Transcript Intro to Systems Thinking and Causal Loops

Introduction to Systems
Thinking and Causal Loops
Todd Little
LEARNING ORGANIZATIONS
THE FIVE DISCIPLINES
Personal
Mastery
Shared
Systems
Mental
Vision
Thinking
Models
Team
Learning
MECHANISTIC VIEW
• Universe is a machine
• Analytic method leads to reductionism
• Very effective when change is slow
CAUSE
EFFECT
• Management intervention for Cause-Effect
•Mitigate the Effect (Fire-Fight)
•Eliminate the Cause (Better not happen again)
•Run Away (and hide)
MECHANISTIC
EXTRAPOLATION
700
600
Revenue
500
400
300
200
100
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
SYSTEMS VIEW
• Focusing on principle of organization, particularly
interdependent relationships
• Dealing with detail complexity and dynamic
complexity
• Seeing processes of change rather than
snapshots
WHAT IS A SYSTEM?
• A collection of people and/or parts
which interact with each other to
function as a whole
SYSTEM INTEGRITY
Dividing a cow in half does not give you two smaller cows
WHY A SYSTEMS PERSPECTIVE?
Facilitates leadership by leveraged action
• integrating competing priorities
• acknowledging and handling unintended
consequences
Problems facing us are more complex due to
increase in
• information flow
• interdependencies
• rate of change
“The significant problems we face today
cannot be solved at the same level of
thinking at which they were created.”
- Albert Einstein
WHAT IS SYSTEMS THINKING?
 Examining how
WE CREATE OUR OWN PROBLEMS
 Seeing the
BIG PICTURE
 Recognizing that
STRUCTURE INFLUENCES PERFORMANCE
ASPECTS OF STRUCTURE
Fire-fighting
Crises
Events
Tasks
Anticipating
Trends
Patterns
Structure
Designing
Unwritten Rules
Reward Systems
People’s Mental Models
EVENTS, PATTERNS, AND STRUCTURE
Action
Mode
Time
Way of
Orientation Perceiving
Questions to
Ask
Events
React!
Present
Patterns
Adapt!
What's the
fastest way to
react?
What trends
seem to be
recurring?
Structure Create Future
Change!
Witness
event
Measure
or track
patterns
of events
Systems
Thinking
What
structures are
in place
causing these
patterns?
SYSTEMS THINKING TOOLS
Causal Loop Diagrams - a useful way to
represent dynamic interrelationships
• Provide a visual representation with which to
communicate that understanding
• Make explicit one's understanding of a system
structure - Capture the mental model
REINFORCING LOOP
Behavior Over Time
Structure
Employee
Performance
Perf.
Level
S
Supportive
Behavior
S
Supervisor’s
Supportive
Behavior
Unsupportive
Behavior
Time
BALANCING LOOP
Structure
Desired
Inventory
S
Behavior Over Time
Discrepancy
O
Actual Inventory
100 ++
S
Actual
Inventory
Desired Inventory
Inventory
Adjustment
100
100 - -
S
Time
SYSTEMS ARCHETYPES
• A class of tools that capture the "common
stories” in systems thinking
• Powerful tools for diagnosing problems and
identifying high leverage interventions that
creates fundamental change
SYSTEMS ARCHETYPES
• Drifting Goals
• Escalation
• Fixes that Fail / Backfire
• Growth and Underinvestment
• Limits to Success
• Shifting the Burden / Addiction
• Success to the Successful
• Tragedy of the Commons
FIXES THAT FAIL / BACKFIRE
S
Behavior Over Time
Problem
Symptom
Fix
O
Delay
S
S
Time
Unintended
Consequences
Dilbert Learns Causal Loops
THE SOFTWARE BUG FIX
S
Number of
Bugs in Software
Reward for Fixing
Software Bugs
O
S
S
Incentive to
Write Software
with Bugs
Fixes that Fail
• Breaking a “Fixes that Fail” cycle usually
requires two actions: acknowledging that the
fix is merely alleviating a symptom, and
making a commitment to solve the real
problem now.
