We can innovate only when we have insight. Systems thinking provides insight into a problem by treating it as a system and examining its properties.

What is innovation?

Innovation along with agility, sustainability and synergy is becoming one of the most overused words in business today. Companies love to say that they innovate but the term has begun to lose its meaning. It is in danger of becoming a cliché.

On winning the Liberal leadership ballot Malcolm Turnbull said “The Australia of the future has to be a nation that is agile, that is innovative, that is creative.”

The Australian Government defines innovation to be the act of changing or creating more effective processes, products and ideas. The Macquarie dictionary defines innovation to be the act of bringing in something new or making changes to something established.

By these definitions most companies could claim to be innovative, simply because they change established processes. But nowadays simply changing established processes is not enough. There is more to it. Business processes and services need to be more effective. Products need to be more sustainable.

How can systems thinking help us innovate?

Systems thinking works by applying the concept of a system to a problem. By assuming that any problem is a system, we can assume that it has all the properties of a system.

By thinking systemically, we can assume that any company, and the products it produces or the services it provides are systems. They have all the attributes of a system.

All systems seek to realise a purpose. It is the reason for their existence. Purpose is only realised when a system performs as desired, to produce its products at the right time, in sufficient quantity and in the correct order.

Realising purpose is desirable system behaviour. However, systems can also exhibit undesirable behaviour. Undesirable behaviour may be anticipated but is often unanticipated. Radioactive waste is by-product of nuclear generation. It is undesirable but anticipated. A catastrophic nuclear accident, such as Chernobyl in 1986, is highly undesirable and unanticipated.

Truly innovative companies are those companies that continue to realise their purpose, by anticipating and meeting the needs of customers, whilst minimising undesirable behaviour.

Are the Swiss coffee pod inventors Nespresso™ truly innovative? At first glance yes. They have revolutionised the coffee experience, yet did they really consider the amount of aluminium waste that their products are producing, most of which ends up in landfill. Had they developed a fully compostable coffee pod that could be composted by the consumer then perhaps Nespresso’s coffee pod could be considered truly innovative.