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Systems Thinking: Misconceptions, Complexities, and the Path Forward

Written by

Danny Chen

As we enter 2026, it is worth noting that more and more climate stakeholders are advocating for systemic change. The benefits of systems thinking are simple: to solve multiple problems at scale, in time, with limited resources, and at a higher success rate.

What Systems Thinking Really Means

The basic systems thinking foundation starts with creating a better ecosystem map, identifying stakeholders within the system boundaries, making educated assumptions about system patterns and feedback loops (reinforcing and balancing), balancing risks and returns across various stakeholders, working on high-leverage interventions through various system layers (for example: stakeholder layer, information layer, financial layer, material layer, etc.), and adapting to new information and challenges for improvement (Enclude Project Team, 2019), (Blackman et al., 2025), (McKay et al., 2025)).

The systems thinking mindset invites stakeholders who want to solve complex problems to think more deeply about its dynamic complexity in order to achieve long-term, outsized benefits for most stakeholders within the defined system boundaries. Moving from incremental, fragmented, siloed impacts to flexible, exponential, collaborative system impacts, the mindset connects various stakeholders with different conflicts of interest and priorities to redefine the possible future together ((Lennon et al., 2020), (Williams, 2021), (Wong, 2022)).

Common Misconceptions and Resistance to Systems Thinking

Although the systems thinking mindset has potential benefits, its introduction often meets strong pushback and stakeholder skepticism. One common argument is that systems thinking is “overthinking” disguised as a theory: people use fancy words to make simple things seem complicated, slowing down the global climate movement. Several major reasons contribute to this perception:

Systems Thinking is a Huge Project without Pilot Testing: A single component with one stakeholder does not constitute a system. Driving systemic change often starts with large projects involving multiple stakeholders, which may not always collect and analyze feedback through pilot testing ((John, 2017), (Qudrat-Ullah, 2025)).

System Thinking is a Formal Design with Compulsory Mandates: People value freedom. When a solution is designed as a formal structure with strict mandates, it can be fragile because it clashes with stakeholders’ informal behaviors. Moreover, when compulsory mandates conflict with stakeholders’ interests, people are likely to resist them as much as possible.

System Thinking is a Control System with Stakeholder Compliance: We live in an open, dynamic global ecosystem where deliberate, top-down design rarely works. Greater stakeholder involvement can reduce predictability and stability, and when systemic success depends on a specific sequence of stakeholder actions in a complex environment, the likelihood of success appears very low.

Clarifying the Misunderstandings: How Systems Thinking Works in Practice

At first glance, these opinions may seem solid. However, if we look deeper, we discover that they are misunderstandings that are undercommunicated.

Project size & Pilot Testing: The definition of a large project is subjective and varies depending on stakeholders’ perspectives. Even so, using systems thinking does not imply skipping pilot testing before broader adoption. For all potential climate solutions, such as nature-based carbon removal projects, this means starting with small experiments that stakeholders can evaluate to understand potential positive outcomes ((Verra. (2024, 2025)), (Howard et al., 2018)).

Stakeholder Engagement: Stakeholder communication is key to systems thinking design. The main purpose is to ensure that people who are directly affected, those executing the project, and decision-makers are well informed about potential positive and negative, short-term and long-term changes resulting from the project intervention. Engagement brings communication upfront with stakeholders to reach common ground for a specific purpose, especially when conflicts of interest are significant and priorities differ ((The Integrity Council for the Voluntary Carbon Market, 2023), (Voluntary Carbon Markets Integrity Initiative, 2025))

Complex Ecosystem: Systems thinking design focuses on understanding the open, dynamic global ecosystem rather than controlling every variable through project intervention. Every interaction within the system, formal or informal, provides information that supports better systems thinking design. Each process is designed for a specific purpose, where the system of systems and the network of networks encourage humility in practicing solution design within a dynamic equilibrium ((Burkett & Griffith Centre for Systems Innovation, 2023), (Leadbeater & Winhall, 2021), Fum et al., 2025)).

