January 11th, 2011 | By Contributing Writer | Posted in Business & Economy | 1 Comment

10 Useful Ideas on Systems Thinking

Recently while talking with Richard Wilkinson, one of our contributing writers, he mentioned his favorite contribution to Futurist.com. Richard asked us to re-post his favorite “10 Useful Ideas on Systems Thinking”, which he wrote for us in 2001. The following is the text of that article. Great stuff.

By Richard Wilkinson, 2001

“Real life is lived in a complex world system where all the subsystems overlap and affect each other.”

At the heart of systems thinking is the principle of interconnectedness. I compiled the following list to make this core idea translatable to daily life. The ideas presented here are not meant to be the final word on the subject of systems thinking. Indeed, one author listed no less than 28 ideas, a couple of which found their way here, too. This list began in 1995 when the first two entries were shared, appropriately enough, at the conclusion of “The Beer Game”, the famous game developed at MIT to teach systems thinking.

1. Everything is connected to everything else.

Real life is lived in a complex world system where all the subsystems overlap and affect each other. The common mistake is to deal with one subsystem in isolation, as if it didn’t connect with anything else. This almost always backfires as other subsystems respond in unanticipated ways.

2. You can never do just one thing.

This follows from the preceding idea. In addition to the immediate effect of an action, there will always be other consequences of it that ripple through the system. Every action has unintended consequences.

3. Different people in the same structure will produce similar results.

Charlotte Roberts asks, “Who has the most influence on the performance of an ocean liner when it is out at sea in route to its destination?” Answer: The designer of the ship. A logical extension of this notion is: Don’t try to control the players, just change the rules. If the system tries to make choices for people, the people will try to outwit the system. It is much more effective to change the rules of the game so that it is to most people’s advantage to make choices that are good for the whole system.

4. A collection of things is a system if any one element can affect the performance of the whole.

There is no inherent end to the system. The boundaries of a system are arbitrary, defined by the observer. Systems analysis is finding connection in patterns. A threshold question in systems analysis is, “What level of the whole do you seek to know?” For example, it has been observed that business is part of a larger system constructively understood as such. For example, business decisions affect the economy, environment, community, and industry, as well as the mental health and well-being of employees and their families, and the wealth of investors.

5. From “either/or” to “both/and”.

We often err when we think in mutually exclusive opposites. We consider our next steps as being either along the path of solution x or solution y. Breakthroughs come when we consider the possibilities of blending both x and y. Considering both the whole and its parts, bridging in some lively way what appear to be opposites, forces us to consider situations from multiple perspectives.

6. There is no “away” to throw things to.

Dennis Meadows of the University of New Hampshire said, “When you see whole systems, you start noticing where things come from and where they go. You begin to see that there is no ‘away’ to throw things to.”

7. The easiest way out is the fastest way back in.

A common blunder is to grab for a solution prematurely without appreciating the underlying root causes driving a situation. A systems thinking sequence to reach a deeper understanding is to first consider the event, then to peel back a layer to see if it is part of an underlying pattern. In other words, has this happened before? Peel another layer by asking why this pattern is occurring. Continue asking “And, why is that?” until the root cause emerges. [This is the practice of asking the "5 whys".]

8. Profound changes can take place in ways we cannot foretell.

A small force or event can have a disproportionate effect.

9. The map is not the territory.

Useful as they are, no model, theory, or tool can capture the full complexity of the subject it addresses. Roger Harrison writes, “I never can resist the urge to create theories and models. But, I hold all maps and theories lightly, consciously making room for mystery and for doubt.”

10. An answer is a question’s way of asking a new question.

And, there are no final answers.

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January 10th, 2011 | By Catherine Otten | Posted in Business & Economy | Comments Off

The New Pay Gap: Boomers, Gen-X, and Millennials

Forbes Pay Gap

Glen was recently interviewed by Meghan Casserly of Forbes Magazine about the pay gap that many employees in younger generations are now dealing with. Meghan’s key point is that wage stagnation now for the Millennials may have long-term consequences for their career income, an idea that Glen agrees with. But as usual, Glen had additional insight and good information on the subject.

While Hiemstra agrees that Gen Y has suffered a financial blow, he points to evidence that their values—the way they think about money–are shifting in a positive way, just maybe as a result. “Even before the recession took hold, Millennials were already in the process of redefining the American Dream—downshifting away from big income to other strong values,” he says. It’s a world view that depends less on financial success than personal goals and emotional connections, he says. Millennials have become less concerned about becoming wealthy than Gen X and the Baby boomers before them.

“Sure, it’s been reinforced by the economy,” says Hiemstra. But while it’s easy to understand a shift towards frugality in particularly tough times, he also sees it as a “truly a significant value shift that’s not likely to change back when the economy recovers.”

You can read the full article on the Forbes Website.

