Article by Tima Bansal and Julian Birkinshaw: “In this article we’ll look at the strengths and weaknesses of the two dominant approaches that businesses apply to innovation—breakthrough thinking and design thinking—which often produce socially and environmentally dysfunctional outcomes in complex systems. To avoid them, innovators should apply systems thinking, a methodology that has been around for decades but is rarely used today. It addresses the fact that in the modern economy every organization is part of a network of people, products, finances, and data, and changes in one area of the network can have side effects in others. For example, recent attempts by the U.S. government to impose tariffs on foreign imports have had ripple effects on the supply chains of major products like cars and iPhones, whose components are sourced from multiple countries. The tariff plans have also led to a spiral of complex and unpredictable reactions in financial markets.
Systems thinking helps predict and solve problems in dynamic, interconnected environments. It’s especially relevant to innovation for sustainability challenges. Electric vehicles, for example, have attracted a lot of investment, notably in China, because they are seen as a green technology. But their net effect on carbon emissions is highly contingent on how green a country’s power supply is. What’s more, their technology requires raw materials whose processing is highly polluting. Solar panels also look like an environmental silver bullet, but the rapidly growing scale of their manufacturing threatens to produce a tsunami of electronic waste. Truly sustainable technology solutions for environmental challenges require a systems-led approach that explicitly recognizes that the benefits of an innovation in one part of the planet’s ecology may be outweighed by the harm done elsewhere…(More)”.
