Seeing the Whole to Build Sustainable Organizations
September 8, 2025 – Ana Oliveira
Are we truly “thinking in systems” or merely “seeing systems”?
Research and real-world evidence consistently demonstrate that Lean organizations often face challenges over time, in particular a decline in performance and engagement. While reasons for this are often attributed to culture, numerous factors contribute to an organization’s long-term success. Thus, addressing the issue of long-term sustainability requires a comprehensive approach, and a reductionist strategy may not always be the most efficient solution when dealing with complex issues.
The Shingo Model is a valuable framework for navigating such challenges and building sustainable and resilient organizations. It focuses on both culture and systems and explains how these two elements are interconnected, namely, “systems drive behavior.” The structure of a system helps define and reinforce the behaviors that we want to encourage in organizations. To change specific behaviors, rather than blaming individuals, the systems that produce the undesirable behaviors must be redesigned. This process is dynamic and iterative, and it is a key component of organizational sustainability.
An enhanced awareness and the ability to recognize systems can result in significant tangible outcomes for organizations. However, we must consider whether we are truly “thinking in systems” or merely “seeing systems.” An organization may possess 30–40 properly defined organizational systems, but if the interconnections between these systems are neglected and they are viewed in isolation, we are not thinking systemically. For example, imagine a group of highly talented pianists playing in perfect harmony, a second group of violinists, also playing in unison, and a third of percussionists. Despite the individual groups being cohesive and highly skilled, if they play together, it will not work. Systems must interconnect for an organization to start speaking the same language—in this example, for them to become orchestrated.
Furthermore, it is crucial to acknowledge that distinct behaviors can emerge as the result of system interactions, producing results that were impossible to predict when the systems were designed individually. For instance, a significant change in a reward system can lead to the destabilization of and emergence of undesirable behaviors in another system. As a specific example, if a manager were to implement an initiative to encourage employees to submit two new ideas per month, this could stimulate innovation and enhance motivation. However, potential implications of this change for other systems could include additional pressure it might introduce to human resources and employee engagement systems, the risk of demotivation if ideas are suggested but never implemented, and the pressure for the financial system to offer the resources to bring the ideas to fruition. There may also be pressure or discomfort at the operational level in terms of having to adapt to new ideas and ways of working; even when a change may be regarded as beneficial, there is often a period of resistance to unfamiliar ways of working.
Thus, it is not simply a matter of impacting or redesigning a system to produce specific, positive behaviors. It is essential that we adopt a holistic approach and think beyond the system itself, as each system naturally communicates with others. This necessitates a systems map that shows the various interactions. Although it is impossible to predict every eventuality, it is key to maintain a mindset of continuous learning when designing systems, acknowledging both the positive and negative outcomes of every action while remaining agile enough to adapt when necessary.
To what extent do systems actually interact within organizations? To provide a more detailed response to this question, we can use the example of a recent Shingo Prize recipient. After thoroughly reviewing this organization’s 35 systems that have been identified as shared among Shingo recipients, we identified the interconnections of each, utilizing the recipient organization’s Achievement Report to achieve this objective.
The Shingo Institute recognizes organizations for their continuous improvement journey at three levels: the Shingo Bronze Medallion, the Shingo Silver Medallion, and the Shingo Prize, which is the highest level of recognition. The Achievement Report, a 50-page report prepared by the organization that has applied for the Shingo Challenge, contains information regarding the organization’s achievements to date, their systems, how they address each of the Shingo Guiding Principles, their performance and behavioral results, and the story of their journey. Surprisingly, we identified 184 interconnections among systems for the organization under study! While this number is already substantial, it is possible that many more interconnections exist, as only those identified explicitly in the report were counted, and these results are limited by the report’s author’s ability to summarize and the reader’s ability to interpret. Moreover, these interconnections are limited to the 35 standard systems and do not include additional systems specific to the organization, which may further increase the total number of interconnections.
This approach enables us to conceptualize the impact of systems’ interconnections in tangible terms by acknowledging their existence. However, the question arises regarding what factors contribute to the excellence of an organization. The analysis suggests that the number of formal highly interconnected systems in place in an organization is a key factor, and the maturity exhibited by these individual systems directly correlates with the overall organizational maturity. Here, it is important to acknowledge that the maturity of a system is influenced by the maturity of other systems. For instance, it is not possible to have a fully mature suppliers’ management system without also having a mature quality system in place.
