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Systemic vs. Systematic

2009 | Jul 1 in Home Page News , Systems , Leadership

By E-Myth Business Coach,

When was the last time you thought about why your business does what it does? Every business exists to produce a certain result — a service or a product — but have you ever asked yourself, "Why do we do it this way?" That question is the essence of strategic thinking. And strategic thinking is the result of having a systemic perspective of your business that accomplishes what it does in a systematic way.

More Than Mere Semantics

So what is the distinction between systemic and systematic? From the E-Myth Point of View one would define systemic as the holistic, or integrative, and interdependent nature of each part of a business. If you consider your business as being a "system of systems" then having a systemic perspective allows you to see how each part influences and interacts with the whole.

Systematic, on the other hand, refers to following a clearly defined and organized process. It is about having processes, or systems, that are repeatable and predictable — that produce the same result each time, every time. One could go on to say that where a systematic view focuses on results, a systemic view focuses on interrelatedness.

So why is it important to know the difference? In light of the question, "Why do we do it this way?" is one view more critical than the other? We would argue that both views are critical, both are essential, but they do not always exist in many businesses.

Strategy and Tactics

If we go beyond definitions and look at these two perspectives in a more practical way we might talk about them in terms of business strategy and business tactics. Although this analogy can only be stretched so far, one could argue that business strategy represents systemic thinking in action while business tactics are systems at work. Both are needed to make a business function well and effectively. But the relationship goes much deeper than that.

The tendency among business owners when faced with a problem is to look immediately to solutions that are close by. Typically they look to actions that produce improvements in a relatively short amount time, but this can often involve significant costs down the road. An example is cutting back on marketing activities and advertising costs in order to achieve cost savings benefits when times are tough. At first, the impact on new business and lead generation may be negligible, but the longer term impact can be crippling. This is the result of taking a tactical approach to a problem without considering the larger strategic concerns of the business. The danger of thinking and reacting from a strictly systematic perspective can be costly.

On the other hand it is quite possible for business owners or managers to make strategic decisions while failing to take into consideration specific systems or tactics which impact the whole. An example is the manager tasked with decreasing costs of production in a small factory. He notes that the assembly line produces an average of 100 widgets each month, yet they maintain raw materials for 150. Reasonably, he determines that the company could streamline and reduce overhead by only stocking materials for the 100 that are being made. Over the next six months it becomes apparent that the net production has dropped. The manager assumes productivity is suddenly lacking on the part of the assembly workers. What the manager failed to take into account, however, was the fact that the assembly line would produce between 50 to 150 widgets on any given month for an average of 100 widgets monthly. By limiting the raw materials at hand each month the manager inadvertently reduced their capacity.

Doing the Right Things vs. Doing Things Right

The systemic viewpoint, then, is focused on the "big picture" and the long-range view. The systematic viewpoint is focused on the task at hand and the immediate view. Both are needed, both are critical, and both must be cultivated by the owner and managers of a business if they want to be truly successful and effective. This is what Peter Drucker had in mind regarding business innovation when he said:

You can't do carpentry if you only have a saw, or only a hammer, or you never heard of a pair of pliers. It's when you put all those tools into one kit that you invent.

Perhaps the biggest challenge for business owners is developing the ability to see the "big picture" in their particular business and to make sense of all the various parts that have to be developed, maintained and orchestrated. It is easy to get caught up in focusing more on systems — doing things right — at the expense of understanding whether they are doing the right things.

Every business, including yours, exists for a singular purpose and to produce a specific result. The systematic view allows you to see how each and every function within your business is performed — efficiently and effectively. The systemic view allows you to see and orchestrate the optimum interaction of these various systems to accomplish the purpose of your business and to effectively produce its intended result.

Share Your Story

Are you stronger in systemic or systematic thinking?

Post a comment and tell us about your experience using the systemic and systematic perspective in your business.

Comments

  1. .Dave M. says:

    I love systems and automation.

    Dave Moniz

    http://automatedsearches.com

    Submitted Jul 1, 2009 1:39 PM

  2. .Angelique M. says:

    I am stronger in systematic thinking rather than systemic. That is only after realising recently what my weakness are.

    Angelique Milojevic


    http://www.businessmasterminds.com.au

    Submitted Jul 1, 2009 5:42 PM

  3. .John P. says:

    This article is interesting because it is challenging a business owner with a sort of duality in terms of mindset. On one hand delve into a system and make it work properly- then step back and look how it relates to the whole.

    Natural law is at work underneath all life, all business being nothing more then a manifestation of life for financial exchange.

    The key in my opinion is to make sure you have the right ratio of both kinds of thinking on your team to create a balance of people concerned with systemic vs. systematic.

    Our approach is the CEO has become the CRO (Chief Relational Officer) one who is constantly thinking systemic and the COO is thinking systematic.

    John

    Submitted Jul 2, 2009 12:22 AM

  4. .Bryan B. says:

    John P makes a very good point in the divided duties of the CEO and the COO.  In our organization the COO is more systemic, being in control of the entire ship, while our VP of Operations analyzes the systems for effecient operation with a specific goal in mind. 

    But even with that in mind, systematic veiwing often takes over.  Very good article and something we need to work on.