• A two pronged attack of applying the fix and
planning out the fundamental solution will
help ensure that you don’t get caught in a
perpetual cycle of solving yesterdays
“solutions”
Drifting Goals
O
Goal
Pressure to
Lower Goal
S
Goal
S
Gap
Time
S
O
Actual
Corrective Action
S
Delay
THE BOILED FROG
• If you put a frog in boiling water, it will
hop out immediately
• If you put a frog in cold water and slowly
bring the water to boil, the frog will
unwittingly enjoy its last blissful warm
bath
THE BOILED FROG
S
Perceived Desired
Temperature
Tolerance for
Temperature
O
Temp
S
Temperature
Gap
Time
S
O
Hop Out
Drifting Goals
• Drifting performance figures are indicators
that the “Drifting Goals” archetype is at work
and that real corrective actions are not being
taken.
• Understand how goals are set
Success to the Successful
Success of B
Success of A
S
A
S
S
S
Allocation to A
Instead of B
Resources
to A
S
Time
S
Resources
to B
B
Time
Success to the Successful
• Look for reasons why the system was set up
to create just one “winner”
• Find ways to make teams collaborators rather
than competitors
Confidence in
Ability to redo
Success of reuse
S
S
Redo
Success to the Successful
NIH Syndrome
S
S
Desire to redo
vs. desire to reuse
S
S
Amount of
reuse
Reuse
Amount of
redo
Time
Time
Limits to Success
Behavior Over Time
Structure
“Burnout”
Energy
Level
S
Employee
Performance
Perf.
Level
Diminishing
Returns
S
O
S
Hours
Worked
S
Supervisor’s
Supportive
Behavior
Positive
Reinforcement
Time
Limits to Sales Success
Market Exposure
to Potential
Customers
S
Market
Size
S
S
Potential
Customers
S
O
Sales
Systems Dynamics Models
customer with non
customer contacts
non customer
contacts
SALES FRACTION
customer
prevalence
CONTACT RATE
Potential
Customers
Customers
sales
INITIAL CUSTOMERS
total market
Legal Disclaimer
• The following is fiction.
• Any resemblance to any leading oil &
gas software development company is
purely coincidental.
New Sales
1980
1985
1990
1995
2000
2005
2010
Total Customers
1980
1985
1990
1995
2000
2005
2010
Revenue
1980
1985
1990
1995
2000
2005
2010
Systems Dynamics Models
customer with non
customer contacts
non customer
contacts
SALES FRACTION
customer
prevalence
CONTACT RATE
Potential
Customers
Customers
sales
INITIAL CUSTOMERS
total market
Ex-Customers
#Customers
#Active Customers
1980
1985
1990
1995
2000
2005
2010
Total Pot Rev
Actual Revenue
#Customers
#Active Customers
1980
1985
1990
1995
2000
2005
2010
Tragedy of the Commons
Tragedy of the Commons
S
A’s Activity
Net Gains
for A
S
S
S
Total Activity
O
S
Gain per
Individual
Activity
Resource
Limit
A
S
Time
B
S
B’s Activity
S
Net Gains
for B
S
Time
Tragedy of Integration
Fixed
Budget
S
Investment
in features
S
O
Investment
in Integration
Success from
Product
Investment
S
Investment
in Integration
Success from
Product
Investment
S
Investment
in features
Time
Perceived
Success from
Integration
B
S
S
Fixed
Budget
A
S
DELAY
O
O
O
Time
Tragedy of the Commons
• Solutions for a “Tragedy of the Commons” never
lie at the individual level (The Libertarian Nightmare)
• What are the incentives for individuals to persist
in their actions?
• Can the long-term collective loss be made more
real?
• Find ways to reconcile short-term individual
rewards with long-term cumulative
consequences
Software Integration
S
Landmark
Marketing
Vision
Customer demand
for Integration
O
S
S
S
ISG Interest
in Integration
S
Level of
Integration
ISG push
of Integration
S
S
Investment in
Integration
IPG Interest
in Integration
S
Software Integration
Interest in
Integration
S
S
O
Investment
in Integration
O
Success from
Integration
S
Frustration
with Dependencies
and Legacy Integration
Success from
Features
S
O
Investment
in features
•Limits to Growth
•Success to the
Successful