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January 4th, 2011 | By Glen Hiemstra | Posted in Business & Economy, Environment & Energy, Science & Technology, Society & Culture | Comments Off

Outlook 2011

rear view mirror

Before we offer forecasts for 2011, let’s review how we did with Outlook 2010

Aging
2010 was indeed the final year of preparation for the age wave, but we made only modest progress in getting ready. The U.S. Health Care bill was the most positive step, as it included some needed adjustments to Medicare, and has the promise of restraining the cost of health care a bit. But as the year closed and the U.S. election took place, 2010 ended with the promise of threats to the social safety net in the U.S. austerity became the new mantra. This echos the political mood in Europe as well. Summary: The forecast was correct, but the policy reaction to the forecast fell short.

Technology
3D was indeed the primary technology development of the year, including the availability of 3D video recorders for personal video production. The consumer uptake of 3D was slow, as the technology was still new and content only now being widely developed. The $100 Genome did not appear in 2010, and in fact now looks perhaps four to ten years off. Summary: The 3D forecast was correct (and is now a common forecast of tech observers for 2011), while the $100 Genome was off-base.

Energy
I suggested that 2010 may be the year, and that the coming decade would certainly be the decade, when we discover that peak oil, defined as the moment when world oil production reaches its historical maximum, was imminent. However, 2010 saw increases in oil discoveries, and a continued slowing of demand growth, such that many experts now believe the peak may be several decades off. The International Energy Agency agrees when looking at supplies, but believes a peak in production could come sooner depending on government policies. 2010 did see intensified interest in alternative energy as forecast, particularly electric cars. Natural gas discoveries were enhanced by the process known as fracking, but, as forecast, the issue of long-term contamination of ground water became more controversial. Summary: Results were mixed – we learned more about Peak Oil, but the timing is more uncertain now than before.

Economy and Jobs
I forecast that 2010 would be a year of slow job growth in the U.S., but in contrast to most observers at the time, argued that we are not in for a period of jobless growth. In fact more than one million non-government jobs were created in 2010, the most since 2006. But this made barely a dent in unemployment figures. I also predicted a better than expected economic recovery in 2010, which by year-end looked accurate but barely. Still not robust, but better than expected. Summary: An accurate forecast as job growth accelerated but slowly. Long-term implications for recreating the 8 million jobs lost in the recession still look positive but will take years. This time, for the first time, it could be that replacement of workers via greater efficiency based on information technology will have a permanent impact.

future bench

Forecasts for 2011

Demographics and Social Policy
The age wave, which hit shore on January 1, 2011, becomes a big story finally, but unfortunately in a misleading way. There will be a concerted effort to use the age wave and government deficits to justify an effort to permanently cripple Social Security in the U.S. It is true that the Social Security Trust Fund is “where the money is” when you look at available tax money in the U.S. But it is not true, and never has been, that Social Security is on the verge of bankruptcy, or requires massive changes. Simply leaving things as they are enables a full payout of benefits until 2037. Minor changes like an increase in Social Security taxes of 1/20th of a percent per year for 20 years would make the system self-sustaining longer term. The key problem now is deciding what the Federal Government can stop spending on in order to repay the taxes borrowed from the Trust Fund for general use since the Reagan “reforms” of the early 1980′s. There are only two realistic ways to create pools of money that are large enough – either raising general tax rates, or substantially decreasing military spending. Preserving Social Security in the U.S. will be more important than ever, as a declining percentage of aging workers will have company pension programs, and the self-funded 401K programs designed to take their place are both very insecure and on average too small to provide a reasonable retirement for more than half the population. A monumental fight over Social Security looms and the outcome will determine whether the U.S. slips back into significant poverty among the aged.

Technology
3D will continue to grow in the consumer space, but the biggest tech story of 2011 will be explosive growth of tablet computing. Tablets and smart phones will become the most common access devices for the Net by the end of the year.

The Smart Grid will be the biggest large-scale technology issue of the year, as the electricity industry moves more aggressively toward a smarter distribution system. A big issue will be developing the human resources needed to build the smart grid. The other large-scale technology issue will be the continued lagging of the U.S. compared to the global economic tigers in 21st Century development of high-speed transportation systems and hubs. The U.S. will need to get out of its current “can’t do” attitude soon, but this will not happen in 2011 given the political climate.

Environment
2011 will likely be a hot year once again, but the confusing weather signals that result, combined with the deliberate political confusion sown by those who want no aggressive climate policies mean that 2011 will see little progress on national and international policies to slow down climate change. But, interestingly, 2011 will see the most aggressive actions yet by private industry to improve their own profitability by adopting sustainable energy and environmental practices. This includes especially the production of more energy efficient autos, buildings, and appliances.

Energy
A consensus will form that Peak Oil is further in the future than thought a few years ago, unless there are policy decisions to decrease or eliminate the government subsidies provided to conventional fossil fuel production and to price the carbon emissions that come from burning fossil fuels. Since such policies are unlikely, growth in the production and use of fossil fuels is likely. Oil will approach $100 a barrel again, but stay a bit short as producing countries work very hard to keep the price around $90-95.

