Ryan Michael Reavis-Thinking in Systems

Author of Book: Donella H. Meadows
Date Read:

Book Report

I got this title out of an article in Entrepreneur Magazine. It had an impact on a successful startup entrepreneur so I wanted to check it out.

Thinking in Systems in a book about Systems Theory. It is both scientific, in the way Meadows explains systems models, and philosophical in explaining our relationship with the systems around us and how they are all connected together, not in a linear structure, but in many directions all at once. All systems consist of elements, interconnections, and a function or purpose. It is easy to focus solely on the elements of a system when diagnosing a problem or looking to improve it, but focusing on the relationships that hold the elements together reveals more about system behavior than its individual parts. One of the ways elements interact in systems is through information, and there are many ways information is used. The existence of a problem is only one kind of information used to trigger a response. Information about incentives, resources, and consequences also play huge roles in the way a system behaves.

Meadows breaks down a system into stocks, flows, and feedback loops with illustrations and graphs to show the effect that small manipulations can have, often in the opposite of the intended direction. Feedback loops either balance, or reinforce the system, and can only affect future behavior. So consideration for delays is crucial, along with watching for one feedback loop dominating another in strength. Examples are given in economics, renewable and nonrenewable stocks, the ways businesses grow, and their limitations.

Some really interesting insight is given into the phenomena of people ruining their own environment. It is just a matter of not having enough information. People make rational decisions based on the information that they have, what is called Bounded Rationality. Not having enough information about distant parts of the system causes people to make changes that just lead to more problems. I see this happen all the time in the BOP. Administrators tinker with levers to make changes, but these changes never fix structural patterns. The result for these pointless actions is called a System Trap, and there are many of them. A kind of System Trap that stands out to me because I see it every day is called The Drift to Low Performance. This occurs when performance standards are allowed to be influenced by past performance. If there is a negative bias in perceiving past performance, it creates a reinforcing feedback loop that drags standards down until everyone sucks at their job and it becomes the norm. The only way out of this is to keep standards absolute, and to use the best performance, not the worst, and the measuring stick. Other system traps include rule beating, where behavior gives the appearance of following the system rules or achieving the goals or the system, but actually uses workarounds to achieve more personal goals, which distorts the system as a whole. Seeking the wrong goal entirely is another common trap. If the goals are not defined accurately or completely, the system may work to produce a result that is not intended or wanted.

There are leverage points within systems that can be used to affect change, and managers sometimes know intuitively where these points are. But interestingly, more often than not, they push the change in the wrong direction. Inflows and outflows are popular intervention points. System goals are another. Changing the size of a stock tends to make a system more stable because it creates a buffer that effect delays, which are critical determinants of system behavior. Other leverage points include feedback loops, information flows, rules, and paradigms.

The last chapter discusses the reality that systems are complex, and thinking that they can be changed and actually changing them are two different things. Social systems are a manifestation of cultural thinking, made up of human needs and emotions. Insight into a social system usually just raises more questions, which should lead us to confront some of the mysteries of humanity. It is better to think of managing systems in the terms of interaction, rather than control. Analysis should be dynamic, not static. Using language with care, making sure information is accurate and well understood has powerful effects on system behavior. It is easy to fall into the trap of only paying attention to what we can measure, but that which is quantifiable is not always what is most important in the grand scheme of things. Carrying capacity, structure, resilience, and diversity are forces that will help the system run itself and should be nurtured.

Thinking in Systems has helped me to realize that complex systems don’t act the way our minds want them to, and understanding this has changed my perspective greatly. I won’t let short-term productivity replace long-term survival. I’ll make sure to cross department lines and make it paramount that everyone works together. I’ll keep standards absolute and never weigh bad news heavier than good news. I feel like I’ve put binoculars on my perspective and I am able to see the more distant parts of the systems around me and I’m better for it. I recommend this book to anyone looking to improve their management skills.