Today's Most Crucial Leadership Skill Is Systems Thinking
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.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
12 hours ago
- Yahoo
Davos founder Schwab cleared of misconduct by WEF probe
An investigation conducted by the World Economic Forum's board on Friday cleared the body's founder Klaus Schwab and his wife of wrongdoing, after a probe into whistleblower complaints. "Following a thorough review of all facts, the Board has concluded that ... there is no evidence of material wrongdoing by Klaus Schwab," the board announced. In April, the Wall Street Journal reported that an anonymous letter sent to the prestigious institution's board of directors accused Schwab and his wife Hilde of mixing their personal affairs with Forum resources without proper oversight. A spokesperson for Schwab had immediately denied all these accusations, but the 87-year-old said he would step down as head of the WEF. The board of the WEF, best known for its annual summit for political and business elites in the luxury Swiss ski resort of Davos, asked a law firm to carry out an independent probe of the allegations. "Minor irregularities, stemming from blurred lines between personal contributions and Forum operations, reflect deep commitment rather than intent of misconduct," the statement said. "The Board has taken action to address all issues identified throughout the investigation, including strengthening the governance in general." Also on Friday, the WEF said it will be replacing former Nestle CEO Peter Brabeck-Letmathe as interim chairman of the board. He is being replaced by the billionaire duo of Larry Finck, the American co-founder of the investment fund Blackrock, and Andre Hoffmann, the Swiss vice-chairman of the pharmaceutical group Roche, according to a separate statement. The letter alleged Schwab had asked junior employees to withdraw "thousands of dollars" from ATMs for him and used organisation funds to pay for massages during hotel stays. But the probe found nothing improper in his conduct. Schwab was born in Ravensburg, Germany, on March 30, 1938. He was married with two children. He was a professor of business management at the University of Geneva, where he taught until 2003, when in the early 1970s he launched the "European Management Forum," the precursor to the current Forum. He expanded it by inviting American business leaders, successfully building a huge network of the world's economic and political elite, transforming the event into a major high-level international gathering dedicated to business relations and the exchange of ideas. The Forum's success has led to the satirical concept of "Davos Man", the supposed avatar of a globalised elite of the stateless ultra-rich committed to free trade and high-minded seminars on corporate social responsibility. Like other international organisations, the WEF has spurred conspiracy theories alleging that it was seeking to establish a "new world order". Elon Musk, the world's richest man and once an influential member of US President Donald Trump's inner circle, accused Schwab on his social media platform X of wanting to "be the emperor of the Earth." vog/gv/dc
Yahoo
12 hours ago
- Yahoo
Mind the skills gap: Older workers falling behind in training
Working life and skills are changing fast. Some jobs are booming, others are disappearing, says the World Economic Forum's Future of Jobs Report 2025. The OECD warns: 'There is an urgent need to boost the skills of older workers.' However, older workers (55–65 year-olds) take part in non-formal learning and training much less than those aged 25–54 year-olds, the OECD finds. On average, the rate is 32% versus 49% in 23 European countries, though the gap differs across countries. Where do older people learn the most—and the least? What do experts and the OECD recommend? When do we stop learning? According to the OECD Employment Outlook 2025 report, participation in formal and non-formal adult learning declines with age. In 2023, only a third of 60–65 year-olds took part in adult learning in the 12 months before the survey, compared with more than half of 25–44 year-olds. The averages cover 29 countries, 22 of which are in Europe. The share of the population participating in adult learning is over 60% among 25–29 year-olds, but drops to 39% for those aged 55–59 and to 31% for those aged 60–65. This share starts to decline clearly after the age of 45. Non-formal training was far more common than formal learning (training leading to a qualification) across all age groups. This was especially true for older individuals, with only 1% of 60–65 year-olds participating in formal learning. Learning by doing also decreases with age. Related Years at work: Which European countries have the longest average working life? Surviving retirement: Where do older Europeans get their money? Why do older people take part in learning less? Lower participation in non-formal learning among older individuals may be due to less willingness to train or other