Compulsory Mandates: To make positive systemic change, compulsory mandates are not the default approach. The goal of systems thinking is to help stakeholders understand the problem holistically so that collectively, they can achieve long-term positive systemic change. Systems thinking is not government-focused; it is stakeholder-focused, relying on voluntary participation based on system understanding and common ground for long-term success ((Hannant et al., 2022), TransCap Initiative. (2020)).

Execution Focus: For potential solutions with systems design, stakeholders focus on high-leverage interventions across various system layers. Interventions target a few key actions within the open, dynamic global ecosystem, with feedback collected for continuous improvement, rather than attempting to act on everything simultaneously. To enhance project success, additional approaches may include pilot projects for assumption testing, researching successful and failed cases for insights, and training stakeholders with experienced personnel ((Abson et al., 2017), (Genç et al., 2025)).

Real Challenges of Applying Systems Thinking in a Dynamic World

Despite the above clarifications, systems thinking design is not perfect. As the open, dynamic global ecosystem evolves, three common challenges are observed:

Time-Consuming Stakeholder Engagement: Achieving consensus through stakeholder engagement takes significant time, especially when conflicts of interest arise due to differing priorities ((Lacroix & Megdal, 2016), (Goodman et al., 2020)).

Time-specific situation with Implicit, Emotion-related Factors: The emotions of stakeholders could be properly addressed through upfront communication. Nevertheless, during project execution, it is hard to identify and prepare for the implicit, emotion-related factors in specific planned situations ((Connor et al., 2022), (Mukhiyayeva, Yesseikyzy, & Kabikenov, 2025)).

Time Variation with Dynamic System Changes: The dynamic equilibrium in an open system requires constant monitoring with feedback collection to understand the structural differences across the timeline ((Takashina, 2024), (Maxwell et al., 2017), (Krakovská, Kuehn, & Longo, 2024)).

Mapping a system clearly is difficult. Aligning different stakeholders is difficult. Adapting to constantly shifting landscapes is much harder, even before any action is taken. As a result, simple, one-dimensional solutions are often pursued and repeated, despite clear evidence of their ineffectiveness in solving the problem fundamentally.

Embracing Complexity for Long-Term Climate Solutions

Our human body is made of various complex systems, such as the nervous system, the visual system, the auditory system, the cardiovascular system, the respiratory system, and many more. Each of the different systems interacts with others, and it sets up the foundation for us to engage in the daily activities. Yet, we seldom hear complaints that medicine “overthinks” and should focus only on practical care.

When the topic is complex, and people lack the knowledge to understand it, it does not mean that the topic is of zero value. In fact, it simply indicates that people do not have the proper knowledge to make an appropriate judgment. Oversimplifying the problem may lead to a bigger shortfall and longer pains when today’s solution becomes tomorrow’s problem.

Systems thinking is the process of understanding the complex topic through a holistic structural review. People question definitive answers, accept the provisional nature of truths, and embrace the clash of narratives so that we are able to deeply understand the underlying assumptions, limitations, conflicts, power dynamics, and their history. Without truly understanding the system dynamics, we are simply replicating the power from the previous generation rather than solving the problem that they were not able to solve.

The Path Ahead

Most systems exist and operate as they do, with or without human intervention. When we introduce systems thinking, however, our inherent limitations mean that judgments of “good” or “bad” are often shaped by human purposes and benefits.

Systems thinking is an inclusive approach — designed by humans, for humans — to address specific problems within dynamically complex contexts. Yet, no matter how good the guidance, it cannot transform bad intentions into good outcomes.

The goal of our future cannot be limited to earning more or cutting costs. Instead, it lies in achieving harmony: where our global monetary systems meaningfully reflect environmental realities and sustain the needs of society over the long term.

This includes embracing lifelong learning with curiosity, preparing the required actions in advance, allocating resources intentionally, aligning behaviors consistently, comparing multiple potential alternatives, mitigating various risks, tracking current progress, and fostering stakeholder communication. All of this stems from understanding the system through systems thinking.

Despite its challenges, the systems thinking mindset guides stakeholders toward long-term benefits. It gives reason to believe, act, and persist. Siloed solutions without system thinking are the noise before the system dysfunction. For global stakeholders aiming to solve multiple problems at scale, in time, with limited resources, and at a higher success rate, this is the path forward.