Another key element is to broaden systems thinking within and beyond the organization. It is vital to cultivate a “systems thinking” mindset within your organization and across the wider ecosystem. It is insufficient for top management, team leaders, and continuous improvement managers to think in systems if this way of thinking is not fostered among every individual in the organization—and beyond. To achieve long-term sustainability, we must move away from siloed thinking, which means integrating departments and functions as well as ensuring that every level of the organization is a part of the systems-thinking process. People must be given opportunities to solve problems and observe the impact of their actions on teams, departments, and external systems. It is also vital to foster collaboration, cooperation, and “interconnected thinking” to foster collective ownership of outcomes. By encouraging such a collaborative approach, an organization can become more resilient and sustainable in the long term.
To achieve this, certain prerequisites are necessary. First, it is important to emphasize the pivotal role of leadership and top management. Individuals in these roles should adopt an open mindset and a willingness to continuously learn from others, challenge the status quo, maintain transparency, be agile in adapting to change, and provide adequate resources to facilitate transformation. These resources, which are essential and should be provided by the organization, include human capital, financial resources, time, physical or virtual space, data, technologies, tools, training, coaching and mentoring, individual development, and understanding the organizational strategy to determine how each individual can support the direction and goals the organization aims to achieve. Second, it is essential to understand the why. This means clearly explaining the importance of thinking in systems so that everyone can operate from the same perspective and speak the same language. The Shingo Institute offers training on this matter, specifically through the Systems Design workshop. It is imperative that organizations ensure that all relevant stakeholders, not only key personnel, have access to this information and can comprehend it effectively. Third, it is important that each collaborator understands that they play an active role in system-based work and that their contribution is vital for achieving a real impact.
As stated previously, behaviors are the outcome of interactions between multiple systems. Behaviors are the visible elements that reveal how systems are designed and how they interact. In this regard, it may be helpful to ask and reflect on the following questions frequently with your team:
- Which behaviors are aligned with our values, and which are not?
- Which behaviors can we observe that are helping us achieve our goals? Which behaviors can we observe that may be preventing us from achieving our goals?
- Which behaviors surprised us positively or negatively?
- Where and how do our collaborators work around the system? What does this tell us about how the system is designed?
Next, identify the systems that produce or reinforce these behaviors. The aim is to iteratively redesign these systems to produce the desired ideal behaviors.
When designing more effective systems and thereby improving organizational performance, it is not feasible to work on improving everything simultaneously. The key to success is effective prioritization and the creation of a strategic action plan, such as that pictured in the following diagram:
To identify the connections between systems, you can use a causal loop diagram to visualize the dependencies or an interdependency matrix, which can provide information on the number of connections with other systems—that is, the “strength” of each system. This helps to identify the most critical system.
Mapping systems enables us to visualize the flow of influence and conduct a what-if scenario analysis (i.e., “What are the potential consequences of altering this in the X system?”). Here, the causal loop diagram is an effective tool. When preparing your map, consider incorporating both the positive (+) and negative (-) effects to gain a comprehensive understanding of the impacts. It is also important to ensure that feedback from collaborators is considered during the process (systems thinking), as they may be aware of unwanted behaviors that you are not able to identify.
Acknowledging evolution
I would now like to discuss some specific systems that have been observed in recent Shingo recipients, as an awareness of these systems is essential for the long-term sustainability of an organization. A documentary analysis of the Achievement and Feedback reports of Shingo recipients from 2010–2025 reveals an evolution of the concept of “excellence”:
- Operational excellence: Previously, organizations focused primarily on improving operations, with little concern for the organization as a whole or its impact on the ecosystem. This trait is evident from 2010–2014 (and remains visible until 2017), especially in one organizational group where maturity progressed more “quickly”; in this instance, emphasis was placed on efficiency, quality, and productivity.
- Enterprise excellence: The transition following the previous period is noteworthy. Organizations began to increasingly realize the importance of a holistic approach and recognize that treating operations and improving the processes in an isolative way did not result in sustained improvements. There was a significant focus on the integration and management of the entire supply chain, including the management of suppliers, logistics, production, sales and marketing, customers, and other partners. The establishment of key strategic partnerships with relevant stakeholders was also a key priority. This approach enabled organizations to establish a more sustainable and resilient performance.
- Ecosystem excellence: This trait became evident in some organizations after 2019. Organizations have begun to focus on their wider impact on society, their communities, and the planet in general. Furthermore, these organizations have demonstrated an increased commitment to employee well-being and individual growth, aligning with the expectations of the new generations, who place a high value on purpose-driven roles. It is becoming increasingly evident that companies that prioritize the well-being of their employees, the environment, and their local communities while adhering to robust ethical principles are gaining a competitive advantage by fostering increased trust and enhancing their reputation.
