grow our own food, now vast global supply chain systems bring those same foods to our grocery stores and our tables.  Whether we ride a bus or drive in our cars, we are part of a system of traffic that is a product of infrastructure such as roads and traffic signals, and intangibles like the weather.

It is easy to see the benefits of interconnected systems as we talk on smart phones that link us to our banks, our music, our work and our family. But these linkages are not always beneficial or foreseeable.  The financial crisis showed how globally financial systems and supply chains can create a cascading reaction of systems —some intended and some not—based on a series of complex linkages.

But complex systems can be a catalyst for innovation.  Consider the city of Portland, Oregon, which is developing a city roadmap for the next 25 years. Portland is modeling the relationships among the city’s core systems — economic, housing, education, public safety, transportation and healthcare — while examining how new policies in one part of the city impact others. Portland plans to reduce carbon emissions by 40% by 2030, and by 80% by 2050.

So the city is shifting some transportation away from driving to “active transportation” such as walking and biking as a way to help meet those goals. However, when the city analyzed how this increase in active transportation was affecting local citizens, it found that obesity levels declined as more people walked and biked.  And as obesity levels declined, active transportation became a more attractive option to more people. This created a “feedback loop” to produce a reliable cycle of improvement for Portland’s residents.

Successful leaders need to be systems thinkers who are open to developing a variety of new skills.  They must gain consensus across broad and unfamiliar constituencies.  They must deal with the complexity of unintended consequences. They must find the right leverage points and see where actions and changes can lead to lasting improvements. They must ask the right questions and learn the new rules of engagement in order to stake out leadership for the future.

For another perspective, here is Peter Senge, Professor, Leadership and Sustainability at MIT and author of The Fifth Discipline, talking about systems thinking and what it means for leadership:

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