Systems Thinking: How Billionaires Think

Summary

This video script delves into the concept of systems thinking, a cognitive approach that has driven the success of many entrepreneurs and professionals. It illustrates how viewing life as interconnected systems rather than isolated events can lead to profound insights and better decision-making. The speaker uses examples from nature, business, and everyday life to explain the principles of systems thinking, emphasizing the importance of understanding inputs, processes, outputs, feedback, and environment. By adopting this mindset, individuals can improve their business strategies and personal lives, fostering growth and innovation.

Takeaways

• 🧠 Systems Thinking Fascination: The speaker has a deep interest in systems thinking and its role in the success of individuals, which has become an obsession for them.
• 🌐 Interconnectedness: Successful people view everything as interconnected systems rather than linear chains of cause and effect, which is a hallmark of systems thinking.
• 🌿 Nature as a Model: Nature exemplifies the ultimate system, with its complex and intelligent interconnections that are often beyond human comprehension.
• 🔥 Forest Fires Insight: The unintended consequences of preventing small forest fires can lead to larger disasters, illustrating the importance of understanding systems' dynamics.
• 🤝 Social Systems: Human society operates on various interconnected systems, such as legal and social norms, which individuals must understand to function effectively.
• 💡 Business as a System: Business operates as a system with components like accounting and online platforms that interconnect and must be managed as a whole for success.
• 🔑 Component Thinkers vs. Systems Thinkers: Component thinkers focus on isolated parts, while systems thinkers see the whole and understand how parts interact and affect each other.
• 💰 The Cost of Short-Sightedness: Failing to adopt a systems thinking approach can lead to decisions that negatively impact the overall business, such as neglecting customer support.
• ⚙️ System Components: Every system consists of inputs, processes, outputs, and is influenced by the environment, with feedback loops playing a critical role in system behavior.
• 🌞 Influence of Environment: External factors like weather can significantly affect internal systems, such as a person's mood and productivity.
• 🛠️ Action Steps for Systems Thinking: To become a systems thinker, one should analyze situations by identifying inputs, processes, outputs, feedback, and environmental influences.

Q & A

What is systems thinking and why is it important for success?

Systems thinking is an approach to problem-solving that views everything as interconnected systems rather than isolated parts. It is important for success because it allows individuals to understand the bigger picture, how components interact, and the impact of those interactions on the whole system, leading to more effective decision-making and innovation.

How does the speaker define success in relation to systems thinking?

The speaker defines success in relation to systems thinking as the ability to view everything as a system, to think through things and visualize interconnected systems in one's mind, rather than a linear chain of cause and effect.

What are some examples of systems mentioned in the script?

Examples of systems mentioned in the script include the solar system, ecosystems, social systems, legal systems, language systems, numbering systems, and various bodily systems within a human body such as the immune, cardiovascular, respiratory, and nervous systems.

How does the speaker describe the relationship between nature and systems thinking?

The speaker describes nature as the ultimate system, highlighting its interconnectedness and the way it constantly balances itself. Nature's intelligence is seen as surpassing human understanding, with systems like the water cycle and the effects of forest fires demonstrating the complexity and interdependence of natural processes.

What is the concept of emergence in systems thinking?

Emergence in systems thinking refers to the complex behavior that arises from simple rules. It is the idea that by setting a few basic rules, complex and often unexpected patterns and behaviors can emerge without the need for centralized control or detailed micromanagement.

How does the speaker differentiate between a component thinker and a systems thinker?

A component thinker focuses on individual parts without considering the whole system and how the parts interconnect, often missing the bigger picture. In contrast, a systems thinker views everything as interconnected and understands that changes in one part can affect the entire system, leading to a more holistic approach to problem-solving.

What is the role of feedback in systems thinking?

Feedback in systems thinking is a mechanism where the output of a system directly affects its input. It is crucial for understanding how changes in one part of the system can lead to changes in another part, creating a dynamic and often exponential effect on the overall system behavior.

How does the speaker relate systems thinking to business success?

The speaker relates systems thinking to business success by emphasizing the importance of viewing a business as a system with inputs, processes, and outputs. Successful entrepreneurs and business leaders understand how all aspects of their business are interconnected and how optimizing the system as a whole can lead to better outcomes.

What is the significance of the environment in systems thinking?

In systems thinking, the environment represents external factors that influence the system. It is important to consider how changes in the environment can affect the inputs, processes, and outputs of a system, as everything is interconnected and not operating in isolation.

Can you provide an example of how systems thinking can impact business decisions, as mentioned in the script?

An example from the script is the case of an accountant who might view expenses on Facebook ads as a waste without understanding that these expenses can lead to profits. A systems thinker would see the interconnectedness of expenses and profits, recognizing that strategic spending can generate income for the business.

What are some action steps suggested by the speaker for becoming a systems thinker?

The speaker suggests analyzing situations by identifying inputs, processes, outputs, and feedback loops. They also recommend considering the environment's influence and understanding the relationships between components. Additionally, the speaker advises against siloing and instead promotes emergence, interconnectedness, and synthesis over analysis.

