INFORMAL SYSTEMS THINKING ABOUT INNOVATION
- THE CASE OF SLOVENIA
Nastja Mulej
Zdenka Zenko, Matjaz Mulej, Vojko Potocan ,
Marjan Pivka, Dusko Ursic
New Moment, d.o.o.,
Bezigrad 10, SI-1000 LJUBLJANA, SLOVENIA.
E-mail: nastjamulej@hotmail.com
All five: University of Maribor, Faculty of Economics
and Business, SI-2000 MARIBOR, SLOVENIA,
P.O.Box 142. E-mail: zdenka.zenko@tech-transfer.si;
mulej@uni-mb.si; vojko.potocan@uni-mb.si,
pivka@uni-mb.si, dusko.ursic@uni-mb.si
Abstract
Slovenia belongs to the 80% of mankind, which have
had a poor chance to develop their natural creativity to
innovativeness with beneficial economic and social
consequences. In 1991 Yugoslavia dissolved, and
Slovenia came to have a new chance to choose a new,
more innovative way of her socio-economic
development and growth, about a century later than the
most advanced North-West of the planet Earth. Partial
models do not work, holistic models are hard to
implement, if people do not realize why are they
supposed to change their established habits of life.
Several opinion investigations demonstrated this
problem exist in Slovenia, too, and is a serious obstacle
to catching-up underway. One need is to promote more
holistic thinking by promotion of systems theory.
Unfortunately, what came out of the General Systems
Theory, is far away from holism (on the level of a total
system), which is what Ludwig von Bertalanffy spoke
for. Humans, including systems theorists, do not find his
idea feasible. But a look at his ideas, e.g. in the light of
Mulej’s Dialectical Systems Theory and some others,
and of some organizational innovations / methods such
as Total Quality Management using ISO 9000/2000 and
EQA 2000, lets us see that there is chance to promote
informal / implicit systems thinking. Research on the
companies very successful on a long-term basis can be
understood as an insight that implicit systems thinking
can work very well.
0. The selected problem and viewpoint of
this contribution1
Slovenia used to be a part of Austria-Hungary for
centuries, and of Yugoslavia in 1918-1991, which was
established after dissolutions of Austria-Hungary and
Turkey. Yugoslavia was a latecomer to industrialization
and tried to catch up with the advanced Northwestern
part of the world in two quite different ways under King
(1918-1941) and under Tito and his successors (19451980-1991). Slovenia has been and is trying to do it in a
third way, after dissolution of Yugoslavia in 1991, in
order to become an innovative society able to enter
European Union on a rather equal footing2. Creation of
an innovative society is a complex process requiring
systemic, i.e. holistic thinking based on interdisciplinary
creative cooperation, to succeed. According to the
theory of diffusion of innovation, such a process needs
support from all/many tackled ones Rogers, 19953. In
CEEC, including Slovenia, making an innovative
society is a must and a novelty, which is being imposed
over the inhered culture4.
1. The need for an definition of an
innovative society
It was already in the Foreword by prof. S. Pretnar (in:
Devetak, 1980) that Slovenia was warned of the fact
1
The contribution is based on the basic reasearch program
Innovative Enterprise in Transition, which is sponsored by
Ministry of Education, Science, and Sports, Republic of
Slovenia, in 1999-2003.
2 In its diplomatic language, EU requires Slovenia to be
innovative, in order to be admitted to EU (EU, 1997). Slovenia
is too small to make a well exploitable colony, and would
require EU to support her two million inhabitants if not
innovative enough.
3 If a novelty is found imposed by its potential users, they can
find many ways to destroy it.
