.. system that can evolve can survive almost any change, by changing itself.

Keywords

system, feedback loop, archetypes, law of the minimum, trial and error, error, error.

Underlined

Because of feedback delays within complex systems, by the time a problem becomes apparent it may be unnecessarily difficult to solve– A stitch in time saves nine.

System thinkers call these common structures that produce characteristic behaviours “archetypes.” When I first planned this book, I called them “system traps” ..

Purposes are deducted from behavior, not from rhetoric or stated goals.

A stock is the memory of the history of changing flows in the system.

.. stock can be increased by decreasing the outflow rate as well as by increasing the inflow rate. There’s more than one way to fill a bathtub!

That means systems thinkers see the world as a collection of “feedback processes”.

Because systems often have several competing feedback loops operating simultaneously, those loops that dominate the system will determine the behavior.

..these are questions you need to ask that will help you decide how good a representation of reality is the underlying model

• Are the driving factors likely to unfold this way?
• If they did, would the system react this way?
• What is driving the driving factors?

Systems with similar feedback structures produce similar dynamic behaviors.

A delay in a balancing feedback loop makes a system likely to oscillate

Hierarchical systems evolve from the bottom up. The purpose of the upper layers of the hierarchy is to serve the purposes of the lower layers.

We have to invent boundaries for clarity and sanity; and boundaries can produce problems when we forget that we’ve artificially created them.

There are no separate systems. The world is a continuum. Where to draw a boundary around a system depends on the purpose of the discussion–the questions we want to ask.

At any given time, the input that is most important to a system is the one that is most limiting.

We are surprised over and over again at how much time things take.

The act only when a problem becomes obvious is to miss an important opportunity to solve the problem

Bounded rationality means that people make quite reasonable decisions based on the information they have. But they don’t have perfect information, especially about more distant parts of the system. Fishermen don’t know how many fish there are, much less how many fish will be caught by other fishermen that same day.

Change comes first from stepping outside the limited information that can be seen from any single place in the system and getting an overview.

The bounded rationality of each actor in a system may not lead to decisions that further the welfare of the system as a whole.

You won’t get your way with the system, but it won’t go as far in a bad direction as you think, because much of the action you were trying to correct was in response to your own action. If you calm down, those who are pulling against you will calm down too.

Allowing performance standards to be influenced by past performance, especially if there is a negative bias in perceiving past performance, sets up a reinforcing feedback loop of eroding goals that sets a system drifting toward low performance.

One way out of the escalation trap is unilateral disarmament- deliberately reducing your own system state to induce reductions in your competitor’s state. Within the logic of the system, this option is almost unthinkable. But it actually can work, if one does it with determination, and if one can survive the short-term advantage of the competitor.

.. market competition systematically eliminates market competition..

.. most powerful ways to influence the behavior of a system is through it’s purpose or goal. That’s because the goal is the direction-setter of the system, the definer of discrepancies that require action, the indicator of compliance, failure, or success toward which balancing feedback loops work.

In seeking the wrong goal, the system obediently follows the rule and produces its specified result–which is not necessarily what anyone actually wants.

You’re acting as though there is a fine line at which the rent is fair, and at any point above that point the tenant is being screwed and at any point below that you are being screwed. In fact, there is a large gray area in which both you and the tenant are getting a good, or at least a fair, deal. Stop worrying and get on with your life.

The only way to fix a system that is laid out poorly is to rebuild it, if you can.

Missing information flows is one of the most common causes of system malfunction.

.. system that can evolve can survive almost any change, by changing itself.

It doesn’t matter how the tax law of a country is writtten. There is a shared idea in the minds of the society about what a “fair” distribution of the tax load is. Whatever the laws say, by fair means or foul, by complications, cheating, exemptions or deductions, by constant sniping at the rules, actual tax payments will push right up against the accepted idea of “fairness”.

Don’t maximize parts of the systems or subsystems while ignoring the whole. Don’t, as Kenneth Boulding once said, go to great trouble to optimize something that never should be done at all.

Tools

System Traps and Opporunities

• Policy Resistance When various actors try to pull a system stock toward various goals, the result can be policy resistance. Any new policy, especially if it’s effective, just pulls the stock farther from the goals of the actors and produces additional resistance, with result that no one likes, but that everyone expends considerable effort maintaining.

The way out: Let go. Bring in all the actors and use the energy formerly expended on resistance to seek out mutually satisfactory ways for al goals to be realized–or redefinations of larger and more important goals that everyone can pull toward together.

• The Tragedy of the commons When there is a commonly shared resource, every user benefits directly from its use, but shares the costs of its abouse with everyone else. Therefore, there is very weak feedback from the condition of the resource to the decisions of the resource users. The consequence is overuse of the resource, eroding it until it becomes unavailable to anyone.

The way out: 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 users feels the direct consequences of its abuse or ( since many resources cannot be privatized) by regulating the access of all users to the resource

• Drift to low performance Allowing performance standards to be influenced by past performance, especially if there is a negative bias in perceiving past performance, sets up a reinforcing feedback loop of eroding goals that sets a system drifting toward low performance.

The way out: keep performance standards absolute. Even better, let standards be enchanced 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 When the state of one stock is determined by trying to surprass the state of another stock– and vice versa–then there is a reinforcing feedback loop carrying the system into an arms race, a wealth race, a smear campaign, escalating loudness, escalating violence. The escalation is exponantial and can lead to extremes surprisingly quickly. If nothing is done, the spiral will be stopped by somones collapse–because exponential growth cannot go on forever.

The way out: The best way out of this trap is to avoid getting in it. If caught in an escalating system, one can refuse to complete (unilaterally disarm), thereby interrupting the reinforcing loop. Or one can negotiate a new system with balancing loops to control the escalation.

• Success to the successful If the winners of a competition are systematically rewarded with the means to win again, a reinforcing feedback loop is created by which, if it is allowed to proceed uninhibited, the winners eventually take all, while the losers are eliminated.

The way out: Diversifcation, 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 pia any one winner may win (antitrust laws); policies that level the playing field, removing some 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 to the intervenor Shifting the burden, dependence, and additction arise when a solution to a systematic problem reduces (or disguises) the symptoms, but does nothing to solve the underlying problem. Whether it is a substance that dulls one’s persception or a policy that hides the underlying trouble, the drug of choise interferes with the actions that could solve the real problem. If the intervention designed to correct the problem causes the self-maintaining capacity of the original system to atrophy or erode, then a destructiive reinforcing feedback loop is set in motion. The system deteriorates; more and more of the solution is then required. The system will become more and more dependent on the intervention and less and less able to maintain ites own desired state.

The way out: Again, the best way out of this trap is to avoid getting in. Beware of symptom-relieving or signal-denying policies or practices that don’t really address the problem. Take the focus off short-term relief and out it on long term restructuring.

• Rule Beating Rules to govern a system can lead to rule beating–perverse behavior that gives the appareance of obeying the rules or archieving the goals, but that actually distorts the system.

The way out: Design, or redesign, rules to release creativity not in the direction of beating the rules, but in the direction of achieving the purpose of the rules.

• Seeking the wrong goal System behavior is particularly sensitive to the goals of feedback loops. If the goals– the indicators of satisfaction of the rules– are defined inaccurately or incompletely, the system may obediently work to produce a result that is not really intended or wanted.

The way out: Specify indicators and goals that reflect the real welfare of the system. Be especially careful not tu confuse effort with result or you will end up wit a system that is producing effort, not result.