Outlines

00:00

🤔 The Fascination with Systems Thinking

The speaker introduces the concept of systems thinking, which is a way of understanding how successful individuals approach problem-solving and decision-making. They express a long-standing curiosity about what sets successful people apart, particularly in their cognitive processes. The speaker shares their journey of studying systems thinking obsessively to understand the interconnected patterns of thought that successful people use, which differs from the linear thinking of most people. The goal of the video is to explain systems thinking, demonstrate its impact on success in business and life, and guide viewers on how to adopt this mindset.

05:01

🌿 Examples of Systems in Nature and Society

The speaker provides examples of systems from the natural world, such as the solar system and ecosystems, to illustrate the interconnectedness and balance within these systems. They emphasize the complexity and intelligence of nature, which is a system that is constantly self-regulating and adapting. The speaker also extends this concept to societal systems like legal and social norms, highlighting that humans are part of various interconnected systems that dictate behaviors and interactions. The importance of understanding these systems is underscored to navigate effectively within them.

10:04

💡 The Power of Systems Thinking in Business

The speaker discusses the application of systems thinking in business, likening a business to a complex system with various interconnected components. They argue that successful entrepreneurs and employees are those who can see the bigger picture and understand how individual parts of a business system affect each other. The speaker contrasts systems thinkers with component thinkers, who focus on isolated parts without considering the overall system, leading to a limited and often ineffective approach to business challenges.

15:05

🔑 Understanding the Components of Systems

The speaker breaks down the fundamental components of a system: inputs, processes, outputs, and the environment. They explain how these elements interact and influence each other, using the example of a human being as a system where inputs like sleep and food quality directly affect outputs such as happiness and productivity. The speaker also introduces the concept of feedback loops, where outputs can influence future inputs, creating a dynamic and self-regulating system.

20:06

📈 Systems Thinking and Business Scalability

The speaker applies the concept of systems to business scalability, emphasizing the importance of testing systems at a small scale before expanding. They discuss the role of web traffic as an input, automated webinars as a process, and customer acquisition as an output in the context of their business. The speaker also acknowledges external factors such as competition and market conditions that can influence the system's performance, highlighting the need for systems thinkers to adapt and respond to these environmental changes.

25:08

🔄 The Importance of Feedback Loops and Environmental Factors

The speaker delves deeper into the role of feedback loops in systems, using the stock market as an example of how prices can be influenced by the actions of investors, which in turn are influenced by the prices themselves. They stress the importance of considering the environment in which a system operates, as it can significantly impact the system's effectiveness. The speaker also discusses the potential for positive feedback loops to generate exponential growth, both in crowds and in business.

30:10

🛠 Becoming a Systems Thinker

The speaker provides actionable steps for viewers to adopt a systems thinking approach. They suggest analyzing situations by identifying inputs, processes, outputs, feedback, and environmental factors. The speaker encourages viewers to see everything as interconnected systems and to consider the broader implications of each component within the system. They offer a PDF for download to help viewers learn and apply systems thinking to their own lives and businesses.

Keywords

💡Systems Thinking

Systems thinking is a core concept in the video, defined as an approach to problem-solving that views everything as interconnected parts of a whole. It is related to the theme as it explains how successful individuals, regardless of their field, perceive and manage complex situations by understanding the relationships and interactions within a system. The script illustrates this with examples such as the solar system, ecosystems, and business operations, emphasizing the importance of seeing the 'big picture' rather than isolated components.

💡Interconnectedness

Interconnectedness refers to the concept that all elements within a system are linked and influence each other. In the video, it is a fundamental aspect of systems thinking, highlighting how successful people recognize the relationships between different parts of a system. The script uses the example of nature's ecosystem, where trees, water, and the sun are all interconnected, to demonstrate how systems thinking can be applied to understand complex dynamics.

💡Feedback Loop

A feedback loop is a process within a system where the output of the system becomes an input that influences the system's behavior. The video explains how feedback loops can lead to exponential growth or decline, as seen in crowd formation or stock market fluctuations. The concept is integral to understanding how systems can self-regulate and how changes in one part of a system can have cascading effects on the whole.

💡Emergence

Emergence is the idea that complex patterns and behaviors can arise from simple rules within a system. The video script discusses this in the context of business strategies and niche markets, suggesting that by allowing simple rules to guide actions, rather than controlling every detail, more innovative and effective outcomes can emerge. It contrasts with the approach of 'siloing,' where rigid control can stifle creativity and adaptability.

💡Component Thinker

A component thinker, as described in the video, is someone who focuses on individual parts of a system without considering the whole. This mindset is contrasted with systems thinking, where the emphasis is on understanding how parts interact and contribute to the overall system. The script uses the example of an accountant who might view expenses in isolation, missing the broader picture of how those expenses can generate profit.

