Since the onset of the industrial revolution, organizations have constantly had to renew their strategies in the face of rapidly changing market conditions and technological advancements. However, in recent years, the increasing complexity and uncertainty in industry have required organizations to adopt a broader perspective and develop more comprehensive strategies. In this context, the integration of systems thinking and innovation plays a crucial role in helping organizations achieve their sustainability and innovation goals. Systems thinking focuses on understanding the relationships between the components of a system, while innovation aims to create valuable new solutions by leveraging these relationships. The integration of these two approaches allows organizations to move beyond surface-level problems and gain a deeper understanding of complex processes.

Systems thinking provides an analytical approach by considering how each component affects the entire system. According to Sterman (2000), this mode of thinking helps organizations understand their dynamics by examining fundamental concepts such as feedback loops, stocks, and flows. Systems thinking focuses not only on analyzing individual components but also on how these components interact with one another. This interaction is especially critical in large organizations and complex industrial processes, as small changes can significantly impact the overall performance of the system.

Meadows (2009) notes that understanding how systems operate helps managers make more informed strategic decisions. Systems thinking enables processes at every level, from management to operations, to be viewed from a broader perspective. As a result, leaders gain a better understanding of how not just one part, but the entire organization functions.

Integration of Innovation and Systems Thinking

The integration of innovation with systems thinking ensures that organizations not only develop innovative products and services but also consider the impact of these innovations on other parts of the organization. Gharajedaghi (2011) emphasizes the importance of the analytical approach provided by systems thinking for successful innovation. Systems thinking helps manage innovation processes more effectively because it goes beyond simply creating a new product or service; it also considers how this product or service will be integrated into the organization’s overall structure.

In this regard, research from MIT Sloan (2021) suggests that many organizations fail to account for human factors when implementing technological innovations, which can lead to poor outcomes. For example, when investing in new technology, an organization must consider how the technology will be adopted by employees, what processes will change, and how these changes will affect the organizational structure. Otherwise, large investments in technology may not yield the expected returns.

Contribution of a Holistic Approach to Organizational Transformation

A holistic approach enables organizations to focus not only on short-term goals but also on achieving long-term strategic objectives. This approach makes organizations more flexible, adaptive, and innovative. Meadows (2009) highlights that using systems thinking to consider long-term effects helps organizations adapt more quickly to changing market conditions. Additionally, projects like the MIT Sloan Global Organizations Lab (GO-Lab) allow organizations to integrate data from various disciplines, enabling them to make strategic decisions from a broader perspective.

In industrial organizations, understanding how processes across different units are interconnected is particularly important when making strategic decisions. This understanding allows organizations to address not only current problems but also to increase their ability to seize future opportunities.

Balancing Technology and Human Factors

For a successful innovation process, it is essential to balance technology and human factors. Czichos (2022) argues that technological advancements cannot be considered independently of human capital, as this can lead to long-term failures. While technology is a critical component of innovation, the skills and adaptability of the people using the technology must also be considered. If the human factor is overlooked, the full potential of the technology cannot be realized.

In this context, the effective use of human resources in innovation processes contributes directly to the successful implementation of technology and the overall success of the organization. The balance between human and technological elements also enhances the sustainability of innovation.

The integration of systems thinking and innovation with a holistic approach significantly enhances the ability of industrial organizations to manage complexity and produce innovative solutions. This integration not only helps organizations solve current problems but also allows them to assess future opportunities and become more resilient to potential challenges. Therefore, industry leaders and managers should approach systems thinking and innovation together to ensure long-term success.