Systems Thinking, Part 1: Building Product Resilience to Bypass Disaster
In this 3-part series, we will look at how to apply elements of systems thinking to the problems of resilience, sustainability, and leadership in Product Management.
When the pandemic hit, many business owners were faced with huge challenges they had no way of predicting. Owners asked themselves, “how do I conduct my business now?” The towering statistics were not in their favor. According to the U.S. Small Business Administration, over 90% of companies fail within two years of being struck by a disaster. Beefing up your product resilience will help prepare you for adversity, before disaster strikes.
Part 1: Enhancing Your Product Resilience
Resilience is a measure of your ability to survive, persist, and even thrive within a variable environment. The year 2020 reminded Product Managers that our environments are extremely variable, and that surviving market, customer, and internal changes is no easy task. And even if your company has made it through 2020, FEMA failure rates for small businesses at 1 and 2 years after a disaster remain at a staggering 20% and 90% respectively. Resilience Theory suggests that it is not the detailed nature of adversity that determines your survival, but instead how you approach adversity. But how you approach adversity depends on how you set up your environment, and for that, I recommend that you turn to systems thinking.
What is Systems Thinking?
Systems thinking is the process of looking at the world holistically rather than as discreet components. It has been used to tackle “wicked problems” like those that:
- Don’t have quantifiable answers and may even have a broad range of solutions, each with its own range of possible consequences.
- Are otherwise unsolvable by traditional means.
Systems thinking shifts the focus from individual components of a system, such as your product, your customer, or your team, and instead looks at the relationships between these components. These relationships can be relations between people or the processes that link parts of an organization together, such as planning or reporting processes, or networks like internal or external social networks. Once you start looking at how components in your system interact, you will notice which of these relationships are rigid and which are flexible—start to ask yourself why they are that way. While the shift from a component-focus to a focus on the linkages between the components may seem subtle, the impact can be immense.
For example, when the scale of Coronavirus became obvious, traditional problem-solvers asked, “how do I conduct my business now?” Conversely, system thinkers asked, “what do my customers need right now, what can I do to help them, how are these related, and how will it affect my business?”
It’s More Than Just Putting Your Customers First
While putting the relationship with your customers in the forefront is always a good idea, customers are just one of the many components of the complex product management system; No Product Manager is an island—our relationship with each one of these components needs our care and attention. Consider the following components, each constantly shifting yet all coming together in your product:
- Competitive landscape
- Social, economic, political, technological, environmental, and legal forces
- Buyer, users, influencers, distributors, retailers, and other critical customer roles
- People designing and implementing the whole product
Internal Ecosystem for product delivery
- The marketing, sales, legal, finance, support, supply chain, administrative, and other teams who impact the overall delivery of the product from the company to the market
- Funding for product initiatives
External Ecosystem for product delivery
- Channel partners
- Analysts and Influencers
- Associations and strategic alliances
- The vision, strategy, and goals of the organization, which your product contributes to
Combining resilience theory with systems thinking brings us to the simple realization that during any adversity we must tend to the relationships between the components of the system and support those relationships, or build new relationships, in new ways, to survive the adversity.
Called pivoting, reinventing, or adapting, companies who did this successfully during the pandemic let go of attachments to what they had before (often abandoning a previously successful product). They challenged themselves to meet new market needs using core competencies blended with new tools and techniques. Did they do this through data-driven analysis and top-down command and control? No. They did it by trusting the relationships they had in place and asking those people to join them in something new. Let’s take a look…
Flying Elephant Productions: How Did They Survive?
Flying Elephant Productions is a builder of event stages and props in Ireland. By March 2020, with a cancellation of 60 contracts and no incoming work, it was clear the pandemic was threatening an early death for them. When an employee’s friend needed a desk to work from home, Flying Elephant realized they had raw materials and outstanding design skills, so they built them a desk.
There are many desk-makers out there—so, what made their desk special? Dedicated to sustainability and experts at constructing sturdy sets that could be transported easily and raised and broken down quickly, the desk they built was flat packed, assembled in one minute with NO tools required, sustainably constructed, and perfectly sized. One month later they had sold 2,000 more desks with a steady stream of orders and a new line of wood-based home organization products. They are now planning a line of sanitizer stations for expected demand as society opens again.
Success in systems thinking
To pivot this quickly relies on more than just a good idea—it requires strong relationships and linkages between organizational components, which is the core of systems thinking. For example, Flying Elephant listened to the market, in this case, a completely different group of customers, so they could recognize a good idea in front of them. It required understanding the core competencies of their organization and a relationship that supported their team inventing something new from that core. It also required a relationship with management to green-light risky projects with new business models and little data to support the decision. And it required tremendous internal teamwork to open new channels to reach new customers with new products—almost overnight.
The common element is trust. Trusting relationships, and processes that were built on trust allowed all parts of the organization to listen, create, decide, risk, and move quickly. You cannot build this trust when needed—it must be part of the fabric of the organization before adversity strikes. This is the magic behind resilience—trusted relationships have far greater flexibility than rigid processes.
5 Tools to Build Up Resilience
Systems thinking has many tools and recommendations for helping you build up trust and develop resilience, before the next adversity hits:
- Invest in Qualitative Research
Quantitative research is valuable but can hide important information about behaviors. Balance quantitative data with qualitative data to learn why the numbers are the way they are.
- Establish Feedback and Feedforward Loops for all relationships
Feedback means listening, feedforward means communicating out to people. Since we tend to talk more than we listen, get in the habit of listening more, and communicating timely with valuable information. The right loops, at the right time, can keep your system healthy, inform you early of any disturbances, and generate trust.
- Clarify Goals for all relationships
All healthy relationships have goals, even if the goal is to remain healthy. A market goal may be to increase market share, a customer goal to increase NPS, but what about goals with your internal teams? Make connections and set goals together, you’ll be surprised at the positive responses.
- Build up Buffers
“Cutting the fat” is one thing but trimming your company to the bare minimum leaves no flexibility in addressing adversity. Buffers—whether it is in cash, people, technology, or any other resource, can provide a needed edge in weathering storms.
- Watch out for Nonlinearities
A little fertilizer for a plant is good, a lot will kill it. Don’t keep doing the same thing and expect the same results all the time—be alert to changes that show something isn’t working anymore.
This is a powerful list of tools, but most of these will take time and commitment to put to work. Think about which might be easiest to get started with at your company and start there.
Build Resilience Now to Bypass Disaster Later
Resilience is difficult to see—you must experience adversity to know if you have it. Because of this, many leaders mistake consistency for resilience. Oscillations may be normal for your system but forcing stability while sacrificing resilience may cost you dearly in the end. If you want to know if you have resilience, determine not only the talent level of your teams, but how many deeply trusting relationships exist in and around your product.
Need help evaluating your company’s resilience or utilizing the tools above to build it up? Contact us to learn more about how 280 Group can help you with systems thinking.
About the Author
Colleen O’Rourke is a Principal Consultant/Trainer at 280 Group.
Colleen has 20 years of experience in the technology business, working in engineering as well as program and product management in startups to Fortune 500 companies. Colleen’s diverse experience includes complex CAD software platforms, project management SAAS systems, and hardware products and consumables manufactured in the US. 280 Group is the world’s leading Product Management training and consulting firm. We help companies and individuals do GREAT Product Management and Product Marketing using our Optimal Product Process™.