💡Environmental Influence

The environment is portrayed in the video as an external factor that can significantly impact a system. It discusses how systems do not operate in isolation and are affected by external conditions, such as weather affecting mood and productivity. The video uses this concept to emphasize the importance of considering the broader context when analyzing or improving a system.

💡Siloing

Siloing is the practice of isolating different areas of activity or thought, which can limit the potential for creative and innovative outcomes. In the video, it is presented as the opposite of emergence, where rigid categorization and control prevent the natural evolution and adaptation of ideas. The script warns against the dangers of siloing in business strategies and encourages fostering diversity and adaptability.

💡Inputs and Outputs

In the context of systems thinking, inputs and outputs are fundamental components of a system. Inputs are what goes into the system, while outputs are what the system produces. The video script explains that understanding the relationship between inputs and outputs is crucial for effective systems thinking, as it helps to identify what needs to be changed to achieve desired outcomes. Examples given include the impact of sleep and diet on personal performance and the role of web traffic as an input in a business system.

💡Processes

Processes are the mechanisms or activities within a system that transform inputs into outputs. The video emphasizes the importance of understanding these processes in systems thinking, as they are the actions or steps that connect inputs and outputs. The script uses the example of an automated webinar as a process in a business system that takes potential customers (input) and through the presentation, aims to convert them into actual customers (output).

💡Systems Balance

Systems balance refers to the natural tendency of systems to seek equilibrium or stability. The video script discusses how systems, like nature, are constantly adjusting to maintain balance, using the example of forest fires and the water cycle to illustrate this concept. It suggests that understanding systems balance is important for systems thinkers to predict and manage the effects of changes within a system.

Highlights

Systems thinking is a key to success for many entrepreneurs and high-performing individuals.

Successful people view everything as interconnected systems rather than a linear chain of cause and effect.

Examples of systems are the solar system, ecosystems, and societal structures like legal and social norms.

Nature is the ultimate system, constantly balancing and self-regulating through interconnected elements.

The concept of systems thinking can be applied to business, where every component affects the whole.

Systems thinkers understand the importance of the whole system's health over individual components.

Component thinkers often miss the bigger picture and fail to see how their actions affect the overall system.

Systems thinking in business involves considering the entire process from inputs to outputs, including the environment's influence.

Feedback loops are a critical aspect of systems, where outputs can affect inputs and create exponential growth or decline.

Understanding systems thinking can help in personal development, as inputs like sleep, food, and information directly impact outputs like happiness and knowledge.

Systems thinking can reveal the interconnectedness of various aspects of life and business, such as customer support's impact on sales.

The importance of considering the environment and external factors that can influence a system's performance.

How systems thinking can lead to the emergence of unique and successful business strategies that are not confined to silos.

The difference between analyzing parts in isolation versus synthesizing the whole system for a more accurate understanding.

Practical steps to adopt systems thinking, including identifying inputs, processes, outputs, feedback, and environmental factors.

The transformative effect of systems thinking on personal and professional life, encouraging a holistic approach to problem-solving.

