logo
Today's Most Crucial Leadership Skill Is Systems Thinking

Today's Most Crucial Leadership Skill Is Systems Thinking

Forbes25-04-2025

Map the system
In the face of global uncertainty, how are top executives and board members delivering genuine insights for their organisations? The answer is systems thinking: arguably the most crucial skill in today's strategy toolkit. As geopolitical tensions, technological change, and economic shifts move quickly and unpredictably, understanding how your business relates to a web of interconnected systems is essential for decision-making. Systems thinking enables leaders to see beyond isolated events and identify the underlying patterns and feedback loops that drive outcomes. It is, in essence, a framework for navigating complexity.
At its core, systems thinking is an approach to strategy that focuses on shifting the conditions holding a problem in place. Recent examples of such 'problems' include fragility in global supply chains, challenges with governance of AI and technology, widespread mental health complications affecting employment, and intensified environmental strain ranging from water scarcity to pollution. Each of these problems impacts business and is impacted by business in turn. However, it is not always clear how a firm should direct its resources towards mitigating risk from such challenges, let alone seeking to resolve them.
Systems thinking enables leaders to recognize the dynamic relationships within and around their organization, focusing on root causes rather than symptoms. The concept, developed by systems theorists including Donella Meadows, provides practical tools for mapping the complex systems that affect your organization's sustainability and success. This holistic approach enables leaders to anticipate unintended outcomes and identify smart leverage points on which their organizations can focus resources.
In today's volatile, uncertain, complex, and ambiguous (VUCA) world, the need for systems thinking is more pressing than ever. Businesses that fail to account for the broader context of their environment find themselves blindsided by change and fail to capture significant opportunities for sustainable value creation.
Global risk reports highlight the unpredictability of today's political, economic, and environmental landscapes. The World Economic Forum's Global Risks Report consistently underscores the interconnectedness of risks, including cyber threats, political instability, and diminished trust in institutions. The 2025 report not only presents global risks in the familiar form of a ranked list to which leaders have become accustomed, but also as a visually compelling map depicting the connection between risks. This change – from a list-based view of outcomes to a focus on their strategic links – epitomizes the mindset shift that makes systems thinking a powerful tool for strategy.
Systems are 'a set of things… interconnected in such a way that they produce their own pattern of behaviour over time'. This is a core insight of systems thinking: systems, by definition, have emergent properties that no one within the system designs or even anticipates. For this reason, it is essential to approach systems challenges with tools that equip your organization to understand how the outcomes your business observes are generated at the systems level. Without systems thinking, interconnected challenges can overwhelm leaders and organizations, leading to reactive and ineffective responses, and even responses that perpetuate the problem.
Working with resources such as the open-source Omidyar Systems Practice Workbook or Meadows' iconic Thinking in Systems: A Primer, you and your teams can become confident in your ability to lead effectively and navigate complexity through a systems-based lens. While systems thinking offers a wide range of approaches and methodologies, five core pillars of systems thinking are:
The ability to think systemically is no longer a nice-to-have for leaders. It is a crucial capability for leading a sustainable, credible business in today's unpredictable world. Systems thinking has a home in the curriculum of every business school. With the interconnectedness of global risks, leaders who embrace systems thinking will not only understand how their company operates within the broader system but also be able to anticipate change and lead their industries. Systems thinking tools, including good problem statements, comprehensive stakeholder mapping, smart iceberg analysis, and well-designed causal loops, are gold dust for strategy in today's world. But the most important contribution of systems thinking – the ability to see the context in which your organization sits – is the true distinctive that will enable you to lead for sustainable growth in an uncertain future.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

From idea to impact: How Yes SF continues to spur a new wave of innovation in San Francisco
From idea to impact: How Yes SF continues to spur a new wave of innovation in San Francisco

Business Journals

time8 hours ago

  • Business Journals

From idea to impact: How Yes SF continues to spur a new wave of innovation in San Francisco

