Hi, I'm John Byrd, and this is the fifth of six short video lectures about sustainability thinking. In this video, I want to talk about systems thinking. Often we think about cause and effect. The notion is, if you keep doing something we're going to get the same effect. We increase the cause, we got a response from the effect. Move the cause get the effect and so it goes. This is sort of a linear way of thinking. Maybe we do this because it's how we're programmed to operate as human beings. But unfortunately, the world is very rarely linear. Instead, it's complex, it's dynamic, it's nonlinear and constantly adapting and changing. It's really quite messy. If we think and make decisions based on simple linear cause and effect models, we're likely to be surprised in a bad way pretty often. This is how unintended consequences arise. We have a simple model that leaves out a lot of the complexity of the real world. Systems thinking tries to identify connections and drivers beyond a simple model. A systems model will still leave out a lot of things, but it'll be a lot closer, almost always, than a simple linear model. And if we're lucky and smart, it'll include the most important factors and that will allow us to make some reasonable forecasts. Of course, overtime, the world will change and adapt and our system model will be less accurate and will need some sort of twiking. Systems thinking, or systems theory, can be incredibly complicated. I'm going to try to keep it very simple, no equations, no calculations, we'll walk through a system models together. I hope that it will give you enough of an introduction so that you might be able to apply simple systems thinking to the issues you're examining. Let's suppose a small company has developed a product that suddenly becomes very, very popular. So sales have increased and the company is having trouble fulfilling all these sales. A simple solution to this problem is to simply have employees work overtime. Paying employees a premium to work overtime will reduce profit a little bit but the company accepts that extra costs because they're still making a profit on every sale. This sample model says, if sales increase have employees work overtime and make more profit. If sales increase more, have people work more overtime and earning more profits and on, and on and on. Now, let's apply a little bit system sinking to this problem. Let's begin to think about the effects of overtime on the company. Imagine that we have a container, like a bathtub, and that container reflects our employee's ability to handle overtime work. At the start, the container's full, because initially employees can handle the extra work and they probably enjoy earning some extra money. Overtime, however, working those extra hours becomes more and more difficult. So the ability of employees to handle the extra work is going down. Our bathtub of water represents the employee's ability to handle work, and now the water level's going down. If we keep demanding more and more overtime work, we drain the employees of their energy. And their ability and their enthusiasm for working overtime. Well, think about this for a second. Imagine that you're in a situation and instead of working 40 hours a week, you're being asked to work 50 or 55 hours a week. Let's make a list of what could happen. Fatigue sets in and people begin to make mistakes. These mistakes can cause accidents. So safety becomes an issue. Mistakes can cause more waste or for product quality to go down. Fatigue can mean that it takes longer to complete a task which changes the product's cost structure. Overusing the machines means that they're not maintained properly. When they start to break down, lose their calibration, or their precision. Employees may need to rest or have things to do other than work. So they begin to call in sick. If employees become very stressed they may look for different jobs. We don't want our employees to look like this. All of these possibilities, in private, productivity and profitability will go down, if we exceed to ability of employees to handle the extra work. If sales growth is so high, that it is likely to exceed the ability of the employees to adapt to this new situation. Then, we need to go back and think about hiring more people and expanding our production facilities. There's some point beyond which relaying on employees working overtime is detrimental to the employees and to our company and to is profitability. A simple model would never have suggest it. That there was a breaking point. Remember, that model just said to increase production we just use more and more overtime. Our systems model shows that relying on overtime has limits, and exceeding those limits can cause problems. Our systems model cannot tell us how much overtime is too much. We don't know if it's 5 hours of overtime a week, or 10 hours, or 15 hours. But what it does tell us? Is that we need to talk to the employees. We're working overtime to make sure they're doing okay. Remember back to our lecture long time thinking, one of our conclusion was that being fair or nice was almost always a winning strategy. Exploiting employees. We're taking advantage of them or stressing them out, might benefit the company in the short term but has a long term strategy it almost always fails. Our systems model shows us what this type of failure looks like, if we want to have a respected and enduring company We have to treat our employees fairly. That means not asking them not to work more than they're able to. Some overtime now and then is fine but too much results in serious costs for the company. If we were using a simple linear model, these costs might be surprises. We might call them unintended consequences. But by thinking more broadly, more system wide, we can begin to figure out what some of these consequences are and avoid the bad ones. Systems thinking gives us a way to begin to identify connections and the drivers of outcomes. So we need to think system-wide and we need to look for the important relationships of the decisions that we're trying to make. Next, we're going to talk about context. That will be the last of these sustainability thinking lectures. And I think it's going to be the most important. And hopefully, it will be the most interesting for you. Thank you.