Transcripts

everyone seemed Urban's here and today I

want to tell you about systems thinking

and how most successful people think now

Systems thinking is something that you

know has fascinated me for a long time

and I've always been looking at you know

some people who are really successful

like entrepreneurs but even employees

and people who you know are really good

at anything and I've been trying to

think you know what really separates

them why are they different how come

they can see things that that other

people can't and what goes on in their

brain like how do they think differently

than normal people and this thing has

fascinated me for a long time and I've

really tried to study it and you know

it's even become a point of obsession

where I've been trying to figure it out

and after a long time after years you

know I figured out that most successful

people it doesn't matter what field

they're in their systems thinkers and

what that means is they view everything

as a system and how they think through

things and how they visualize things in

their mind is interconnected systems not

linear

like you know chain of cause and effect

and I'm gonna explain this to you in

this video and I'm gonna show you you

know how as systems thinker thinks I'm

gonna show you how you can become a

systems thinker and how this has an

immediate and profound effect on the

results that you'll get in your business

and in your life so first of all like

what is assistant and what is systems

thinking well it doesn't matter where

you look in the world like the world is

full of systems they're everywhere and

I'll give you some examples like we have

the solar system all right that's what

it's called and it's called a solar

system because there's all of these

different planets and they all you know

rotate around each other and all of them

affect how like what happens with other

things it's all interconnected and the

solar system is basically moving it's

interactive and it's trying to balance

all the time all right and then within a

solar system we have like earth and

in with an earth we have an ecosystem

all right that's what nature is and the

ecosystem is what we all live in

you know there's trees that produce

oxygen and to do that they need water

which comes from rain and clouds and

also the Sun which you know which

provides which heats the earth and then

the the water evaporates rises up forms

clouds drops down and you know it's a

fascinating thing to look at because one

of the best systems in the world well

actually this is hands-down the best

system ever is nature you know and if

you think about it like nature it is

it's smarter than any one of us on earth

by a mile like we cannot figure it out

we still can't predict the weather and

you know we still can't really predict

anything but nature is it continues to

outsmart us all the time and what nature

is doing is it's it's all interconnected

right you've got like the Sun and that's

interconnected by heating water that's

like in rivers and in the oceans on

earth and then that's evaporating it's

coming in and forming clouds and then

the clouds are moving around with wind

and they're spreading rain into

different areas areas which might need

water and it's the Sun is taking that

water out of other areas that that have

a lot of water so you know nature is

trying to balance itself all the time

and even some things that you know we

think we humans think are bad for a

classic example is like forest fires

right like it's fascinating a lot of

humans will most humans always thought

you know forest fires are bad and so

what they did is they decided to put an

initiative in place to try and stop

forest fires all together and then what

happened as they thought they were

successful because they were able to

stop some forest fires for a long time

but then what happened is one big gnarly

forest fire just swept through and just

annihilated everything and then in

hindsight they realized that those small

bush fires that happen all the time

that's Nature's Way of getting rid of

the debris that's on the forest floor

so that it never piles up too high and

that it burns off and it causes small

fires and small fires are actually a lot

better than one big catastrophic fire

right and so by preventing those fires

they actually caused a bigger one and

this is a classic example of you know

why nature is a lot more intelligent

than their nice humans and it's the

ultimate system and you know it goes

further than that there's you know if

you if you think into society and

different humans and they're

interconnecting you know we've got

social systems we've got a legal system

you know that the legal system is

different laws and how all of those laws

interconnect social systems you know

those are different social norms and

we've got systems for operating you know

if a human wants to interact in in

society they it's very hard for them to

just make everything up and go out there

and say and do whatever the hell they

want they won't be able to communicate

with other people they won't be accepted

and you know they won't really be able

to integrate with the social system API

because they don't know the protocols to

to call into that thing and communicate

things and so you know we have to learn

all of these different systems in order

to operate within the system and as you

start going deeper into this thing you

realize that everything is really a

system we've got a language system we've

got a numbering system you know when

we're educated we learn the number

system which is just very simple numbers

and then we learn how to you know we

learn a language like English or Chinese

or whatever and the languages are just

built up of words and the

interconnections of those words and

numbers are just made up of numbers and

the interconnection of those numbers

creates the system so we learn these

elementary building blocks that then can

be used to interconnect and communicate

and do all of these things and without

knowing the number system or without

knowing a language system and without

knowing the legal system or the social

system then a human being cannot operate

in this world the way it is right now so

you start to get my point and then it

goes you know even deeper like here's

all the

and even all of the systems within your

body you know you've got your immune

system your cardiovascular system your

respiratory system your digestive system

and then you've got your reproductive

system and then your muscular system

your sensory system your nervous system

right it goes on and on and it there's

systems within systems and when you

really start to look you you realize

that all life really is is all of these

different systems at all different

levels and all of them interconnect now

why am I talking about all of this and

how does this actually help you in

business well business is you know a

system again you know we've got an

accounting system to try and figure out

you know if we're making a profit or a

loss we have you know all sorts of

online systems

right there's Google there's Facebook

there's you know in if you're going to

use a software like if you're going to

use a landing page software like

clickfunnels that's a system you've got

to learn that system and how what its

components are and how those components

interconnect and what I've found is that

the people who do really well as

