62 terms

Systems Thinking

Anything that builds up or dwindles; for example, water in a bathtub, savings in a bank
account, inventory in a warehouse. In modeling software, a stock is often used as a
generic symbol for accumulators. Also known as Stock or Level.
Balancing Process/Loop
Combined with reinforcing loops, balancing processes form the building blocks of
dynamic systems. Balancing processes seek equilibrium: They try to bring things to a
desired state and keep them there. They also limit and constrain change generated by
reinforcing processes. A balancing loop in a causal loop diagram depicts a balancing
Balancing Process with Delay
A commonly occurring structure. When a balancing process has a long delay, the usual
response is to overcorrect. Overcorrection leads to wild swings in behavior. Example:
real estate cycles.
Behavior Over Time (BOT) Graph
One of the 10 tools of systems thinking. BOT graphs capture the history or trend of one
or more variables over time. By sketching several variables on one graph, you can gain
an explicit understanding of how they interact over time. Also called Reference Mode.
Causal Loop Diagram (CLD)
One of the 10 tools of systems thinking. Causal loop
diagrams capture how variables in a system are interrelated. A CLD takes the form of a
closed loop that depicts cause-and-effect linkages.
Drifting Goals
A systems archetype. In a "Drifting Goals" scenario, a gradual downward slide in
performance goals goes unnoticed, threatening the long-term future of the system or
organization. Example: lengthening delivery delays.
A systems archetype. In the "Escalation" archetype, two parties compete for superiority
in an arena. As one party's actions put it ahead, the other party "retaliates" by
increasing its actions. The result is a continual ratcheting up of activity on both sides.
Examples: price battles, the Cold War.
The return of information about the status of a process. Example: annual performance
reviews return information to an employee about the quality of his or her work.
Fixes That Fail
A systems archetype. In a "Fixes That Fail" situation, a fix is applied to a problem and
has immediate positive results. However, the fix also has unforeseen long-term
consequences that eventually worsen the problem. Also known as "Fixes That
The amount of change something undergoes during a particular unit of time. Example:
the amount of water that flows out of a bathtub each minute, or the amount of interest
earned in a savings account each month. Also called a Rate.
Generic Structures
Structures that can be generalized across many different settings because the
underlying relationships are fundamentally the same. Systems archetypes are a class of
generic structures.
Graphical Function Diagram (GFD)
One of the 10 tools of systems thinking. GFDs show how one variable, such as delivery
delays, interacts with another, such as sales, by plotting the relationship between the
two over the entire range of relevant values. The resulting diagram is a concise
hypothesis of how the two variables interrelate. Also called Table Function.
Growth and Underinvestment
A systems archetype. In this situation, resource investments in a growing area are not
made, owing to short-term pressures. As growth begins to stall because of lack of
resources, there is less incentive for adding capacity, and growth slows even further.
Learning Laboratory
One of the 10 tools of systems thinking. A learning laboratory embeds a management
flight simulator in a learning environment. Groups of managers use a combination of
systems thinking tools to explore the dynamics of a particular system and inquire into
their own understanding of that system. Learning labs serve as a manager's practice
Leverage Point
An area where small change can yield large improvements in a system.
Limits to Success
A systems archetype. In a "Limits to Success" scenario, a company or product line
grows rapidly at first, but eventually begins to slow or even decline. The reason is that
the system has hit some limit—capacity constraints, resource limits, market saturation,
etc.—that is inhibiting further growth. Also called "Limits to Growth."
Management Flight Simulator (MFS)
One of the 10 tools of systems thinking. Similar to a pilot's flight simulator, an MFS
allows managers to test the outcome of different policies and decisions without
"crashing and burning" real companies. An MFS is based on a system dynamics
computer model that has been changed into an interactive decision-making simulator
through the use of a user interface.
Policy Structure Diagram
One of the 10 tools of systems thinking. Policy structure diagrams are used to create a
conceptual "map" of the decision-making process that is embedded in an organization.
It highlights the factors that are weighed at each decision point.
Reinforcing Process/Loop
Along with balancing loops, reinforcing loops form the building blocks of dynamic
systems. Reinforcing processes compound change in one direction with even more
change in that same direction. As such, they generate both growth and collapse. A
reinforcing loop in a causal loop diagram depicts a reinforcing process. Also known as
vicious cycles or virtuous cycles.
Shifting the Burden
A systems archetype. In a "Shifting the Burden" situation, a short-term solution is tried
that successfully solves an ongoing problem. As the solution is used over and over
again, it takes attention away from more fundamental, enduring solutions. Over time,
the ability to apply a fundamental solution may decrease, resulting in more and more
reliance on the symptomatic solution. Examples: drug and alcohol dependency.
Shifting the Burden to the Intervener
A special case of the "Shifting the Burden" systems archetype that occurs when an
intervener is brought in to help solve an ongoing problem. Over time, as the intervener
successfully handles the problem, the people within the system become less capable of
solving the problem themselves. They become even more dependent on the intervener.
Example: ongoing use of outside consultants.
Simulation Model
One of the 10 tools of systems thinking. A computer model that lets you map the
relationships that are important to a problem or an issue and then simulate the
interaction of those variables over time.
Structural Diagram
Draws out the accumulators and flows in a system, giving an overview of the major
structural elements that produce the system's behavior. Also called flow diagram or
accumulator/flow diagram.
Structure-Behavior Pair
One of the 10 tools of systems thinking. A structure-behavior pair consists of a structural
representation of a business issue, using accumulators and flows, and the
corresponding behavior over time (BOT) graph for the issue being studied.
