Systems Thinking
Systems thinking is the ability to see beyond individual decisions to understand how components interact, how incentives align (or conflict), and what second and third-order effects will emerge. It's the difference between solving a local problem and understanding the ecosystem that created it.
The Guide
4 key steps synthesized from 6 experts.
See the system, not just the parts
Strategic thinking means seeing the invisible rules, culture, and interoperability that govern how products and organizations succeed or fail. Before solving a problem, map out all the players, their incentives, and how they interact with each other.
Featured guest perspectives
"What does it mean to be a strategic thinker? It means to see the system."— Seth Godin
"Systems thinking. Think of all the players in the system, think of all of their incentives and how they interact with each other."— Sriram and Aarthi
Think in stocks and flows
Model reality using 'stocks' (things that accumulate) and 'flows' (movement between stocks). Apply this to business processes like hiring pipelines, customer funnels, or engineering capacity. This framework reveals bottlenecks and leverage points that aren't obvious from static analysis.
Featured guest perspectives
"Systems thinking is basically you try to think about stocks and flows. So stocks are things that accumulate and flows are kind of the movement from a stock to another thing."— Will Larson
Practice second-order thinking
Think beyond the immediate decision to understand how it impacts future constraints and ecosystem dynamics. Ask: if we make this choice, what does it enable or prevent six months from now? What behaviors will it incentivize that we haven't considered?
Featured guest perspectives
"Basically what second order thinking is is you being able to think beyond the decisions that you're making today."— Nickey Skarstad
"I do think that the skillsets that you think through and you try to manage in a complicated ecosystem are quite different."— Hari Srinivasan
Build systems to solve recurring problems
When you encounter recurring manual pain, don't just solve it once - build a system or framework to address it automatically going forward. This 'systematizing' instinct is what separates operators from systems thinkers.
Featured guest perspectives
"Tell me about some process or something that you had to do in your job that you really hated and that you ended up just trying to automate a way or build a system around it to make it better."— Melissa Perri + Denise Tilles
Common Mistakes
- Optimizing locally without understanding impacts on the broader system
- Ignoring incentive misalignment between different players
- Solving problems manually instead of building systems to prevent recurrence
- Focusing on first-order effects and being surprised by downstream consequences
Signs You're Doing It Well
- You can map the full system of players and incentives before proposing solutions
- Your decisions account for second and third-order effects
- Problems you solve stay solved because you addressed the systemic cause
- You can predict how changes in one area will ripple through the organization
All Guest Perspectives
Deep dive into what all 6 guests shared about systems thinking.
Hari Srinivasan
"I do think that the skillsets that you think through and you try to manage in a complicated ecosystem are quite different."
Melissa Perri + Denise Tilles
"Tell me about some process or something that you had to do in your job that you really hated and that you ended up just trying to automate a way or build a system around it to make it better."
Seth Godin
"What does it mean to be a strategic thinker? It means to see the system."
Sriram and Aarthi
"Systems thinking. Think of all the players in the system, think of all of their incentives and how they interact with each other."
Nickey Skarstad
"Basically what second order thinking is is you being able to think beyond the decisions that you're making today."
Will Larson
"Systems thinking is basically you try to think about stocks and flows. So stocks are things that accumulate and flows are kind of the movement from a stock to another thing."
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