entrepreneurs and really well in life as

well and our best hires you know the

people that are just exceptional they're

all systems thinkers and why that's

important is these days I see a lot of

people who are not systems thinkers and

what's the opposite of a systems thinker

well it's really like a component

thinker right and what that means is

that instead of viewing the whole and

how the whole has all of these moving

parts and how all these moving parts

interconnect they just see a piece and

they just see this piece frozen in time

like it's static and you know all they

know is this piece but they don't know

how this piece fits into a larger whole

and changes and affects other things

within the whole right and in business

like the piece is never important what

what is important is the whole in the

well-being of the whole and the whole is

the business right so a classic example

of this you know might be so might be an

accountant right and this is true this

is this is like accountants a notorious

for this

a lot of accountants they're so

closed-minded and narrow-minded that all

they can see and think about is just

like the P&L and balance sheet that

that's all they see and they're just

confined to thinking about things as

accounting so they might look at our

expenses for Facebook ads and be like oh

my god this is this is stupid why are

you spending this much money on Facebook

ads like why are you spending millions

of dollars on it this is a waste this is

an expense and what that accountant

can't see is that you know when we spend

money on ads we actually that's the

action right which is an expense but

then the reaction of that action is that

we make a profit now that's not always

true you that's that doesn't mean that

if anyone's Ben's money on ads they're

gonna make a profit but we do it in a

way that does that and so you know you

have to take your time to explain it to

these people and they still really can't

get it and I'm like man what the hell is

wrong with this person like if I put

$1.00 in drum machine and $3 comes out

why would I limit my putting of dollars

into the machine

all right that's wouldn't accountant

thinks you should do well that's what a

bad one things you should do right

because they can't see the bigger

picture they can't see how all of these

things interconnect so they just see

expenses as bad and they can't see how

an expense can actually create income

and their component thinkers you know

that they can only see their little

thing and another example of this is

basically you know a lot of employees

who were just narrow-minded in their

little area so you might have someone in

customer support who you know who was

who is answering support tickets in a

particular way and doing things in a

particular way not to not thinking about

how that's going to affect the larger

whole and you know they might think oh

if I do this then it might come back and

effect finance or it might come back and

effect you know our live chat web site

team or it might affect you know another

team right they don't think about how

all of these things interconnect they

just think things operate in isolation

and you know a lot of people think like

this they think that everything operates

in a vacuum

and I see this a classic example in

marketing is people who just focus on

the landing page conversion range all

right they look at the landing page and

they see a conversion rate and they see

a cost per lead which is a cost per

email address and let's say that that

number is 15% opt-in rate and they might

think oh that's bad

so then what they do is they start and

they start making changes to that

landing page and they get it from 15% to

30% or 40% and they're like oh that's

good I improve that conversion rate

there but that's a component thinkers

view all right what a systems thinker

would do is they would look at the whole

they would look at the health of the

whole not the part and so instead of

thinking about a landing page they would

think about the entire machine and where

does that machine end what's the

ultimate measurement and within this

machine well it's getting a customer and

cost per acquisition and ROI return on

investment all right

and so when a systems thinker makes

changes to the landing page they're not

so worried about the landing page

conversion rate they're worried about

the change to the cost per acquisition

in the our way and this is how I do

things like we know I'm optimizing my

landing page I've taken it from my 18%

to 40% and I've actually hurt sales at

the end and a lot of people don't

understand that you can do this you know

you can get an improvement here and

Kittel everything here where it matters

so where it doesn't matter you can make

an improvement where it really matters

you can hurt it it is more than possible

and I see this all the time where these

things actually go opposite ways at

different stages in the machine and only

really as systems think it can can do

this another classic example is a lot of

entrepreneurs I see who just have really

shitty like customer support you know

they they think that customer support is

is not worth anything to a customer they

think that you know that part of the

business they should just farm out to

you know to some people overseas for

like you know $500 a month for them to

just do and figure it out and it's an

afterthought right because all their

money they think should be

into marketing and other things because

support doesn't influence income that's

how a that's how a component think it

would would think but a systems thinker

would would think hey if a customer bias

from us and then they have a question

and if we answer that question in poorly

or late or you know if it's not done

professionally and well if it doesn't

well with a customer then how is that

customer going to feel probably pretty

bad and then if we sell something else

which we're highly likely to do then

they're less likely to buy something

else from us in the future so actually

we're harming ourselves by offering

shitty support we're actually going to

make less money by doing that that's

what a systems think of a thing and so

that's why you know with with my team

we've got like we've got well paid well

trained full time like us based like

people doing our customer support and I

obsess over it you know I try I look at

all of the numbers I look at our

happiness score which is how happy

people are and that is you know I looked

at the standards across the board and

like Google and and a lot of companies

that are really good at this they've got

their satisfaction score like ninety to

happiness right and we've been able to

get ours to about eighty seven and

that's pretty damn good and we're you

know my mission is to get it better than

Google's right and we're doing that

we're making it better every day and

that's actually had an effect on

ourselves we make more money because our

supports better because when a customer

has an amazing experience and when

they've dealt with other businesses like

ours they've had a horrible one then who

are they more likely to buy from next

time around it's a no-brainer but only

when you think like a systems thinker

and also we obsess over the response

time how fast from when someone submits

a ticket to win we reply you know right

now we're at like two hours or two and a

half hours and I want to get that down

you know my missions to get there to