4 There is an empirical finding called the law of two generation
cycles, saying that it takes about 70 years for a serious novelty
to grow roots and change the old culture visibly (Mulej, 1994).
that the world wide span of extremes in National
Incomes per capita had grown from 3:1 to over 150:1
from mid 19th century until 1970. In the following only
25 years the same span grew to +400: (see: Dyck,
Mulej and coauthors, 1998, 1999). 5 From other work 
Rosenberg, Birdzell, 1986  we can learn that such
figures reflect the fact that (only!) the richest countries
of today have implemented a social management
innovation in mid 19th century: they freed
entrepreneurship and abolished the previous
centralized/hierarchical-command culture both in terms
of ideology and in terms of economics (see: Grassby,
1999), every citizen was granted the right to
experiment at his or her or their own account in lab,
production and trading. This means that the essence of
the innovation was the political and economic
democracy, enabling other innovation/s. One of the
consequences is that the 15-20% of world population,
who live in the innovative societies, control about 95%
of knowledge and investment in knowledge and keep
permanently increasing their advantage before others.
The first countries to do so were joined by a few other
countries, which deliberately have implemented their
social management innovation on an accelerated basis
and skillfully and hence are catching up the first ones
quite well, although they took off with a delay.
From the experience of these countries, one
can learn that latecomers have a chance to become parts
of the innovative society6. This need is publicly and
officially accepted in Slovenia SGRS, 2001.
A dialectical system of operational attributes
of an innovative society includes (Mulej et al., 2000,
and earlier): a modern, creative, democracy in society
and organizations; a modern market; a modern
understanding of ownership; a modern understanding of
innovation; a modern, innovative, business of most
organizations; a modern, innovative, entrepreneurship.
(See Zenko, 1999)
2. Empirical picture of attitudes about
innovation in Slovenia
For centuries, until independence in 1991, inhabitants
of Slovenia used to be more under impact of guilds 7
5
If one takes different data, not the ones about extremes as
published by the World Bank, the general conclusion does not
change. »In 1960 the rich one fifth of world population
achieved a national income per capita which was 30 (thirty)
times higher of the one of its poorest 20%; in 1998 the
difference rose to 78 (seventy-eight) times.« Quoted from: Der
Spiegel, Hamburg, in »Profile of Demonstrators«, Delo,
Ljubljana, 28 July, 2001, p. 22
6 Many main-stream authors about the social consequences of
application of the modern computer equipment tend to think
that the catching up can be done by leap-frogging on the basis
of its application. Unfortunatelly, reality is far from such
simplicity (Bucar 2001), they do not consider the given culture
enough (see: Rogers, 1995).
7 In Tito's Yugoslavia, Chambers of Economy played the role
of guilds: a new to-be-competitor needed permission to enter
the market from the existing producers. This resulted in very
few new enterprises except the small handicraft.
than the modern (buyers') market. The guilds
economy needs no innovation, but the buyers' market
economy lives on it. On the general legal and political
level this came to be understood and passively
supported,
in
Slovenia,
but
what
about
implementation by people, what about their subjective
starting points (values, knowledge, (use of) talents,
emotions) with which they perceive and understand
and support, or refuse, the objective needs and
possibilities in their environment?
Our investigations Mulej, ed., 1997; Pivka
and Ursic, 1998, 1999 let us see that in the decade
since Slovenia has independently employed and
developed its own innovativeness, entrepreneurship
and democracy (as three interdependents subsystems
of the same whole), capacity and readiness to
interlink innovating, quality and creditworthiness of
enterprises, or to interlink innovating, business quality
and human resources development into an innovative
business, an up-to-date attitude about innovating has
been emerging very slowly only. In 1999 and 2000 we
did a comparative empirical investigation putting
similar questions in a different way. We took in
account the international finding that in the most
entrepreneurial environments innovating tends to
show up as a very natural component of culture and
business, basis of quality and hence of
competitiveness, thus also a basis for good salaries
(and purchasing capacity) and investment, hence the
capacity to survive in business and evolve in a
modern society and economy. In the case of Slovenia,
as we already have mentioned, it matters also that EU
requires Slovenia to be innovative in order to let her
enter EU. This requirements of the market and of the
EU do not allow for a slow modernisation of
Slovenians' attitude about innovation.
On the other hand, an opinion research Tos,
1999 demonstrated that 80% of Slovenian population
prefere a slow evolution8. In other words, they hardly
support innovation. In spring 1999 another
investigation showed that Slovenian people do not
value entrepreneurs Mocnik, 1999. We tested these
findings with our own investigation on a smaller
sample. They were demonstrated true, unfortunately.