📔

Systems Thinking: Misconceptions, Complexities, and the Path Forward

Written by

Danny Chen

As we enter 2026, it is worth noting that more and more climate stakeholders are advocating for systemic change. The benefits of systems thinking are simple: to solve multiple problems at scale, in time, with limited resources, and at a higher success rate.

What Systems Thinking Really Means

The basic systems thinking foundation starts with creating a better ecosystem map, identifying stakeholders within the system boundaries, making educated assumptions about system patterns and feedback loops (reinforcing and balancing), balancing risks and returns across various stakeholders, working on high-leverage interventions through various system layers (for example: stakeholder layer, information layer, financial layer, material layer, etc.), and adapting to new information and challenges for improvement (Enclude Project Team, 2019), (Blackman et al., 2025), (McKay et al., 2025)).

The systems thinking mindset invites stakeholders who want to solve complex problems to think more deeply about its dynamic complexity in order to achieve long-term, outsized benefits for most stakeholders within the defined system boundaries. Moving from incremental, fragmented, siloed impacts to flexible, exponential, collaborative system impacts, the mindset connects various stakeholders with different conflicts of interest and priorities to redefine the possible future together ((Lennon et al., 2020), (Williams, 2021), (Wong, 2022)).

Common Misconceptions and Resistance to Systems Thinking

Although the systems thinking mindset has potential benefits, its introduction often meets strong pushback and stakeholder skepticism. One common argument is that systems thinking is “overthinking” disguised as a theory: people use fancy words to make simple things seem complicated, slowing down the global climate movement. Several major reasons contribute to this perception:

Systems Thinking is a Huge Project without Pilot Testing: A single component with one stakeholder does not constitute a system. Driving systemic change often starts with large projects involving multiple stakeholders, which may not always collect and analyze feedback through pilot testing ((John, 2017), (Qudrat-Ullah, 2025)).

System Thinking is a Formal Design with Compulsory Mandates: People value freedom. When a solution is designed as a formal structure with strict mandates, it can be fragile because it clashes with stakeholders’ informal behaviors. Moreover, when compulsory mandates conflict with stakeholders’ interests, people are likely to resist them as much as possible.

System Thinking is a Control System with Stakeholder Compliance: We live in an open, dynamic global ecosystem where deliberate, top-down design rarely works. Greater stakeholder involvement can reduce predictability and stability, and when systemic success depends on a specific sequence of stakeholder actions in a complex environment, the likelihood of success appears very low.

Clarifying the Misunderstandings: How Systems Thinking Works in Practice

At first glance, these opinions may seem solid. However, if we look deeper, we discover that they are misunderstandings that are undercommunicated.

Project size & Pilot Testing: The definition of a large project is subjective and varies depending on stakeholders’ perspectives. Even so, using systems thinking does not imply skipping pilot testing before broader adoption. For all potential climate solutions, such as nature-based carbon removal projects, this means starting with small experiments that stakeholders can evaluate to understand potential positive outcomes ((Verra. (2024, 2025)), (Howard et al., 2018)).

Stakeholder Engagement: Stakeholder communication is key to systems thinking design. The main purpose is to ensure that people who are directly affected, those executing the project, and decision-makers are well informed about potential positive and negative, short-term and long-term changes resulting from the project intervention. Engagement brings communication upfront with stakeholders to reach common ground for a specific purpose, especially when conflicts of interest are significant and priorities differ ((The Integrity Council for the Voluntary Carbon Market, 2023), (Voluntary Carbon Markets Integrity Initiative, 2025))

Complex Ecosystem: Systems thinking design focuses on understanding the open, dynamic global ecosystem rather than controlling every variable through project intervention. Every interaction within the system, formal or informal, provides information that supports better systems thinking design. Each process is designed for a specific purpose, where the system of systems and the network of networks encourage humility in practicing solution design within a dynamic equilibrium ((Burkett & Griffith Centre for Systems Innovation, 2023), (Leadbeater & Winhall, 2021), Fum et al., 2025)).