like six minutes right because I want it

not to just be good enough I want it to

be exceptional to the point they're our

support becomes a marketing and sales

tool in and of itself their systems

thinking everything can be used to do

anything because at all interconnects

all right now I want to show you how a

system basically works first and

foremost because it's pretty simple and

everything in the world works like this

so you've got inputs over here and input

so what you put into a system and then

you've got processes in the middle of

the triangle and the processes alike you

know what happens with those inputs it's

it's like you know it's how you're

manipulating and combining and changing

those inputs to produce something and

then you've got on the other side the

outputs and that's all really a system

has inputs processes and outputs but

then there's something that influences a

system and that's the environment

there's the Sun up here because like I

said nothing works in a vacuum you know

like when you're building out when

you're doing anything like it's not like

it's not it's not like it's not affected

by something else

everything is always running in a vacuum

and a classic example of this is like

you know your imagine you as a human and

you've got your you know your you've got

a your system a human is basically a

system right you got all of these

different components within you and then

you've got all of the interconnections

between all of them now if you want an

output out of yourself which is good

like if you want to be happy and if you

want to perform well and do good work

and be focused and all of that then if

that's the output that you want then the

inputs matter you know if you if you

don't sleep properly then your output

isn't going to be very good because

sleepers are really important input if

your food isn't good then your output

isn't going to be very good and just to

show you how input sexually affect

outputs just try having like 20 beers as

an input right just try to drink 20 of

those and then see how see how sharp you

are all right you you won't be so that's

just right there that shows you that

what goes in affects what comes out

there's the saying you know with systems

garbage in garbage out you know what

what we put in is often what we get out

and then we've got the environment which

affects us too and humans are really

influenced by our environment you know

one of the largest influences of our

happiness and things is the weather and

you know if it's sunny

we're statistically more likely to be

happy just if it's sunny and if you

don't believe me on this one then look

at the most depressed countries in the

world and it'll be those ones over like

Greenland Iceland where they don't have

any daylight for basically all that like

most of the year right and then if you

look at the some of the happiest places

then you'll notice that it's it's places

with really good with it all right

and there's even a trader called like

Paul Tudor Jones who who even has

developed a stock trading algorithm that

basically looks at with the patterns and

humans reactions - with the patterns and

at trade stocks based on that because

peat humans are more likely to feel good

and make optimistic bits winners sunny

you know we think we're logical but

we're affected by the Sun that changed

the sale decisions alright and so we've

got inputs outputs processes we've got

our environment and then we have

feedback and what feedback is is you

know outputs actually affect inputs all

right so all of this stuff is

interconnected and a classic example of

this is you know if you have just think

about a crowd forming right so if you're

if there's like a some sort of dance

party or music event or something like

that and let's say that no one is

dancing in it's just an empty field then

one person goes in and starts dancing

that one person is going to be by

himself for a while but then is another

person comes in then people slowly start

coming in faster and faster because the

crowds now forming and then

as soon as a lot of people start running

in a lot more people start running and

then a lot more people start running in

and it grows exponentially and this is a

classic example about how outputs come

back and provide feedback to inputs

alright and this happens the same way on

the way back down you know if a lot of

people start leaving like a dance dance

circle or whatever the hell you call

those things then a lot more people

start leaving right and it it decreases

just as fast as it is it increases and

that's basically how it works now you

know one thing this this operates

everywhere this is what we call a

feedback loop when you know when the

output of something directly affects the

input of something and a classic example

of this is you know the stock market in

stocks so the biggest influence on a

price of a stock is the price of a stock

so if a stock price is going up quite

fast then that's going to influence more

people to think oh this is good and in

the people who put their money and

they're gonna be like oh this this

wasn't the right decision so they might

put more in and tell more people and

then you get you get your bubble you get

your Bitcoin you know sort of event

because of the feedback and so that's

basically how systems work and so you

don't have to be like an Einstein or a

NASA space scientist to really become a

systems thinker

all you do is you just think about

inputs outputs processes feedback

environment so you want to think in your

you know it yourself like if you want

what outputs do you want out of yourself

you want to do really good work do want

to be healthy and fit well then you need

to have good inputs you need to be good

you need to eat good food you need to

sleep and more than the physical things

you need to put good you know good

information into your brain you know if

you if you don't ever read anything or

watch anything or consume any form of

information it is impossible for you to

know anything all right we don't we're

not just born knowing stuff we don't

know anything when we're born other than

some survival instincts which you know

Pro

into us from you know our evolution but

the that's really it if we want to learn

something we have to have inputs so you

know smart people will often read books

that's how they learn and then they'll

often watch good sources of information

you know they won't be watching the news

and they won't be reading the newspaper

and they won't be you know watching like

Game of Thrones and binge watching

Netflix because that's that it doesn't

really teach you anything right but

instead they'll be reading books and

they will be doing experiments and

learning and that'll be the input into

their brain and then obviously the

output is knowledge right so it doesn't

matter where you look everything is this

simple if you want to be healthy eat

well sleep well drink water exercise

those are the inputs the outputs are

health right if you want to be

knowledgeable or smart it's something

read good books practice learn put those

inputs in intelligence is the output and

then if you want you know if you want to

grow a business well then you've got to

think like what are the inputs processes

and outputs right and this is basically

what I broke my business down to I

realized inputs are basically is web

traffic so people becoming aware of what

