How can businesses balance economic growth with environmental protection? How can social responsibility be integrated into business models? These questions, seemingly simple, are, in fact, highly complex and have been the subject of exploration in sustainable development for decades. At Neuromagic, we believe that systems thinking provides a powerful set of tools and perspectives, enabling businesses to thoroughly examine their current state and achieve sustainable development goals.

What is Systems Thinking?

Originating from system dynamics, “Systems Thinking” has evolved over several decades and is now regarded as a thinking methodology for solving complex problems. It is not only applicable to environmental challenges but is also widely used in social, economic, and political systems, hailed as a more comprehensive and sustainable problem-solving methodology.

In Peter Senge’s book “The Fifth Discipline,” systems thinking cases include understanding the relationship between product design and resource consumption, internal integration and learning within organizations, and analyzing the impact of supply chain decisions on environmental and social sustainability.

The Connection Between Systems Thinking and Sustainability

From the perspective of systems thinking, sustainable development is a complex system problem that requires consideration from a holistic and long-term perspective. After defining the connections of points, lines, and surfaces, depict the mutual influences further. Therefore, we believe that the challenges businesses face in sustainable development are complex, interconnected, and constantly changing. Combining human-centered thinking with an Earth-centric approach can achieve a balanced and viable solution for organizations, individuals, and the environment.

Here are some application cases of Systems Thinking in sustainable development:

⚫︎Identifying the Root Causes of Social Issues

Systems thinking can help businesses identify the root causes of social issues, enabling the formulation of more effective solutions. For example, climate change is a significant global challenge today. Systems Thinking assists businesses in understanding the negative impact of climate change on goals such as food security, water resources, and health, facilitating the development of effective emission reduction measures.

⚫︎Assessing the Sustainability of Different Decision Solutions

Systems thinking can assist businesses in evaluating the sustainability of different decision solutions, enabling more informed decisions aligned with sustainable development goals. For instance, when developing new products, businesses can use systems thinking to assess the economic, environmental, and social benefits of the product, making decisions that align more closely with sustainable development goals.

⚫︎Promoting Collaboration Among Stakeholders

Systems thinking helps businesses promote collaboration among stakeholders to collectively address sustainable development issues. For example, in addressing water pollution, businesses can use systems thinking to identify various stakeholders involved in the issue and collaborate with them to formulate and implement solutions.

Where Sustainability Managers and Executives Should Start

Here, we will introduce reference materials and tools related to Systems Thinking.

Book Recommendations

For sustainability managers and executives interested in Systems Thinking, we recommend reading “The Fifth Discipline: The Art & Practice of The Learning Organization” by Peter Senge and “Thinking in Systems: A Primer” by Donella H. Meadows. When diving deeper into the applications of systems diagrams and value chain analysis, these tools can assist in analyzing a company’s production, operations, and management processes, identifying factors that may impact sustainable development and formulating more effective solutions.

Systems Mapping

Systems mapping is a tool used to describe the structure and interaction of systems. It helps businesses identify key issues and connections within a system.

Sustainability managers and executives can use systems mapping to analyze a company’s production, operations, and management processes, identifying factors that may impact sustainability. For example, a company can use systems mapping to analyze the environmental impact in the supply chain and the social impact of its products.

In a link from the renowned design company IDEO here（※１）, they use a systems map to explain the “Student Experience in Public High Schools.” The system map clearly illustrates the distance and connectivity between students and other stakeholders, highlighting the strong influence of the Local Student Board (Education Committee) on students’ finances despite lacking direct daily interactions.

What is a Systems Map?

For a more detailed approach to systems mapping, refer to this article (in English)（※2）, which provides an in-depth process of abstracting elements of the system from your mind and then reassembling them to establish relationships.

Tools for Systems Thinkers: Systems Mapping

（※1）https://www.ideou.com/blogs/inspiration/what-is-a-systems-map

（※2）https://medium.com/disruptive-design/tools-for-systems-thinkers-systems-mapping-2db5cf30ab3a

Value Chain Analysis

Value chain analysis is a tool used to illustrate the production and distribution process of products or services. Through value chain analysis, sustainability managers and executives can gain a detailed understanding of various stages in the lifecycle of a product or service, including production, processing, packaging, transportation, sales, usage, and recycling.

This allows companies to more comprehensively identify factors that may impact sustainable development. Unlike traditional supply chain analysis that focuses on operational structures, value chain analysis emphasizes viewing the actual value generated by various parts of the system from the customer’s perspective. For example, businesses can use value chain analysis to examine a product’s carbon footprint, water footprint, etc., to formulate specific measures to reduce adverse environmental impacts.

On the sustainability front, this means not only reducing damage during the production process but also creating products and services that are sustainable and bring value to society and the environment. While companies typically focus on the environmental impact when examining the sustainability of the supply chain, value chain analysis takes a more comprehensive approach, considering the overall positive value creation for the environment and society.

Neuromagic Case Study:

Neuromagic has assisted our client GEECHS in defining their internal “Social Impact Flow” （※3）using the similar framework of value chain analysis. This focused on how clients contribute to societal value in the four stages of Input, Group Synergy, Output, and Outcome. Through a co-creation approach with the client, the case study defines how clients’ challenges and strengths can lead them to tell their stories and have societal impact.

（※3）https://geechs.com/blog/20230802_socialimpactflow/

Below are introductions to Input, Group Synergy, Output, and Outcome:

• Input: In the social impact flow of a company, “input” may include resources, time, manpower, funds, etc.
• Group Synergy: Through “group synergy,” a company emphasizes the synergistic effects produced when collaborating with various sectors of society.
• Output: In the social impact flow, “output” refers to the products, services, or other tangible or intangible outcomes that a company provides.
• Outcome: The “outcome” of a company’s social impact flow emphasizes the actual effects generated at the societal level, which may include community development, educational improvement, environmental protection, etc. </aside>

In summary, tools like these not only provide readers with a clearer understanding of how businesses use systems thinking to approach sustainability challenges from different perspectives but also enable a more in-depth exploration.

Conclusion

In conclusion, through the methodology of systems thinking, businesses can comprehensively understand and address the challenges of sustainable development, achieving the mutual development of the economy, environment, and society. We hope this article provides valuable guidance and inspiration for businesses on the path to sustainable development.

References:

• The Fifth Discipline: The Art & Practice of The Learning Organization by Peter M. Senge
• Thinking in Systems: A Primer by Donella H. Meadows
• Tools for Systems Thinkers: Systems Mapping by Leyla Acaroglu, source
• What is a Systems Map? by IDEO U source
• 「GEECHS Social Impact Flow」が掲げるギークスのサスティナビリティ推進とは by GEECHS source

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