Our opinion research covered in 1999 a
sample of employed freshmen parttime students of the
Faculty of Economics and Business, University of
Maribor, coming from all areas of Slovenia 9. In a
repeated investigation, in 2000, students from two
most advanced and most exporting areas were
involved, questionnaire being the same. Our intention
was to judge comparatively to what degree can a
8
An international oral discussion revealed the issue, wether or
not the remaining 20% can suffice. This issue remains unclear.
Anyway, our own experience shows that change agents can
more easily fail than succeed if they do not receive support
from their potential recepients, who can usually find a way
around imposed novelties. (see also: Rogers, 1995) On the
other hand, the 80% are a big share of voters to whom political
parties adapt themselves in order to be elected.
9 Classes to parttime students of EPF are taught at about ten
locations around Slovenia.
regional (and general) development of an innovative
orientation be implemented, if one considers
entrepreneurship, modern market, and creation of
inventions, potential innovations and innovations to
belong to central components of the system of values,
ethics, norms, and culture of the up-to-date way of
economy and life. These attributes are the least
developed in the least modernized regions, worldwide Rogers, 1995.
We Mulej M., Mulej, N., 2000 found the
following (by questions put in the questionaire):
1. The notion that market is a socioeconomic order
providing the best life to innovators – is rare (5%
in general, 16% in the two most internationalised
regions of Slovenia = MIR).
2. The most visible sign that Slovenia is in her
transition in a market economy – is rarely seen in
an essential growth of the role and influence of
inventors and innovators (13% in general, 16% in
MIR).
3. Rare is also the opinion that it is a sign of
Slovenia's transition in a market economy that in
Yugoslavia, Slovenia used to have quite a few
inventors and innovators, but now the
government supports the efforts aimed at living
on innovation more and more persistently and
effectively with its measures concerning
education and economy (15% both in general and
in MIR).
4. The biggest impact over the opinion of the
respondents concerning the importance of
innovation in a market economy is ascribed to
TV, newspapers, radio (38% in general, 34% in
MIR), less to coworkers and bosses (24% : 21%),
the least to state bodies (7% : 24% - the biggest
difference between regions!). But only a few hear
no encouragement from anyone (20% : 18%).
5. The modern attitude that private ownership
means owners' responsibility for a high quality of
business etc., prevails10 (53% in general, 70% in
MIR).
6. What also prevails is a modern attitude that
entrepreneurship means capacity, will and action
of people to combine, discover and employ
opportunities to create something new and a new
benefit11 (72% in general, 73% in MIR).
7. What is also well represented, but less, is the
opinion that the organization in which
respondents are employed, works well, i.e.
visibly and permanently takes care of
modernization and up-dating of creativity,
knowledge, values and chances to use them in a
way that most coworkers can, may, want and
nearly must innovate permanently (40% in
general, 50% in MIR).
8. The question »Which attributes prevail in the
practice of the organization you know?« was the
first of two doublechecking questions. It includes
10
But it is not the owners, but young employees who respond
to the questionnaire!
11 Again the same caveat!
9.




12
19 comparative descriptions of an entrepreneurial
and an administrative practice. Responses show
that the entrepreneurial practice prevails over the
administrative one, but – not so concerning the
organizational innovations, managerial support to
novelties, inventive approach to problems,
democratic spirit, and tolerance by managers etc.
It is better in MIR than in general.
The question »Attributes of politics and strategies
of the organization you know« including eight
subquestions, is complementary to the foregoing
one. From this viewpoint the difference between
the general situation and MIR is significant: the
valuation of the longterm policies and strategy is
much higher, but not reaching beyond 67%. The
lowest are the judgements about the human
resources politics (coworkers are the main source
of success, longterm HR development) and
politics concerning dealing with the problems
(everyone shall discover them, search for causes,
rather than for the guilty ones).12
The interpretation of data collected includes:
There are important differences between regions
that have been open to the buyers market and
other international impacts for the longest time
and with most development, on one hand, and the
other regions on the other hand. This is true
inside Slovenia and in the entire Central and
Eastern Europe (CEEC)13,14.