we're doing right those are the inputs

traffic number of human eyeballs coming

through on the internet that's the input

what is the process well that would be

like right now it's my automated webinar

so webinar that shows people the

presentation explains what it's all

about and sees if they're interested

what is the output well it's like a

customer someone signs up or not all

right and then what's the environment

well the environment is you know this

changing PPC prices like the chain sorry

the CPC prices so you know those move up

and down and these are also competition

you know if someone comes in and they're

doing something better then that man

he changes the environment right so this

doesn't just run an isolation in a

vacuum it is affected by a lot of other

things and so a good a good systems

thinker will first and foremost create a

basic elementary system we have got

inputs processes and outputs and they

will test it at a small scale to make

sure that it delivers the desirable

outputs what is that well it's customers

at a profit so if I spend a grand do I

make like more than one grant do I want

to make at least like two grand so if I

put a thousand in and I get a bunch of

clicks coming through and do I make more

on the output if that is true at a small

scale then it should be true at a lab

scale and then we just keep scaling it

up until we get you know to more than

one hundred and twenty thousand a day

all right it's as simple as that we

don't you know we don't do some weird

magic to just scale it up it has to be

inputs it has to be an increase in

inputs to move that thing up there is no

magic magic has only things that people

cannot understand right and this is what

it is

there's also feedback that comes from

that you know if someone comes through

our program and gets good results then

they will tell people about the results

and then more people are likely to buy

my program because it's been getting

people good results and then when they

tell more people and more people join in

that's more people who are likely to

have good results and so when they're

when they have better results they tell

more people and you see what happens

here we have a crowd forming sort of

phenomenon but the environment is also

playing a part you know we we have to

watch what's going on with the internet

and with CPC prices different channels

different competitors different

strategies right all of these things are

influencing it and that's basically you

know how I view my business and in every

different part within the business and

it's how I view myself it's how I view

everything and I've been doing it for

basically my whole life but I didn't

really know what it was and I couldn't

put a name in a word to it in its

systems thinking now you're probably

thinking

all right I kind of get this but right

now I want to make it really clear to

you just the main tools in the main

points of difference between you know a

normal person and a systems thinker so

here we've got tools alright so the

first thing is disconnection and

interconnectedness right top left and a

normal person thinks with you know

disconnection so they're thinking that

everything is different and it's not

interconnected so my customer support

team has no effect on my sales all right

and my marketing has no effect on my

customer support and my customer support

and my marketing have no effect on my

finances all right there's me pretty

messed up there's honestly how they

think that's like you know that's like

doctors who treat a specific symptom

without understanding how that's gonna

affect other systems within your body

right and then we have you know the next

one across is so good good systems

thinkers always see that everything is

interconnected there is no such thing

that isn't connected to something else

it is through multiple different

dimensions everything is connected right

and then linear versus circular so you

know normal people they think that

everything happens linearly and what I

mean by that is that like an event

happens now that affects like an event

that happens there and then that affects

an event that happens there but what

they don't understand is that there's

normal really happens otherwise how does

a crowd form exponentially how do stock

prices grow exponentially how do we get

any form of exponential behavior when

things happen in linear cause-and-effect

chains right it's impossible the only

reason why you know a crowd forms faster

and faster and faster is because the

more people that are joining influences

the more

that are joining and like I see it one

of the biggest influences of the price

of a stock is the price of a stock and

if it's going up it's more likely to

keep going up and if it's going down

it's more likely to keep going down all

right and so that happens because

there's a feedback loop and the things

happen in a circular sort of way not in

a straight line not in a linear sort of

way so that's important to understand

and then you know the the next tool is

silos versus like emergence so you know

normal people think that everything

happens like in a silo and they like to

really trap everything down and bolt

everything down and force things to

happen the way that they wanted them to

and only that way now let me give you an

idea of this it's this is a tougher one

to understand but when you really

understand it it will help you in a big

big way so emergence is basically

letting the merchants basically as

complex behavior that arises from simple

rules and so if we look at like the

formation of birds when they're flying

it looks very very complex and like a

form of art right and we probably would

be we probably think there's something

very sophisticated going on there but

really it could just be a very simple

rule that the birds have which is don't

collide all right and based on that

simple rule we get this amazing pattern

and behavior in the formation of a bird

and in the formation of a flock of birds

and the same happens in business all the

time like you don't need to control

everything you can just set some simple

rules and in their emergence happen and

a perfect example of this in my business

is we don't tell people you know what

niche to pick we we did this before back

when I didn't understand things so well

you know I used to tell people these are

the top 12 niches in the world I don't

know who I think I was to be able to

make a claim like that that I

we know that which nobody can know it's

anyone who claims that they know the top

niches in the world is they don't

understand how life in the world works

and the reason why is because I'll give

you an example of this and this is

fascinating when I was at school you

know a lot of this the social norms and

what what society had kind of tended to

believe is that trades and being a

plumber or a carpenter or builder or an

electrician you know they started to

believe that doing these things is is

not considered successful you know they

were they were like these things became

frowned upon and if you really wanted to

be successful you are you going to be a

doctor or an accountant or a lawyer

these people are good worthy people

these people are not good all right

which is kind of messed up so you know a

lot of parents would say that to the

kids and you know a lot so then what

happens right and they they probably

thought that at that time this is how

