verywhere competition is more intense, withcompanies and departments having to do more

with less. As competition increases, the importance ofgetting the greatest benefit out of innovation effortsincreases. One powerful way to increase the benefits ofinnovation efforts is to target them so they result ininnovations that are more strategically useful and thushave greater benefits for the organization.

Getting the Most Out of Innovation EffortsThe key to making an innovation lead to greater im-provement is to understand where it fits into the biggerpicture of the company and its needs. Systems thinking,a field pioneered by Professor Jay Forrester of MIT, canplay a key role in producing the understanding of theoverall system needed to target innovation efforts moreeffectively. Systems thinking does this by providing amethodology and a set of tools for constructing mapsof systems and determining the points at which changecan have the greatest impact on a company’s perfor-mance. This article will provide an introduction tosome of the foundations and concepts of systemsthinking, and will demonstrate how using it withinnovation efforts can dramatically increase thechances that your innovation efforts will create lastingvalue for your organization.

The Systems Thinking ApproachThe approach of systems thinking is fundamentallydifferent from that of traditional forms of analysis.Instead of focusing on the individual pieces of what isbeing studied, systems thinking focuses on the feed-back relationships between the thing being studiedand the other parts of system. Therefore instead ofisolating smaller and smaller parts of a system, systemsthinking involves a broader view, looking at larger and

larger numbers of interactions. In this way, systems thinkingcreates a better understanding of the big picture.

Innovation With The System In MindAs an example of how this better understanding of thebig picture can increase the benefits of innovation,consider the department of an agricultural firm chargedwith finding a way to reduce the crop damage createdby insects that have proven resistant to commonpesticides. One way to approach the problem would beto create an especially strong pesticide that is designedto be potent enough to kill even these unusuallyresistant insects. The company might then instruct theirresearchers to develop such a strong pesticide for themto use on their crops. The reasoning behind this courseof action can be shown as follows:

In this diagram, the arrows represent the direction of causal-ity—one element causing the other to change—while the orepresents how one makes the other change. The o next tothe arrow from Pesticide Application to Insects DamagingCrops means that Pesticide Application causes Insects DamagingCrops to change in the opposite way it does—if the applica-tion of pesticides increases, the number of insects damagingcrops goes down, a change in the opposite direction.

The problem in this case is that the researchers have beenasked to do something based on a faulty understanding ofthe system, and so the department’s success at producing astronger pesticide may not translate into lasting benefit forthe company as a whole—in fact, the strategy may backfire.The reason for this is that the policy is based on an under-standing of the system that, while not wrong per se, isincomplete—it leaves out the feedback relationships in-volved.

Daniel Aronson is a principal at SuccesSystems, a consultingfirm in Cambridge, Massachusetts, specializing in using systemsthinking to increase organizational performance. He is also amember of the System Dynamics Group at MIT. He can bereached at (781) 433-7138 or by e-mail at ScsSystems@aol.com.

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TARGETED INNOVATIONUsing Systems Thinking to Increasethe Benefits of Innovation Effortsby Daniel Aronson

Pesticide Application

Insects Damaging Crops

O

A View of the Big PictureThe diagram below shows a picture of the system thatcaptures the set of interactions that are likely, in fact, tomake the company’s strategy backfire:

While the application of the stronger pesticide indeedreduces the numbers of the target insect—and thus thetotal crop damage—in the short run (as shown in theinner loop from Application of Pesticide to Number ofTarget Insects Damaging Crops), it kills even more ofthe other insects in the area than it does of the targetinsect because—as mentioned earlier—the targetinsect is more resistant to pesticides than other insectsare.

Some of the insects killed by the pesticide helped control thepopulation of the target insects by preying or competing withthem (as shown by the connection between Number of OtherInsects Controlling the Population of Target Insect and Numberof Target Insects Damaging Crops). When these insects arekilled, the degree of control they exerted on the populationof the target insect is lessened. (This effect is shown in theouter loop from Application of Pesticide to Number of OtherInsects Controlling the Population of Target Insect.)

Reduced Long-Term EffectivenessEventually, as the target insects recover from the effectsof the pesticide, the lessening of the control that hadbeen provided by other insects leads to an explosion inthe population of the target insect. As the population ofthe target insect goes up, so does total crop damage, asthe link between Number of Target Insects DamagingCrops and Total Crop Damage shows. (The s indicatesthat the two change in the same direction—as thenumber of target insects goes up, so does the total cropdamage.)

This leads to even greater crop damage than before, encour-aging the company to apply the pesticide again—in thelanguage of the diagram, as Total Crop Damage goes up,Application of Pesticide goes up (with the s again indicatingthat they change in the same direction). However, even thetemporary gains originally made by applying the newpesticide begin to lessen as the target insect becomes moreresistant to it and, as a result, crop damage continues to getworse. What worked well at the beginning does not worknearly as well any more, and the benefits of the company’sinnovation efforts begin to evaporate.

Local Success, Global FailureIn this case, the very effectiveness with which theresearchers did what they were asked to do—create astronger pesticide—served to make the original prob-lem worse because the side effects of using a morepowerful pesticide were not considered. An under-standing of the interactions that produced these sideeffects would have enabled the company to see thattheir plan to use a stronger pesticide was likely tobackfire. They would also have been able to considerother options that would not backfire, such as introduc-ing more of the target insect’s predators into the areaand developing strains of the crops that were moreresistant to insect damage. Giving the researchers eitherof these tasks would have led to an innovation that fitbetter into the big picture and as a result createdsubstantial, lasting benefit.

The Benefits of Big Picture InnovationAs this example shows, systems thinking can providesome of its greatest benefit by giving companies a wayto make sure that the benefits of their innovationefforts are not compromised by the lack of a bigpicture understanding. Without requiring any additionalresources, innovation efforts targeted with the bigpicture in mind can produce greater, lasting benefits forthe organization, and a company that gets more benefitfrom its innovation efforts will have a competitiveadvantage over its rivals.

A version of this article appeared in R&D Innovator(now Innovative Leader), Volume 6, No. 2.Dr. Winston J. Brill is the editor of Innovative Leader; hecan be reached at (608) 231-6766, by mail at4134 Cherokee DriveMadison, WI 53711 USAand by e-mail at wjbrill@facstaff.wisc.edu.

Number of Target Insects Damaging Crops

Number of Other Insects Controlling the Population of

Target Insect

Total Crop Damage

Application of Pesticide

DELAY O

OO

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