It is imperative to adopt a strategic approach and avoid stagnation to maintain competitiveness and relevance. The value of a product or service is determined by the price that customers are willing to pay, and customer expectations are subject to change over time. Indeed, as customers ourselves, we can recognize that our own preferences have changed. Therefore, organizations must also focus their efforts on designing and implementing new systems to sustain their performance in the long term.
In the following, the ten most critical issues identified in the analysis are outlined:
- Environment, health, and safety. In the field of environment, health, and safety, a notable shift has occurred. Historically, companies have approached the issues of environmental responsibility, health, and safety by treating them as an integrated system, known as EHS, SHE, or HSE. This approach entailed the establishment of a department dedicated to overseeing these three areas, and the primary concern was compliance; they were not seen as value adding systems or activities. The recent analysis of the Shingo Prize recipients indicates a shift in trends, for which there are a number of potential reasons. First, customer priorities and expectations have changed. Customers are becoming more environmentally, socially, and ethically responsible, and they expect companies to reflect these values. This has led to a greater level of trust and attractiveness (to both new customers and potential new employees) in companies that also demonstrate these values. Second, there has been an increase in technical and complex regulations in each area of EHS. This has created a need to separate these fields to allow each to receive the necessary attention. Third, there has been a shift in organizational mindset, and these areas are now viewed as core value-adding factors, not as “extra” areas of compliance. It is important to note that the health systems of Shingo recipient organizations encompass not only the physical health of employees but also their mental health and overall wellbeing. Similarly, occupational safety in the workplace comprises both physical and psychological safety.
- Diversity, equity, and inclusion. Organizations are increasingly embracing diversity, equity, and inclusion not merely as a “tick in the box” exercise but because they recognize that diversity brings opportunity. Equity includes acknowledging that everyone is different and may not start from the same point as well as providing the resources to enable all individuals to achieve their goals. Removing barriers enables employees to succeed and perform at their best. While organizations can recruit a diverse workforce and provide equitable opportunities, inclusion remains key for ensuring that everyone is not only present but also heard, respected, and valued. This links directly with the first two principles of the Shingo Model: “lead with humility” and “respect every individual.”
- Individual development. Historically, organizations emphasized operational activities to generate value. However, many have recently begun to adopt a more holistic approach, and there is a growing focus on individuals within these organizations as a key factor in this transformation. In line with the expectations of more recent generations, exceptional organizations support ongoing professional development, thereby contributing to the organization’s success and their employees’ personal fulfillment.
- Leadership development and succession planning. In the context of sustainability, the importance of leadership development and succession planning is increasing. Since leadership involves modeling appropriate behaviors, it is essential that leaders possess the intrinsic skills and mindset necessary to ensure organizational success. Succession planning is linked to individual development, as it involves identifying and supporting employees who aspire to leadership positions. It is essential for organizational sustainability, ensuring that strategy and current culture can be maintained in the event of expected or unexpected leadership gaps.
- Social responsibility/community involvement. As systems, social responsibility and community involvement are becoming increasingly more formal and mature. Organizations are clearly committed to acting sustainably with regard to their impact on society, the environment, and the economy, beyond issues of legal compliance, brand credibility, and trust. Therefore, there is a need for sustainable growth and organizational purpose alignment to extend this sense of responsibility to direct community involvement and the establishment of cohesive, symbiotic relationships with local entities.
- Recruitment/talent acquisition. Recruitment and talent acquisition is an increasingly important system for organizations. Rather than simply filling vacancies to perform a specific function based on a candidate’s skills or experience, organizations have started to recruit based on how well candidates align with their current culture. The reasoning behind this is that it is easier to equip employees with the necessary skills than it is to change mindsets!
- Suppliers and other logistics partners development. Developing the system of suppliers and other logistics partners is key due to the interconnected nature of business operations. In today’s global economy, an organization’s performance is significantly influenced by the sustainability, quality, reliability, and efficiency of its partners. The development and management of these partners ensures that continuous improvements can be implemented and that each organization can be more resilient and agile and thereby able to navigate growing complexities and challenges.
Conclusion
I have presented here a reflective piece on the importance of true systemic thinking. Rather than simply designing systems, it is crucial to acknowledge that these systems interact with one another, and behaviors (desired or otherwise) inevitably result from these interactions. Recognizing this helps us to design more conscious and effective—and thus more sustainable—systems. Creating a culture based on systemic thinking is crucial to the success of the organization, and this exceeds simply fostering collaboration. I conclude by listing the specific systems identified in organizations that have recently been awarded the Shingo Prize, and which are vital for organizational sustainability. In a world of increasing complexity that is more interconnected than ever, understanding these systems allows us to compare and reflect on whether we are on the right path of evolution!