    Submitted Jul 2, 2009 3:48 AM

  5. .Ian H. says:

    Tough times, gives business owners an excellant opportunity to review and/or introduce their systems.  Building a solid base on which to grow their business in preparation of better times.

    Great article ..

    Ian Howard

    http://BusinessSystemsSecrets.com

    Submitted Jul 2, 2009 6:20 AM

  6. .lesley d. says:

    It appears we have been doing this instinctively. I am CEO and systemic minded, my COO is systematic minded. I've been calling it right-brain leftt- brain thinking, but when it's broken down in this way, it makes so much sense.

    We continuously strive for the proper balance of skill sets for this reason.

    Very good article....LOVE E-Myth!

    Submitted Jul 2, 2009 6:22 AM

  7. .Eric C. says:

    I have always been a systemic thinker.  This served me well as a Six Sigma practioner but in the corporate world, outside of the executive suite, there is little call for it and is actually punished more than rewarded.  In the world of the entrepenuer it is the key to success, to being an effective CEO.  I think the difficulty is making the time and space for systemic and strategic thinking when it is so easy to get caught up in the tactical needs of the moment.  But one without the other has severely limited value.  Great article!

    Submitted Jul 2, 2009 6:51 AM

  8. .Ron B. says:

    Good article and some very insightful commentary from eveyone. 

    I too struggle with the Ying/Yang of looking too wide sometimes (systemic) or too narrowly (systematic). My Yoga instructor talks about balance being an active pose, not one that you set yourself and you stay balanced, Instead you need to constantly re-align and reset yourself to maintain balance (/end philosphic view)

    I think the article is an active reminder to understand that its not just set and forget, nor is it all one or all the other but a balancing action. 

    As a 'big thinker' sometimes I see too much of the issue, problem, outcome, etc and it causes frustration in myself and others in creating systems to achieve the big picture.  On the otherhand my 'technical brain' gets too caught up in building a system that is correct, exact or perfect that it just never launches. This also affects my employees who are building systems as well.

    So Ive learned to balance - we schedule our time for balance, we allow for progressive improvement in our goals and systems, I encourage my people seem themselves as the building blocks of the company so that no all ideas need to come from one source. I've learned that this is an active pose like yoga, we need to make constant mini corrections and adjustments as we go along.

    I've been reading Emyth since it was publish more than 20 years ago.  I think joining the program has been one of, if not the best business decision I have ever made.

    Submitted Jul 2, 2009 8:16 AM

  9. .mark R. says:

    As I read this once and again, I realized that systematic can and will become endemic unless there is attention to the entire "system of systems". Like a living organism, a systemic organization lives, breathes and grows. If a focus remains on one or two systems, the system lives, but the organism suffers

    I believe it is easier to see and relate to the system, but systemic is the fun part. One to two steps back can reveal a fantastic scene and a wonderful understanding.

    Problem we are always forgetting to step back, realize how it all fits together and how our system relates.

    Do it yourself tonight, just stand and stare up into space. We are in the solar system, part of the universe.

    POWER ON--Mark

    www.atomicpenny.com

    Submitted Jul 2, 2009 3:18 PM

  10. .sankar h. says:

              Systemic----Leadership centric and TOP line focus

             Systematic----Management centric and bottom line focus

    Submitted Jul 4, 2009 1:27 AM

  11. .Marc L. says:

    Systematic thinking provides the opportunity for systemic thinking.  In my experience, many businesses do not have strong business processes in place.  As a result they run from one fire to another.  They don't have time or energy for systemic thinking, because they are reacting to what's happenning.

    By formalizing their processes, creating consistent results that are understood by the staff, much of this reaction is reduced.

    As the processes mature, more time is available for systemic thinking.  Trying to understand how processes interact (systemic) is not possible if the processes are not consistent.

    Submitted Jul 5, 2009 2:21 PM

  12. .Adekunle A. says:

    Great article that challenges me to develop a "balanced thinking process in business" (and life as a whole). The thought process is that every systemic decision is incomplete without considering the systematic implications and systematic decisions must consider the systemic effects as well.

    Thanks for the article!

    Submitted Jul 6, 2009 1:49 AM

  13. .Mary M. says:

    Loved this post, and was able to connect it to others doing similar thinking in my latest blog post at improvemybusinessnow.com - thanks!

    Submitted Jul 7, 2009 8:02 AM

  14. .bob m. says:

    Balance of Manager vs. Entrepreneur

    Some businesses and business leaders I have worked with needed to get systemic before they could get systematic, and other businesses need to get systematic before they could get systemic. I believe the issue points towards how much a person has a tendency to working from a entrepreneur perspective or a manager perspective or a technician perspective.

    When I was 1st introduced to e-Myth decades ago, the consultants had a testing tool that looked at how much I worked from the different perspectives. Mine ended up fairly balanced between all three - technician, manager, entrepreneur, but the perspective of knowing that everyone is unique and has their own tendancies has been helpful in working with businesses ever since.

    Learning your natural tendancies and leveraging a helpful board of advisors or directors can be very helpful in moving to the next level.

    Submitted Oct 21, 2009 4:02 PM


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