Systemic thinking is the practise of considering operations as a whole and not as individual actions or processes. A simple way of thinking about this is to
describe an action of something day to day such as making a cup of coffee.
Have a go at writing the 'system' for making a cup of coffee before you read my description,
the system for creating a cup of coffee involves multiple steps.
Purchasing the coffee (and milk / sugar)
Filling the kettle
Boiling the kettle
Preparing the mug with 'ingredients' & spoon
Filling the mug with boiling water
Stirring the mug
Each of these actions may have problems associated with them (the price of coffee, the dangers of boiling water) and in systemic thinking you would examine each step, the actions involved with them and the hazards associated.
This process would allow you to maximise the potential and minimise the risk involved at each stage of the process. In business this allows you to examine where profits can be improved and where tasks can be streamlined to work at maximum efficiency.
Flow chats software (such as Visio by Microsoft (although there are many other versions available)) can be effective tools for examining and breaking down a system.
It is important to remember a system is a 'whole' made up of parts. An eco-system in nature is a good example of a system, with different species interacting with one another and supporting each other.
When thinking about a system one must think about a number of aspects:
The way elements interact within a system [The spoon and the mug in the above example]
The outcome of the system that could not necesarily be determined by examining an individual component [The cup of coffee in the above example]
What elements can affect the running of the system that are external to it [A water shortage in the above example]
Random Elements [The kettle breaking in the above example]
Systemic thinking is vital in business as it allows you to take a hollistic approach to the outcomes of your business.