Economy
As we move through 2011 an economic recovery will gather momentum both nationally and globally. We are likely to see continued global growth in places like China of nearly 10%, in the U.S. of 3-4% and in Europe of 2-3%. In the U.S. this will mean job growth on the order of 1.5 to 2 million new jobs, still far short of “normal” growth after a recession, but as much as twice as good as 2010, which was the best year since 2006. However, gross GDP and employment statistics will tend to miss the deeper stories as the next economy emerges. One question which will become clearer during 2011 is whether we have indeed “reset” the economy, particularly in the U.S., at a lower, more frugal level. About half of the unemployed who found work in 2010 have begun new jobs paying less than the job they had lost in the recession. The other critical story is the continued bifurcation of the new economy into the very wealthy and the poor, with a loss of the middle class. Such a trend, if it continues, takes civilization back toward ancient times when such a split was the norm. Recent research has suggested that such societies are less happy, less stable, and less secure. It does not look like 2011 will be a year in which this trend is confronted, but eventually it must be addressed though social and economic policy.

Glen Hiemstra is a futurist speaker, author, consultant, blogger, internet video host and Founder of Futurist.com. To arrange for a speech contact Futurist.com.

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January 3rd, 2011 | By Brenda Cooper | Posted in Business & Economy, Environment & Energy, Science & Technology, Society & Culture | 1 Comment

Striking a Balance: The Yin and Yang of Futuring

This is a guest blog by Brenda Cooper.

As long as I’ve been alive, humanity has obsessed over its demise – at its own hands. In second grade, stern teachers sent me crawling under desks to avoid nuclear war (talk about a culture of fear – today has nothing on the sixties). Now we are convinced that climate change will do us all in. Both, by the way, remain real threats. It’s important to guard against evil. Think of that as the yang of futuring, whether done over the dinner table, around the water cooler, or from the dais. But I think we’re missing the yin: we’re failing to notice the good all around us.

Back in the crawling under desks part of my life, people who lived in other countries were unreachable to me, and had I wanted to talk to one, it would have cost a lot of money. Today, I have a phone that’s also a camera and a link to a world of information and entertainment – and to people all over the globe. There’s a good chance I can avoid or find a cure for most diseases that could directly affect me. We’re finally developing a real space industry (sorry – I’m a geek – but whatever it is you love, there is almost undoubtedly progress).

Take the climate change problem. It feels intractable. Old entrenched industries are fighting tooth and nail to hang on to things we KNOW are bad for us (remember the tobacco industry). But people all over the world are working on it. Wind TurbinesAmerican car companies are coming out with good electric cars, China is building green cities, and here at home, in the city where I work, we have a green building program and a green business program. For all that it feels too slow (may be too slow), we’re changing fast on this one as a society. When I drive from here to Oregon, I go through a forest of futuristic new white windmills. I think in almost every pain point where technology changes make a difference (travel, carbon, medicine, communication) we’re changing faster than ever before, and our intent is good. We are a capable species.

Yet I hear more fear of the future than excitement, more worry about what we’re doing than celebration of it. We could do with a little balance. I am not suggesting we relax our vigilance about climate change or terrorism or even nuclear war. But we could pay attention to the good as well. I hope we all work on that for 2011.

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December 24th, 2010 | By Glen Hiemstra | Posted in Business & Economy, Environment & Energy | Comments Off

Keynote Speech for SONAE Finov 2010 – Reflections

It was my favorite keynote speech of the year, and one we’ll leave up here for the holiday break, with Happy Holiday wishes to everyone.

The event was FINOV 2010, an annual event of the SONAE company at which they honor individuals and teams for the innovations of the past year. This year the conference took place in a centuries old former monastery in Porto, Portugal, a spectacular setting.

I was not familiar with Sonae when they first contacted me, but soon learned that they are the largest employer in Portugal with nearly 50,000 employees and with an expanding international presence. The company began in 1959 manufacturing wood panels. From that modest beginning the company has grown into a diverse conglomerate. They continue to manufacture panels, but that has become a small part of the business. Now Sonae is known as a retailer and developer, as they build and operate “hypermarkets” and shopping centers in Portugal and elsewhere in the world. From that they have branched into specialty stores including mobile phones and networks with some 15 brands. They own hotel and resort properties as well.

While in Porto I was escorted on an extensive visit of the new Gold Level LEED Certified headquarters for Sonae Capital, as well as distribution centers, stores and a shopping center. What is evident is that Sonae has a real commitment to innovation, sustainability, and quality. They have a very deliberate strategy to encourage innovation throughout the company, and the FINOV conference is the annual culmination of that.

In my program I was asked to address both the longer-term megatrends, and specific trends and expectations in manufacturing and building supplies, mobile communications and IT, consumers and retail, tourism, and more.




Glen with CEO Paulo Azevedo on his right, Chairman Belmiro de Azevedo on his left, and Cathy O’Dowd, Mt. Everest climber and another speaker on the end.






The take-away for me was that Sonae is a company to pay attention to as a model of sustainability, and of building a culture of innovation.

The full video of my speech is posted here. You can also find this speech along with many others on our Futurist Keynote Videos page and our Featured Videos page.

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