System Thinking and Its Application in Project Management

This paper discusses the importance of system thinking in project management and its various tools and techniques. It also critically analyzes the BP Deepwater Horizon blowout incident and suggests ways in which project managers can use system thinking to solve project problems.

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Table of Contents
Introduction:...............................................................................................................................................2
System thinking:..........................................................................................................................................2
Systems thinking tools.................................................................................................................................2
General systems management....................................................................................................................3
Organizational structures, forms and culture..............................................................................................3
Engineering risk, risk management..............................................................................................................3
Portfolio alignment......................................................................................................................................4
Business value.............................................................................................................................................4
Portfolio management process cycle...........................................................................................................4
Organizational maturity...............................................................................................................................4
Reasons behind the incident.......................................................................................................................5
Conclusion...................................................................................................................................................6
References...................................................................................................................................................7
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Introduction:
System thinking is important for business organization and project. In this paper several tools
and technique of the system thinking that are used in organization are briefly discussed. I t also
includes several theories i.e. risk management, portfolio alignment, general systems
management, business value etc. it also critically analyses the issues with BP Deepwater horizon
blowout and the tools that might help project manager of the company to solve project problems.
System thinking:
System thinking is a complete approach to analysis which focuses on the way different
constituent part of system are interrelated and how these systems work within the framework of
larger system and work over time. The practice of this assists to explore the interrelationships,
perspectives and boundaries (Guide to the Systems Engineering Body of Knowledge (SEBoK),
2017). It is a useful approach that also helps to address the complex situations which can be
evaluated in a systematic manner.it basically supports to make decision by establishing proper
understanding of the condition and by evaluating the relation between several parts of the
system. It helps to understand the working of system in an easier way.
Systems thinking tools
There are several systems thinking tools which have their own significance and are developed to
support by the help of each other (Miller, 2002). These tools provide depth understanding and
information and can be used in combination with other. Some of the system tools are describes
below:
Brain storming tools: The Double Q diagram in brain storming tools which is developed help to
look at the whole system in a question. In this tool both sides of the problem are visible and
remains balanced (Lo, 2015). It is also called as effect and cause diagram which provides visual
map of the important factors that are involved. These identification of factors helps to explore the
relation between the identified factors.
Dynamic thinking tools: it includes tools like behaviour over time graph, casual loop diagram
and system archetype. It helps to trace challenges and issues as a course of performance over the
time.
Structural thinking tools: Policy structure Diagrams, Structure behavior pairs and Graphical
Function Diagrams are the main component of the system thinking tools. Graphical system tools
are useful to clarify nonlinear interrelation between different variables. Structure behavior pairs
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involves basic dynamic structures which assists as a building blocks to develop several computer
models like S-shaped growth. Policy structure diagram creates a conceptual map for decision
making process that is placed in the organization.
Computer based tools
It involves computer model, management flight stimulator, learning laboratorya are involved in
computer-based models. It demands high level of technical proficiency.
There are several ideas and theories which can be used in system thinking to an organization and
a project which will help in various ways are discussed below:
General systems management
It helps to understand the complex problems and phenomenon of the organization and a project.
it focuses on the structure of the organization rather than the function of the system (Guide to the
Systems Engineering Body of Knowledge (SEBoK), 2017). It explains that complex systems
share few fundamental organizing principles regardless of their purposes, and these principles
can also be modelled mathematically. It is a concept which can be used in an organization to
grow and manage organization and its projects based on various functions involved in it. It also
shows positive results from the projects which are managed by using system thinking tools.
Organizational structures, forms and culture
Organisational culture is a system of values, assumptions, attitudes, and norms that are
manifested through various symbols that are adopted and developed by the members of an
organisation through mutual experience and it help them to understand the world around them
and how they behave in it (Kerzner, 2013). Organizational structure is a comparatively stable,
spontaneous or planned, pattern of interactions and actions that the member of the organization
undertake to achieve the goals of the organization. They both determine the behavior of the
members in the organization but in different ways. Organizational form is proposed on the basis
of the object, labor power, division and means of labor, control of labor at institutional or
organizational level.
Engineering risk, risk management
There are several risk factors for an organization that might occur such as engineering risks that
is possible failures that have negative impacts as a part of flaws in engineering or design. So, it is
important to make plans and strategies to control or minimize the effect of risks as they are
inevitable (Kerzner, 2013). Risk management and engineering risk are import to determine the
possible risk that might occur and damage the project. It also helps to evaluate risks on the basis
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of past experiences and information which is important to make risk management plan. It also
involves risk mitigation which helps to decrease the negative consequences of the risk events and
ways to avoid it.
Portfolio alignment
It is vital to align business strategy and ongoing project as it has positive impact on the
performance of the organisation. It is popular practice that is adapted by most of the modern
business. It uses process called road mapping to align operations and business plan of the
organization.
Business value
Business valuation is the process to examine various economic factors by the use of
predetermined formulas of business (Viana & Maria, 2016). It is an important aspect for very
organization so project manager must know to demand properly defined and understood business
value. To deliver proper business value, few steps must be followed that includes: to recognize
main vision of the project, to have clear idea of its value, convert value and its vision to project
team, to successfully deliver business value, measure value after project completion.
Portfolio management process cycle
It involves steps as follows; determination of requirement of business, assessment of business
care, defining care, identifying appropriate vendor for the project. it is a continuous process of
selection of appropriate project-oriented initiatives that delivers maximum business value or
maximum return on investment.