people don't understand systems thinking

at that time doctors and lawyers and

accountants probably made more money

than trades people so they were like oh

okay well then we should tell everybody

to do these things because they

obviously make more money and if they do

these things then they will be more

successful than these and so it doesn't

nothing works there's some that's simple

right so then they tell everyone to do

these things people stopped going and

and starting these sorts of trades then

what happens with time is that we end up

in a market where there's too many

lawyers and accountants and not enough

trades people and so back home in New

Zealand this is happening right now I

know this well because I've got friends

that are accountants and lawyers and I

also have friends that trades people a

my dad was a builder so he knows this

well too and right now in New Zealand

carpenters and builders and plumbers and

electricians make more money than

accountants and lawyers but not this is

this is the way it is and not just a

little bit but a lot more

so right now like if you work for the

top law firm and you've got like

first-class honours and more and all of

the stuff and then you go get a job at a

law firm right and then you're gonna

make less money than if you're just a

carpenter or a plumber or an electrician

and so the tables have turned right and

this is because people didn't know how

to think like if you skew the evolution

of something like that it's going to

change right and that's what happened

and my point with this is you know a lot

of people don't understand when they're

teaching a course and telling people

what to do if they tell people to all do

one thing then as soon as everyone is

doing that one thing then it stops

working because the only reason why it

was working in the first place was

probably because there wasn't a lot of

people doing it so now that a lot of

people are it loses its edge now it

doesn't work as well and now the whole

business blows up and the tactic and

strategy is no longer useful all right

same thing with niches if I find at a

point in time that the best thing to do

is helping dentists with Facebook ads

then that might be true right now in a

moment in time in time but if now I

teach 10,000 people to do Facebook ads

for dentists it's not the same anymore

it's the same phenomenon we saw with the

doctors lawyers accountants and in the

trades people right so as soon as I

started to learn this which was years

ago I stopped telling people what niche

to pick because I didn't know anyway and

I know that the best the best form or

the best niche to pick is something that

is unique to you individually and as

soon as I started doing this people came

up with the most amazing niche ideas

which I've never seen before in my

entire life people started doing porn

addiction consulting let hunter odors

and when he did this he was way more

successful we've got people who do

consulting on irritable bowel syndrome

we've got people who consult on like

family crisis intervention we've got

people who consult on you know losing

weight and in in all of these different

unique things that I would have never

thought of that

they've turned out to be extremely

profitable for for all of these

different people and it's because

they're unique and it's because there is

emergence happening and what happens is

when you stop siloing things you know

siloing is telling everyone that they

should all do Facebook ads for dentists

siloing is telling everyone that they

should do you know law or accounting

right emergence is letting things evolve

for themselves and creating diversity

and you know really letting things

flower and that's a huge strategy and

tactic that I've executed in my company

that's helped us get to where we are

today by removing the siloing letting

emergence happen another one is parts

and holes so like I told you it's like

the the typical business owner who

thinks customer support doesn't affect

the whole it's just something that

should be farmed out to somewhere for

cheap it doesn't every part affects the

whole alright and quite often the whole

is only as good as its worst part so

doesn't matter how good any like all

these other things are if one parts

rotten the whole is rotten alright it's

all about having you know the whole

operating the best I can and then we

have analysis and synthesis so you know

analysts that just a few one the core

component without viewing the entire

interconnectedness of all of the

components they're not very good

analysts a perfect example of that is

the person who looks at their landing

page and thinks that by improving their

landing page conversion rate that

they're improving their whole business

not true

I've seen that the opposite is true a

lot of the time so that's an example you

know I can view the whole in the

synthesis instead of just individual

component analysis and then isolation

and relationships so you know a lot of

people think that things just happen in

a vacuum but the systems thinker will

understand that everything is

interconnect

and everything has relationships with

other things for example my mood is

affected by the weather alright so if

there's sunny I'm gonna be happier

that's like a fact and then if I'm

happier I'm gonna do a bit of work right

and then if I do a bit of work then

we're gonna make more money and help

more people so if we trace that back the

weather is actually quite important

right so is my food

so as my diet so as my exercise if these

inputs are off my mood isn't very good

if my mood isn't very good I don't do

very good work if I don't do very good

work I don't help my customers if I

don't help my customers they don't make

much money so all of this is

interconnected you can start to see what

I'm saying here right so some action

steps for you to take how do you become

a systems thinker well you want to start

thinking of things like this I recommend

that you take a screenshot of this thing

actually I'll include a PDF of this

beneath this video for download so just

go to but beneath this video find this

link grab the PDF printed out put on

your wall learn to see everything as a

system and learn to see what what are

the input if you're analyzing anything

or trying to troubleshoot or diagnose

anything or fix it make it better just

ask yourself what are the inputs what's

the processes and then what are the

outputs is their feedback present if so

what is it as a positive is that

negative what's the amplification of

this feedback and in the environment

what things or forces are are

influencing this and in what sort of way

all right understand this and then it

makes everything so damn easy I mean I

guess it doesn't make things really easy

but compared to doing it without this I

mean yeah it's like putting on glasses

after being blind and then learning to

see you know if you do this it'll make

you learn to see so if you enjoyed this

video what I want you to do is just

click that like button also let me know

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checking these comments myself

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you can be your systems to think let me

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help you on your journey of becoming an

entrepreneur or if you're already one

becoming a better one so thanks for

watching this video and I look forward

to seeing you in the next one soon