When Deloitte collaborated with the World Economic Forum, Salesforce, Citi, and the San Francisco Chamber of Commerce to launch the Yes SF initiative in 2023, it was a bit of an experiment in and of itself. The goal? To help revitalize downtown San Francisco by elevating and supporting the growth of leading innovations in urban sustainability and cultivate an ecosystem of organizations to deploy those solutions locally, while supporting innovators through the revitalization jump-starting a local network of start-ups that could spur economic growth and diversify the economy in a way that is better for people and the planet. Just over two years later, the experiment is producing results. Yes SF is spurring a movement The program began as an innovation challenge calling for solutions to many of San Francisco's sustainability and revitalization goals. Fourteen companies — 'Top Innovators' — were chosen from 150 applicants. Since the program's inception, more than $60 million has been invested in San Francisco and many of these Top Innovators, and the momentum continues to build. For example, Butlr, which creates thermal, privacy-first sensors, is now deployed in the Salesforce Tower. it's electric recently launched a new wave of curbside EV charging stations in the city. And BluumBio, Flower Turbines, Urban Machine, Zauben, and more are expanding their presence with local hires and new deployments that are helping to spur San Francisco's economy. Meet the second cohort: Where sustainability meets AI In April, Yes SF announced its second cohort of Top Innovators. The new cohort is centered at the intersection of sustainability and AI. Top Innovators are harnessing data and cutting-edge technology to tackle daunting challenges such as resource management (including energy generation and efficiency and biodegradable packaging) as well as transportation and mobility (including microgrids and autonomous last-mile delivery solutions). The program intentionally choses startups that are early stage but ready to deploy. And, with the broad support Yes SF provides, these founders can build here and help advance the city's collective journey toward urban transformation and sustainability. What companies are getting — and giving back One of the most powerful roles Yes SF plays is convening and connecting San Francisco's innovation ecosystem. When the program began, I don't think any of us anticipated just how deeply the community would lean in. Today, nearly 60 organizations have joined the program, including large corporations and community institutions offering everything from research and development space to marketing support and mentorship. Thanks to the San Francisco Chamber of Commerce, Top Innovators can participate in information sessions related to doing business in San Francisco, get help navigating the permitting process, and receive support to build and scale their solutions. They also get visibility at events like Dreamforce, San Francisco Climate Week, and even the World Economic Forum Annual Meeting in Davos. That combination of practical support and high-level visibility helps make this initiative quite powerful. Why I'm more hopeful than ever I've spent my career working across the private, public, and social sectors — and I've always believed in the power of collaboration. Yes SF has become a shining example of what's possible when you bring various players to the table. I remain confident in San Francisco's future. I see the energy downtown. I see the collaboration across sectors. And I see a new kind of innovation taking root — one that is local, sustainable, and visionary. San Francisco's next wave of innovators is here and they are just getting started. This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ('DTTL'), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as 'Deloitte Global') does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the 'Deloitte' name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see

Harvard, McKinsey and Davos Are Paying for Neoliberalism's Sins
Harvard, McKinsey and Davos Are Paying for Neoliberalism's Sins

Bloomberg

time4 days ago

  • Bloomberg

Harvard, McKinsey and Davos Are Paying for Neoliberalism's Sins

Three institutions stood at the heart of the neoliberal regime that ran the world from the 1980s onward: Harvard University, McKinsey & Co. and the World Economic Forum (WEF). Harvard and McKinsey were the premier training grounds for the emerging global elite. The WEF's annual meeting at Davos was the annual meet-and-greet party for the people who had made it (and their journalistic chroniclers). All three institutions reinforced each other during the glory years of neoliberalism. And all three are currently in crisis. Their travails tell us a great deal about what was wrong with an idea that once delivered a necessary shock to a sclerotic Keynesian regime but was corrupted by its crude celebration of success. They can only recover their former vitality if they reflect seriously on what went wrong during the rah-rah years — and on their own central role in creating our current malaise.

Get-rich-quick schemes, pyramids and ponzis: five signs you're being scammed
Get-rich-quick schemes, pyramids and ponzis: five signs you're being scammed