Organizational maturity
Maturity of an organization is also important as without adequate maturity decisions, process and
function of the organization cannot be done vigorously (Walt, Zavatsky, & McGuire, n.d.). It is
an estimation of ability and readiness of the business organization via its workers, technologies,
process and measurement practices.
Reasons behind the incident
Deep horizon oil spill incident occurred in 2010 in the Gulf of Mexico. Transocean owned and
operated this Deepwater horizon rid and it was rented by an oil company called BP. On April
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20, 2010 the explosion occurred that tore through this Deepwater horizon rig, after its worker
completed drilling the Macondo well in the Gulf of Mexico that began huge economic,
environmental disaster. The explosion that tore through the Deepwater Horizon drilling rig last
April 20, as the rig’s crew completed drilling the exploratory Macondo well deep under the
waters of the Gulf of Mexico, began a human, economic, and environmental disaster.
According to National Commission report on this incident, this could have been prevented. They
investigated his incident for almost 6 months and found that the immediate cause of this was due
to several indescribable mistakes made by BP, Transocean and Halliburton are the three
companies associated with the project. National commission revealed that there was a systematic
failure of these companies in the risk management which they placed in distrust the safety
culture of the whole industry. It also found issues in regulatory, technical and management
system for this project ( National Commission on the BP Deepwater Horizon Oil Spill and
Offshore Drilling, 2011). Deepwater energy production and exploration, especially at the
boundary of the experience, involved hug risks, but none of the companies or government was
prepared. These companies lack adequate risk management and adequate engineering risk
management system which was one of the major cause of the blowout. The design of well was
not properly managed and it was only done at the last stage. The cement slurry which was made
to close the bottom part of the well was very inappropriate and was made in the absence of any
kind of supervision or review by supervisors or engineers. While evaluating the cement seal it
showed some issues but it was completely ignored by the professionals who did not had
sufficient training and experience. There was a problem in the procedure as the drilling mud was
removed which was unnecessary because it cud have helped by stopping hydrocarbons into the
well. There were few signs of risks but was completely ignored, even after the blowout they
avoid it without taking any efficient step to control it. It was all due to incompetent management
system of the companies, carelessness of the team members that led to such disaster affecting
human lives, environment, and economy.
They were not able to identify risks earlier, identification of risk and proper plan plan to avoid it
could have prevented the blowout. In order to operate project smoothly it is important to have to
have risk management plan. Continuous evaluation of the project is also crucial which can help
to identify issues that may arise and hamper the process. So, these drawbacks of management
system have contributed in the disaster.
Proper communication between team people associated with the project, following proper
accurate procedures and processes and evaluation on regular basis is important for any project.
They did not apply system thinking to the project. There were man technical issues associated
with this project ( National Commission on the BP Deepwater Horizon Oil Spill and Offshore
Drilling, 2011). The presence of technical issues which includes: inappropriate cement slurry
deigns, primary cement that failed to separate hydrocarbons, contamination of drilling mud,
failure of gross cement slurry. Presence of engineering risks had increased the risk of the
disaster. Proper examination for the engineering risk in project is important to find out defect in
the process that will help to prevent any kind of mis happenings. Therefore, risk management
system which involves risk identification, evaluation and risk mitigation is important to avoid
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risk and be prepared with the plan in case of any risk events ( National Commission on the BP
Deepwater Horizon Oil Spill and Offshore Drilling, 2011). In this case there was no risk
management plan, no supervision of experts and they did not consider to use system thinking for
the project. system thinking helps to find the interrelationships, perspectives and boundaries and
address complex situations and evaluate it. So, application of this might help project managers of
this company to solve issues. It also assists in decision making process and analysis of various
components to find out effect or significance of using them in a process by using its tools and
techniques. So, few tools of system thinking might help project managers of this company which
includes dynamic thinking tools and brain storming tools.
Conclusion
It is evident from the paper that system thinking is important for the organization and application
of its tools helps in various ways such as nonlinear interrelation between different variables,
decision making process etc. The reasons behind BP Deepwater Horizon oil spill disaster were
poor management system that totally ignored possible risks and its signals, unexperienced and
unexperienced workers, lack of supervision of process by experts or engineers, lack of effective
communication between teams associated with the projects etc. there were several other
regulatory, management and technical issues that was determined by National commission on
this blowout. Proper strategy, supervision of experts, risk management plan etc. could have
stopped this disaster. So, by the application of several tools of system thinking and applying
approaches or theories like general systems management, portfolio alignment, risk management
systems, business value, this project could be regulated and prevented from possible risks and
risk events.
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References
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project selection techniques: Understanding the role of structural alignment.
International Journal of Project Management, 33, 126-139.
https://doi.org/10.1016/j.ijproman.2014.03.002
Kerzner, H. (2013). Project Management t : a systems approach to planning, scheduling, and
conrolling. John Wiley & Sons.
Miller, J. (2002, October 3). A proven project portfolio management process. Retrieved from
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portfolio-management-process-8503
National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. (2011).
Retrieved from Macondo:
http://www.wellintegrity.net/documents/ccr_macondo_disaster.pdf
Viana, J., & Maria, C. (2016). Enhancing Organizational Project Management. Universidade
Federal de Pernambuco, 26(2), 313-329 .
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project-management/
Lo, R. (2015). What is the Difference Between Being Project-Oriented vs. Service-Oriented?
Retrieved from vmware: https://blogs.vmware.com/accelerate/2015/05/difference-
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Horizon-oil-spill-of-2010
Walt, W., Zavatsky, D., & McGuire, R. (n.d.). Emerging risks and Enterprise Risk Management.
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