Transcript Limits to Growth

Limits To Growth
Definition
• A reinforcing (amplifying) process is set in
motion to produce a desired result. It creates
a spiral of success but also creates inadvertent
secondary effects (manifested in a balancing
process), which eventually slow down the
success.
Where is it found?
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Organizations grow for a while then stop
growing
Working groups get better for a while, but
stop getting better
Individuals improve themselves for a period,
then plateau
Crash diet to lose weight but motivation
wanes.
A farmer increases yield with fertilizer, but
crop is larger than local rainfall can support.
Management Principle
• Don’t push growth, remove the factors
limiting growth.
The structure
Example 1
• A high tech company grows rapidly because of its
ability to introduce new products.
• As new products grow, revenues grow, the R&D
budget grows and the engineering and research
staff grows.
• Technical staff becomes complex and difficult to
manage.
• Management burden falls on senior engineers
who have less time for engineering.
• Longer product development time slows
introduction of new products.
Example
Pattern of Behavior
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After rapid, initial growth, there is a
slowing of growth as the balancing loop
becomes more dominant. This can lead to
morale decline and a reversing of the
reinforcing loop: less revenue, less R&D,
fewer products, less revenue …
How to achieve leverage
• Typical response is to push harder.
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If you can’t break your bad habit, become
more diligent in monitoring your own behavior.
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If your relationship is having problems, spend
more time together
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If your staff are unhappy, keep promoting
junior staff to make them happy.
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If the flow of new products is slowing down,
start more new products
How to achieve leverage
• Because these worked in the beginning, it
seems reasonable they would continue to
work.
• Unfortunately, the harder you push on the
familiar levers, the more strongly the
balancing process resists and the more futile
your efforts become.
A better way
• Leverage is in the balancing loop, not the
reinforcing loop. Change the limiting
behavior.
Leverage
• In the relationship problem, give up on the idea of a perfect
partner which is a goal that limits the continued
improvement of any relationship.
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If the staff are unhappy, change the paradigm from
promotions to acknowledging work well done, not a
person’s place in the hierarchy. Distribute challenging work
assignments equitably and not to the elite of the company.
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In the technology company – solutions include
decentralizing, bringing in professionals skilled in managing
creative engineers (which is not easy) and some by
management development for engineers who want to
manage
Nothing on this planet grows forever
• When one limit to growth is weakened,
growth can continue until the next limit is felt.
All growth eventually stops.