barriers, such as time constraints or course costs. According to the report, a lower willingness to train is likely a key factor. The share of people who wanted to participate in training—whether or not they actually did—falls from about 60% among 25–44 year-olds to 37% among those aged 60–65. A similar pattern appears in the share of people who participated in less training than they wanted, which drops from 28% among 25–34 year-olds to 17% among those aged 55–65. The report shows that time constraints are less of a barrier to training for older people than for younger groups. Among 55–65-year-olds, 7% took part in less training than they wanted due to time constraints—5% citing work-related reasons and 2% family reasons. In contrast, 15% of 35–44 year-olds reported time constraints as a barrier, with 8% pointing to work and 7% to family responsibilities. Large differences across European countries In every OECD country, including all European ones in the list, older individuals (55–65 year-olds) take part in non-formal learning less than the prime-age group (25–54 year-olds). However, both their participation rates and the size of the age gap vary greatly. The highest participation in non-formal training among 55–65 year-olds is seen in the Nordic countries—Norway, Finland, and Denmark—at around 50%. Sweden ranks fifth with 43%. The European average (22 countries) is 31.7%, compared with 34.9% across the OECD (29 countries). The lowest participation in non-formal training for this age group was in Poland, Slovakia, and Hungary, all below 18%. Outside the Nordic countries, England has the highest participation at 43.5%, followed by the Netherlands (41.7%) and Ireland (40.9%). Among Europe's five largest economies, Italy has the lowest participation at 18.5%, followed by France at 21.7%. Germany stands at 34.9%, slightly above the average. The participation gap between 25–54-year-olds and 55–65-year-olds is widest in Portugal at 24.7 percentage points (pp) and smallest in Italy at 8.9 pp. However, this does not mean older people are doing better in Italy, as their participation rate is the fourth lowest in Europe. Related Europe's job market: Which sector has the most job postings? Top 20 revealed 'Now is the moment to really embrace those tools': LinkedIn's top tips to futureproof your career Is this a surprise? Not at all One reason older people are less likely to engage in training—and employers are less likely to fund it—is the lower expected return on such investment due to shorter remaining working lives, the report notes. This is no surprise in economic theory. According to ManpowerGroup, 75% of employers in 21 European countries were unable to find workers with the right skills in 2023. 'Continuous learning is essential' Pawel Adrjan, Director of Economic Research at Indeed, told Euronews Business that continuous learning is essential in a fast-evolving market. As with previous technological innovations, professionals who proactively learn new tools, platforms, and methodologies will be better positioned to work efficiently with emerging technologies. The OECD noted that higher employment rates among older workers can help employers preserve valuable knowledge and skills while boosting productivity. 'There is an urgent need to boost the skills of older workers and promote their participation in well-targeted training,' the organisation recommends. Related The Big Question: How can AI help you climb the corporate career ladder? 1 in 3 doctors in Europe are older than 55. Which countries are most at risk from ageing workforces? How can governments respond? OECD offers four main actions that the governments can do. They included: Focus on boosting skills of older workers Address barriers to job-to-job mobility Confront ageism and other forms of discrimination Revive productivity growth, including through AI and automation Across the EU, people are living longer than in past decades. Many countries have responded by raising the retirement age, keeping people in the workforce for more years. Error in retrieving data Sign in to access your portfolio Error in retrieving data
Yahoo
12 hours ago
- Yahoo
Mind the skills gap: Older workers falling behind in training
Working life and skills are changing fast. Some jobs are booming, others are disappearing, says the World Economic Forum's Future of Jobs Report 2025. The OECD warns: 'There is an urgent need to boost the skills of older workers.' However, older workers (55–65 year-olds) take part in non-formal learning and training much less than those aged 25–54 year-olds, the OECD finds. On average, the rate is 32% versus 49% in 23 European countries, though the gap differs across countries. Where do older people learn the most—and the least? What do experts and the OECD recommend? When do we stop learning? According to the OECD Employment Outlook 2025 report, participation in formal and non-formal adult learning declines with age. In 2023, only a third of 60–65 year-olds took part in adult learning in the 12 months before