The manner in which a system's elements are organized or interrelated. The structure of
an organization, for example, could include not only the organizational chart but also
incentive systems, information flows, and interpersonal interactions.
Success to the Successful
A systems archetype. In a "Success to the Successful" situation, two activities compete
for a common but limited resource. The activity that is initially more successful is
consistently given more resources, allowing it to succeed even more. At the same time,
the activity that is initially less successful becomes starved for resources and eventually
dies out. Example: the QWERTY layout of typewriter keyboards.
System Dynamics
A field of study that includes a methodology for constructing computer simulation
models to achieve better understanding of social and corporate systems. It draws on
organizational studies, behavioral decision theory, and engineering to provide a
theoretical and empirical base for structuring the relationships in complex systems.
A group of interacting, interrelated, or interdependent elements forming a complex
whole. Almost always defined with respect to a specific purpose within a larger system.
Example: An R&D department is a system that has a purpose in the context of the
larger organization.
Systems Archetypes
One of the 10 tools of systems thinking. Systems archetypes are the "classic stories" in
systems thinking—common patterns and structures that occur repeatedly in different
Systems Thinking
A school of thought that focuses on recognizing the interconnections between the parts
of a system and synthesizing them into a unified view of the whole.
Tragedy of the Commons
A systems archetype. In a "Tragedy of the Commons" scenario, a shared resource
becomes overburdened as each person in the system uses more and more of the
resource for individual gain. Eventually, the resource dwindles or is wiped out, resulting
in lower gains for everyone involved. Example: the Greenhouse Effect.
Fixes that Fail: Solution
Let go. Seek out mutually satisfactory ways for all goals to be realized
Tragedy Of Commons: Solution
Educate and exhort the users, so they understand the consequences of abusing the resource. And also restore or strengthen the missing feedback link, either by privatizing the resource so each user feels the direct consequences of its abuse or (since many resources cannot be privatized) by regulating the access of all users to the resource.
Drifting the Goals: Solution
Keep performance standards absolute. Even better, let standards be enhanced by the best actual performances instead of being discouraged by the worst. Use the same structure to set up a drift toward high performance.
Escalation: Solution
Avoid getting in it! Or refuse to compete. Or negotiate a new system with balancing loops.
Success to the Successful: Solution
Diversification, which allows those who are losing the competition to get out of that game and start another one; strict limitation on the fraction of the pie any one winner may win(anti-trust laws); policies that level the playing field, removing some of the advantage of the strongest players or increasing the advantage of the weakest; policies that devise rewards for success that do not bias the next round of competition.
Shifting the Burden
Avoid Getting in! Take the focus off short-term relief and put it on long-term restructuring.
Limits to Growth: Solution
Suspend your mental model and expect the limit. Also, try reducing the consequences.
Bounded Rationality
The logic that leads to decisions or actions that make sense within one part of a system but are not reasonable within a broader context or when seen as a part of the wider system.
Dynamic Equilibrium
The condition in which the state of a stock(its level or its size) is steady and unchanging, despite inflows and outflows. This is possible only when all inflows equal all outflows.
Feedback Loop
The mechanism(rule or information flow or signal) that allows a change in a stock to affect a flow into or out of that same stock. A closed chain of causal connections from a stock, through a set of decisions and actions dependent on the level of the stock, and back again through a flow to change the stock.
Systems organized in such a way as to create a larger system. Subsystems within systems.
Limiting Factor
A necessary system input that is the one limiting the activity or the system at a particular moment.
The ability of a system to recover from perturbation; the ability to restore or repair or bounce back after a change due to an outside force.
Self Organization
The ability of a system to structure itself, to create new structure, to learn, or diversify.
Shifting Dominance
The change over time of the relative strengths of competing feedback loops.
Sub optimization
The behavior resulting from a subsystem's goals dominating at the expense of the total system's goals.
Get The Beat of the System
Before you disturb the system, watch the behavior, and once you get it, join it.
Expose your Mental Model
Remember, always, that everything you know, and everything everyone knows, is only a model. Get your model out there where it can be shot at.
Honor, respect, and distribute Information
A decision maker can't respond to information he or she doesn't have, can't respond accurately to information that is inaccurate, can't respond in a timely way to information that is late.
Use language with care and enrich it with systems concepts
Make the cleanest possible use of language and expanding your language to be able to talk about complexity.
Pay attention to what is important not just what is quantifiable
Just because you can't put numbers to it, doesn't make it's not important.
Make Feedback policies for feedback systems
the best policies not only contain feedback loops, but meta-feedback loops-loops that alter, correct, and expand loops. These are policies that design learning into the management process.
Go for the good of the whole
Don't maximize parts of systems or subsystems while ignoring the whole.
Listen to the wisdom of the system
Before you charge in to make things better, pay attention to the value of what's already there.
Locate responsibility within the system
Do pay attention to the triggering events, the outside influences that bring forth one kind of behavior from the system rather than another.
Stay Humble-stay a learner
Don't bluff or freeze if you don't know, learn instead.
Celebrate Complexity
Embrace the complexity of the world and don't fit complicated thoughts into linear thinking.
Expand Time Horizons
Look ahead while still looking at the present.
Defy the discipline
Follow a system wherever it leads. Expand your thought horizon.
Expand the Boundary of Caring
Just care more about things, don't be a douche
Don't erode the goal of goodness
Live your life with integrity. DON'T DO THE SLIPPERY SLOPE. DON'T.