Compulsory Mandates: To make positive systemic change, compulsory mandates are not the default approach. The goal of systems thinking is to help stakeholders understand the problem holistically so that collectively, they can achieve long-term positive systemic change. Systems thinking is not government-focused; it is stakeholder-focused, relying on voluntary participation based on system understanding and common ground for long-term success ((Hannant et al., 2022), TransCap Initiative. (2020)).

Execution Focus: For potential solutions with systems design, stakeholders focus on high-leverage interventions across various system layers. Interventions target a few key actions within the open, dynamic global ecosystem, with feedback collected for continuous improvement, rather than attempting to act on everything simultaneously. To enhance project success, additional approaches may include pilot projects for assumption testing, researching successful and failed cases for insights, and training stakeholders with experienced personnel ((Abson et al., 2017), (Genç et al., 2025)).

Real Challenges of Applying Systems Thinking in a Dynamic World

Despite the above clarifications, systems thinking design is not perfect. As the open, dynamic global ecosystem evolves, three common challenges are observed:

Time-Consuming Stakeholder Engagement: Achieving consensus through stakeholder engagement takes significant time, especially when conflicts of interest arise due to differing priorities ((Lacroix & Megdal, 2016), (Goodman et al., 2020)).

Time-specific situation with Implicit, Emotion-related Factors: The emotions of stakeholders could be properly addressed through upfront communication. Nevertheless, during project execution, it is hard to identify and prepare for the implicit, emotion-related factors in specific planned situations ((Connor et al., 2022), (Mukhiyayeva, Yesseikyzy, & Kabikenov, 2025)).

Time Variation with Dynamic System Changes: The dynamic equilibrium in an open system requires constant monitoring with feedback collection to understand the structural differences across the timeline ((Takashina, 2024), (Maxwell et al., 2017), (Krakovská, Kuehn, & Longo, 2024)).

Mapping a system clearly is difficult. Aligning different stakeholders is difficult. Adapting to constantly shifting landscapes is much harder, even before any action is taken. As a result, simple, one-dimensional solutions are often pursued and repeated, despite clear evidence of their ineffectiveness in solving the problem fundamentally.

Embracing Complexity for Long-Term Climate Solutions

Our human body is made of various complex systems, such as the nervous system, the visual system, the auditory system, the cardiovascular system, the respiratory system, and many more. Each of the different systems interacts with others, and it sets up the foundation for us to engage in the daily activities. Yet, we seldom hear complaints that medicine “overthinks” and should focus only on practical care.

When the topic is complex, and people lack the knowledge to understand it, it does not mean that the topic is of zero value. In fact, it simply indicates that people do not have the proper knowledge to make an appropriate judgment. Oversimplifying the problem may lead to a bigger shortfall and longer pains when today’s solution becomes tomorrow’s problem.

Systems thinking is the process of understanding the complex topic through a holistic structural review. People question definitive answers, accept the provisional nature of truths, and embrace the clash of narratives so that we are able to deeply understand the underlying assumptions, limitations, conflicts, power dynamics, and their history. Without truly understanding the system dynamics, we are simply replicating the power from the previous generation rather than solving the problem that they were not able to solve.

The Path Ahead

Most systems exist and operate as they do, with or without human intervention. When we introduce systems thinking, however, our inherent limitations mean that judgments of “good” or “bad” are often shaped by human purposes and benefits.

Systems thinking is an inclusive approach — designed by humans, for humans — to address specific problems within dynamically complex contexts. Yet, no matter how good the guidance, it cannot transform bad intentions into good outcomes.

The goal of our future cannot be limited to earning more or cutting costs. Instead, it lies in achieving harmony: where our global monetary systems meaningfully reflect environmental realities and sustain the needs of society over the long term.

This includes embracing lifelong learning with curiosity, preparing the required actions in advance, allocating resources intentionally, aligning behaviors consistently, comparing multiple potential alternatives, mitigating various risks, tracking current progress, and fostering stakeholder communication. All of this stems from understanding the system through systems thinking.

Despite its challenges, the systems thinking mindset guides stakeholders toward long-term benefits. It gives reason to believe, act, and persist. Siloed solutions without system thinking are the noise before the system dysfunction. For global stakeholders aiming to solve multiple problems at scale, in time, with limited resources, and at a higher success rate, this is the path forward.