the survey, compared with more than half of 25–44 year-olds. The averages cover 29 countries, 22 of which are in Europe. The share of the population participating in adult learning is over 60% among 25–29 year-olds, but drops to 39% for those aged 55–59 and to 31% for those aged 60–65. This share starts to decline clearly after the age of 45. Non-formal training was far more common than formal learning (training leading to a qualification) across all age groups. This was especially true for older individuals, with only 1% of 60–65 year-olds participating in formal learning. Learning by doing also decreases with age. Related Years at work: Which European countries have the longest average working life? Surviving retirement: Where do older Europeans get their money? Why do older people take part in learning less? Lower participation in non-formal learning among older individuals may be due to less willingness to train or other barriers, such as time constraints or course costs. According to the report, a lower willingness to train is likely a key factor. The share of people who wanted to participate in training—whether or not they actually did—falls from about 60% among 25–44 year-olds to 37% among those aged 60–65. A similar pattern appears in the share of people who participated in less training than they wanted, which drops from 28% among 25–34 year-olds to 17% among those aged 55–65. The report shows that time constraints are less of a barrier to training for older people than for younger groups. Among 55–65-year-olds, 7% took part in less training than they wanted due to time constraints—5% citing work-related reasons and 2% family reasons. In contrast, 15% of 35–44 year-olds reported time constraints as a barrier, with 8% pointing to work and 7% to family responsibilities. Large differences across European countries In every OECD country, including all European ones in the list, older individuals (55–65 year-olds) take part in non-formal learning less than the prime-age group (25–54 year-olds). However, both their participation rates and the size of the age gap vary greatly. The highest participation in non-formal training among 55–65 year-olds is seen in the Nordic countries—Norway, Finland, and Denmark—at around 50%. Sweden ranks fifth with 43%. The European average (22 countries) is 31.7%, compared with 34.9% across the OECD (29 countries). The lowest participation in non-formal training for this age group was in Poland, Slovakia, and Hungary, all below 18%. Outside the Nordic countries, England has the highest participation at 43.5%, followed by the Netherlands (41.7%) and Ireland (40.9%). Among Europe's five largest economies, Italy has the lowest participation at 18.5%, followed by France at 21.7%. Germany stands at 34.9%, slightly above the average. The participation gap between 25–54-year-olds and 55–65-year-olds is widest in Portugal at 24.7 percentage points (pp) and smallest in Italy at 8.9 pp. However, this does not mean older people are doing better in Italy, as their participation rate is the fourth lowest in Europe. Related Europe's job market: Which sector has the most job postings? Top 20 revealed 'Now is the moment to really embrace those tools': LinkedIn's top tips to futureproof your career Is this a surprise? Not at all One reason older people are less likely to engage in training—and employers are less likely to fund it—is the lower expected return on such investment due to shorter remaining working lives, the report notes. This is no surprise in economic theory. According to ManpowerGroup, 75% of employers in 21 European countries were unable to find workers with the right skills in 2023. 'Continuous learning is essential' Pawel Adrjan, Director of Economic Research at Indeed, told Euronews Business that continuous learning is essential in a fast-evolving market. As with previous technological innovations, professionals who proactively learn new tools, platforms, and methodologies will be better positioned to work efficiently with emerging technologies. The OECD noted that higher employment rates among older workers can help employers preserve valuable knowledge and skills while boosting productivity. 'There is an urgent need to boost the skills of older workers and promote their participation in well-targeted training,' the organisation recommends. Related The Big Question: How can AI help you climb the corporate career ladder? 1 in 3 doctors in Europe are older than 55. Which countries are most at risk from ageing workforces? How can governments respond? OECD offers four main actions that the governments can do. They included: Focus on boosting skills of older workers Address barriers to job-to-job mobility Confront ageism and other forms of discrimination Revive productivity growth, including through AI and automation Across the EU, people are living longer than in past decades. Many countries have responded by raising the retirement age, keeping people in the workforce for more years. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