Yahoo

time4 days ago

  • Yahoo

Get-rich-quick schemes, pyramids and ponzis: five signs you're being scammed

Consumers are under a lot of financial strain. The World Economic Forum reports that the cost-of-living crisis is affecting people across the globe. With food and fuel prices rising, it's becoming increasingly difficult to keep financially afloat. On top of that, salaries aren't keeping up with inflation, making it more difficult to save and build wealth. It's during such times of economic difficulty and uncertainty that fraudsters lure unsuspecting consumers into 'get-rich-quick' schemes, offering an avenue to make easy money by investing in a 'lucrative' financial opportunity. Nothing beats the prospect of making easy money, and every now and again there seems to be a 'get-rich-quick' scheme circulating on WhatsApp or on social media that seems legitimate. But it's not. Our research interests centre on financial systems in emerging economies, and we advocate for financial inclusion and empowering marginalised communities through financial literacy and financial planning. We use our academic platform to share our expertise on finance, including common financial traps people should steer clear of. 'Get-rich-quick' schemes are one such trap. They're also sometimes called ponzi or pyramid schemes. The schemes are a form of financial fraud. The people running them take money through deception: the misrepresentation of information and identity. They promise financial benefits that don't exist. You should avoid them because, more often than not, they are bogus and fraudulent business ventures. There have been some massive fraud schemes over the past 30 years. In the early 1990s, MMM Global - one of the world's largest and most notorious ponzi schemes - defrauded up to 40 million people, who lost an estimated $10 billion. Ponzi schemes have since resurfaced in different forms in South Africa, Nigeria, Zimbabwe, Kenya, Ghana and several other African countries. There are five tell-tale signs of a 'get-rich-quick' scheme. Watch out for them. Firstly, they offer exaggerated and above-market returns within a short period of time, with the promise of little to no risk. There are two golden rules when it comes to investing. The first is that it takes time to make money. Amassing a small fortune within a short space of time should raise questions about the scheme. The second rule is: the higher the risk, the higher the return. In other words, no investment is risk free or can guarantee significant returns. There is always some risk involved. An investment that promises substantial returns tends to be quite risky, which repels most people with a low appetite for risk. Secondly, new members are constantly recruited to join the scheme. Typically, such schemes are sustained by relying on the investments of new members to pay existing members. Once the number of existing members exceeds new members, the scheme goes 'belly-up'. At best you lose out on the returns you were promised. At worst you lose all the money you've invested. When the scheme collapses, it is almost impossible to recover the money you've lost because you've technically given it to a stranger (remember, the definition of financial fraud encompasses the misrepresentation of identity). Thirdly, there is urgency to join the scheme and no clarity on how the scheme works. This is a classic characteristic of a 'get-rich-quick' scheme. There is usually no clear answer about the nature of the scheme, what it invests in, how it generates its returns or the credentials of the organisation. Legitimate investments are transparent and can provide investors with all the information they need to help them decide whether to invest. Unsurprisingly, a proper check of 'get-rich-quick' schemes will unmask their fraudulent nature. This is why there's always the urgency and coercion to make an immediate financial commitment under the guise of missing a once-in-a-lifetime opportunity to get rich. Fourthly, the scheme is not registered with or regulated by any recognised authority. Regulatory authorities are important because they monitor the conduct of financial service providers and protect consumers by keeping their best interests in mind. The protection provided by financial regulators also instils confidence in financial systems. 'Get-rich-quick' schemes are not registered and operate outside the framework of regulatory bodies. This makes investors more vulnerable to loss and makes it more difficult to seek legal recourse when the loss occurs. Legitimate investments in South Africa are offered by authorised financial service providers and regulated by the Financial Sector Conduct Authority. You can search for any authorised financial service provider on the authority's website. Fifthly, they use the testimonies from existing members who've earned big bucks to promote the scheme. At the initial stages, the scheme tends to pay out to those who have invested early, and these members are encouraged to share the news of their wealth (which travels fast and far) to promote the scheme. But this is a tactic used to create the impression that you too can earn returns in the double digits. These schemes are both unsustainable and unethical as one person gets wealthy through someone else being deceived. It's worth repeating that if it sounds too good to be true, then it probably is. Wealth comes from a sound investment strategy and decisions made over time. Any promise to 'get rich quick' should be treated with the cynicism it deserves. It will ultimately reveal its fraudulent nature. Recognising the signs of 'get-rich-quick' schemes can save you from unnecessary financial distress. It's always a good idea to do your own investigation before committing your finances into any investment. You can find more information on the various types of scams through the South African Banking Risk Information Centre's website and report them to the South African Fraud Prevention Service. This article is republished from The Conversation, a nonprofit, independent news organization bringing you facts and trustworthy analysis to help you make sense of our complex world. It was written by: Bomikazi Zeka, University of Canberra and Abdul Latif Alhassan, University of Cape Town Read more: Cholera: vaccines can stop the spread, but the biggest deterrent is clean water Children's movement affects health and development but research is lacking in Africa: here's why Human organs for transplant: 5 steps Africa must take to improve the supply chain The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment. Sign in to access your portfolio

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store