In Slovenia – in the general population (rather
than among the entrepreneurs and managers
whom we have not covered by intention) the
opinion does not prevail that one can speak of
market and market economy when there are not
only supply, demand, and price, but only when
there is power of the innovative ones and serious
difficulties of the non-innovative organizations,
individuals, regions, countries, international
areas. Thus, the support to innovation-tending
opinion leaders may be too small for the change
of culture to take place with a sufficient speed.
Therefore, Slovenia may not be able to enter
European Union and the global economy in
general on an equal footing in time to avoid the
danger of being (neo)colonized.15
Government does not do enough to make people
perceive that the top leadership of Slovenia
seriously aims at making Slovenia an innovative
society, not merely a member of EU and NATO.
Not even the phases of awareness / knowledge
and persuasion phases have been reached, and of
course less so have been the phases of decision
and implementation, from the innovation-
This part devalues the first part of the response a lot.
We do not want to speak of entire nations, differences inside
countries and nations matter a lot, too.
14 For historic reasons, other areas of CEEC may be even less
pro-innovative than Slovenia.
15 It is interesting to see that much more knowledge is offered
from the West concerning private ownership and management
and technical expertise than entrepreneurship and innovation
management.
13
decision process as discussed in the theory of
diffusion of novelties16.
 In many organizations they still think that
ownership and entrepreneurship are one thing,
and innovating is a totally separated story, so is
excellent quality of business. They also consider
innovating to be rather an engineering issues than
a human resources one. This means, they still
consider it a hobby of very specific individuals
rather than an integrating and must process.
 The especially underestimated issue are the
organizational and managerial innovations, with
which the top powerholders would give up a part
of their power (in order to carry less burden) by
freeing and developing creativity of their
subordinates and by directing it to creation of
benefit for the organization.
 Making the modern values seeing innovating,
modern perception of market, democracy and
entrepreneurship as the basis of modern business,
economy and life of a high quality level, is
therefore a lot too slow.
Very similar findings were demonstrated again in
a number of conferences PODIM 2000; PODIM
2001; DEZAP 2001; ZRS 2001; Stanic 2001; etc .
What does this mean in terms of (informal)
systems (= holistic) thinking as a precondition for an
invention to develop to an innovation?
3. The “general systems Theory”, another
Systems Theory and/or informal Systems
Thinking – What does use?
Since his first renown research, as a biologist and
mathematical biologist, from 1928 on, Ludwig von
Bertalanffy (LvB) has gradually become the founding
father of the General Systems Theory (GST). This
notion is called a theory, which might recall us of
time-free findings about time-bound features, events,
processes, and attributes. This is what science
produces and presents under the name of a theory. In
the case of LvB, as quoted by Elohim Elohim, 1999;
Elohim, 2000 after Davidson Davidson, 1983 and
other references and sources, GST is not called a
theory rightly. What LvB required, was GST to
become a teaching (»Lehre«) with the role of a new
worldview, which would ask all of us:
 to feel and act as a citizen of the entire world, not
single nations only;
 to consider the entire biosphere as one system /
whole;
 to see the planet Earth as one organisation, which
means a whole with attributes emerging from
interdependencies,
sometimes
mutually
reinforcing, sometimes mutually opposing,
between its parts on the basis of their interactions.
16
Transition from a routinized to an innovative society is a
radical innovation process, which needs a lot of conscious
diffusion to really take place and to do so in time, which is the
case with the catching-up latecomer countries / regions.
This notion by LvB practically means a warning:
limitations of our thinking and resulting acting cause
too many oversights for the biosphere, including the
mankind, to have a good chance to survive rather than
to disappear, sooner or later. Obviously, ideas and
findings by LvB have not received sufficient attention
and consideration, over the five decades since he
established (with a few other broad-minded scientists)
the General Systems Theory and a society to deal with
it.
Thus, Bertalanffy (rightly) required what we
might call a total-system approach. To most
humans, this is more than they find requisite (i.e. both
necessary, sufficient and possible17) in their own work
and life framework. The idea of the GST as a very
broad worldview has, gradually, come to be a formal
methodology which transfers some important insights
from one specialised discipline to another and lets
them benefit from transfers rather than from
interdisciplinary cooperation (see: EMCSR etc., incl.
EMCSR, 2000). A lot of benefit results, but the
concept remains far away from Bertalanffy:
 Systems thinking, as the practice of holistic
thinking, comes to be partially holistic.18
 Systems theory, as its theoretical reflection and
background, comes to be supportive of such
partial holisms, as GST, in practice.19
 Reductionism, which has been a very useful
scientific approach over several centuries, comes
to be fortified rather than partly replaced and
partly complemented with a more holistic,
interdisciplinary and transdisciplinary approach.20
 The resulting innovations are partial, too, and
cause many bad side-effects, such as an urgent
need for a “sustainable development” rather than
a “nature-robbing, one-sided one”.21
17
About the Law of Requisite Holism see: Mulej, Kajzer,
1998; Rebernik, Mulej, 2000.
18 As long as only partial problems are tackled, this is good
enough. But it may lead to suboptimization, which may work
against a holistic optimization. A business case: seeing finance
without marketing, production and human resources, or vice
versa, etc.
19 In both oral contacts and texts by a number of authors we
read from around the world, we very rarely come across the
notions of interdependence and interdisciplinarity. Several
authors tend to talk about transdisciplinarity in a way meaning
that the general attributes from different disciplines are
searched for isomorphysms, rather then cooperation of
mutually different disciplines and hence viewpoints.
20 Every specialization in both practice and science is
(unavoidably and also usefully, to some extent) limited to
reducing the total amount of the really existing attributes to the
ones, which are exposed by its selected viewpoint.
21 Solving a rather narrowly defined problem brings often a
new solution, but this solution can rarely cause the foreseen
consequences only. Some interdependencies and resulting /
emerging synergies may very frequently be overseen. E.g.
environmentalists tend to claim the end of production of cars
because this would obviously help the nature recover and
become more sustainable. But they do not seem to think of
jobs and their replacement. Etc.

The traditional human selfishness needs to
include more interdependence into criteria of a
good work and life, in order to be able to survive
Mulej, Kajzer, Potocan, Knez-Riedl, 2000.22
As a result of such practical shortcomings of a –
basically – nice theory, beside / on the basis of GST,
other methodologies of holism surfaced inside
systems movement Jackson, 1991 and outside it,
such as the chaos and complexity theories Mulej et
al., 2000.
4. Some conclusions
The need for holism (by systems thinking) is stated.
But, if we humans are stating a need, this means that
practice, sometimes also theory / science, is lacking
responses to this need, and our humankind’s
capability demonstrates holes rather than wholes. So
is it obviously also in the case of the modern business:
the principle and requirement are clear, the
methodology lacks a lot.
Collins and Porras (Collins, Porras, 1994
and many times later on, incl. 1997, and later)
demonstrated (indirectly) that a good business
depends a lot on systems thinking, even without using
as single word of systems theory. The research
reported about here demonstrates the same, including
the explanation why the economies of the latecomers
to the buyers’ market keep lagging behind the most
advanced ones. Systems theorists should do more
work on development of informal systems thinking.
(see: several authors at IDIMT, esp. 1998, 1999)
Mulej’s Dialectical Systems Theory Mulej et al.,
2000b and some other soft-systemic theories are
providing for a similar indication and instruction:
consideration
of
interdependencies,
synergies,
viewpoints of consideration, emergence, hierarchies,
attractors (including the strange ones), complexity,
chaos, interplays, etc. can take place in an informal /
implicit way. The new international models of
organizational innovations such as ISO 9000/2000 and
EQA, a democratic team-working project management,
Organizational Development (as a discipline and
practice concerned with non-technological innovation)
etc. may offer bridges between the unavoidable narrow
specialists and (requisitely) holistic thinking on the basis
of democratic regulation and high-quality team work
with no avoidable imposition by any one-sided powerholders.
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22
We do not dare speaking for altruism. We speak of
interdependence as the precondition for the selfish interest to
be met. E.g.: your personal experience may say that you tend
to not return to a supplier with whom you do not feel satisfied.
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