Thursday
25Jun

Why Systems Surprise Us

We model reality. No matter how well we think we understand a thing or a system that understanding is based on a mental construct, a model.

Systems surprise us where the model and reality don't match.

At the Edges of Importance

Any analysis of a problem or system diagram has a boundary, a place where you decide that those other thngs out there that could be included aren't sufficiently important.

Doing this at some point is necessary and it's often helpful to bring them in closer than you could, such as when you describe walking as moving your legs instead of including all the electrochemical signals and tensing/relaxing of muscles. Yet it is on that level of complexity that you ignored that something happening in the rest of your body, like a heart attack, could affect the process you're trying to describe.

It's a great art to remember that the boundaries are of our own making, and they can and should be reconsidered for each new discussion, problem, or purpose. -Donella Meadows

When the Unknown is Invisible

Most people make rational decisions based on the partial information that they have, no matter how self-defeating those choices seem to those of us outside. In simulation after simulation, when someone is placed into that same situation with limited informaton, they make the same choices as others did before them, not able to take into account the information that they can't see.

If We Expect Simple Addition

Our brains tend to build models from series of events and expect that when you put in more, you get more. We make nice neat lines in our minds.

But in natural systems the true behavior is usually described by a collection of patterns over time and you reach a point where adding more to something does nothing, and then actually causes problems.

Surprises are Inevitable

Thinking about systems can be uncomfortable because we are acknowledging that we can never bring ourselves to perfect understanding. We can make surprises take familiar forms, but not avoid them completely.

The full descriptions by Donella Meadows go into greater detail of what to look for and add a few more common ways that we find our mental models don't mesh with reality, allowing systems to surprise us. This post is the sixth in a series that discusses the concepts in her book Thinking in Systems. Also read my other posts:

  1. Book Review: Thinking in Systems
  2. What is a System?
  3. Feedback Entangles How Fast with How Much
  4. Delays and Disasters at the Zoo
  5. Effective Systems Beyond Our Control
  6. Why Systems Surprise Us
  7. at least four more to come....
Tuesday
23Jun

Is Strategic Management Enough?

A few months ago I was reading discussions about how if financial leaders had been approaching their problems from a systems thinking perspective then they might have done things differently so as to lessen or completely avoid the crisis in October 2008. I've seen similar articles from time to time and managers with MBAs seemed to be a high target.

Improving judgment using systems thinking makes sense to me, so I didn't think much more of it. Until I started my Strategic Management class, the capstone class of my MBA program, and found out it was all about looking at business in different ways and taking action. There were models to evaluate the industry a business was in, the general environment around it, and its own internal strengths and weaknesses.

This type of analysis is made to look at the bigger picture, so why would it be considered not enough?

As class progressed I came up with some potential pitfalls, all of which were also influenced by business reading I'd done elsewhere and absorbed information from.

In our cases we usually only touched on one layer in our analyis. We only looked at the most immediate responses, not those that would occur because of feedback loops and delays and someone else's responses to our actions. I would imagine that the best businesses would look further when it was their livlihood at stake and not a grade, but perhaps not all of them do, for sake of time or considering it enough, so might miss things.

Also there could be the time factor. It can be difficult to carve out the time for long-term thinking, difficult enough that it's one of the exhortations in various time management and productivity theories, implying that most people don't.

Overall, our focus was on the profitability of the business. It was the only lens we looked through. We would include things like customer response or social good in certain cases, but it was related to branding and positioning and rarely about intrinsic goals. This would seem to be something that would be an even greater driver in the real world.

We also only looked at it from our point of view, even though we considered multiple factors. Other voices weren't considered, nor was there any discussion about collaborating with them, just responding to them.

I can see how things such as these might have a dramatic effect, yet I'm unsure.

I also wondered if in-person MBA programs had more discussion or different types of assignments that would have led me to different thoughts. I find it unlikely, otherwise there would not be those educators deliberately trying to infuse systems thinking or integrative thinking or sustainability into the curriculum. My experience was likely typical.

To be effective, this post really should have held more references to what others have written or I should have been able to tie together the different modes of thought in a more sophisticated way. I haven't mastered the principles well enough to do the kind of thinking I wanted, hence this informal style, but I still wanted to pose the question.

During the course of my MBA I learned a great deal about the different aspects of the business and on what basis decisions are likely to be made, whether for good or bad. I found a different perspective on what was and is happening within the company I work for and on the more popular business books that I have read. The commitment to the degree also influenced the extra-curricular learning I did online and otherwise. I am glad I took the time and effort and am also glad I'm done, so I have more control over my time again. Of course, I'll be using it to do other learning and experience gaining things....

Someday I hope to return to this concept again, about how we are taught to think in different formal and informal ways and the effects of that, but, in the meantime, what musings would you like to add?

Thursday
28May

Quick Update - Unplanned Hiatus

I've been a bit distracted the last few weeks and it will continue for the next couple. I don't normally subscribe to the theory of apologizing for not posting, but wanted to let you know that I'm still here. I will be continuing. I just need to finish this time-consuming final class of my MBA first.

Thursday
14May

Effective Systems Beyond Our Control

Most natural systems recover well when buffeted by winds of change, even when they come fast and from many directions. But then when we try to control the results in the short term or define a too narrow range of performance, we can defeat the very mechanisms that allow them to behave so well.

Resilience brings the system back to center.

Oscillations, or conditions swinging back and forth around a central point, are often normal, both in the short-term and the long term. A healthy system has a collection of balancing loops that operate in different ways across these different lengths of time that bring the behavior back to that central point.

If we look at the system in too short a time frame or if the swings in behavior are too extreme for our expectations, then it sure doesn't feel like it is behaving well! Then we might try to keep the recoveries from occurring, but without resilience the system would really take off in a direction we had not protected.

Self-organization allows a system to become more complex on its own.

Snowflakes grow and communities come together by following a few simple rules and relationships. But these simple rules make possible a larger, more complex system that can meet a challenge or just a slightly changed situation.

However, this can be disconcerting to us, because there's no way to tell from the initial state and the rules (which we don't always know) exactly what the end result is going to be. This is how we come up with snowflakes that all look different. If we try to say that only certain snowflakes are an acceptable shape then we keep the system from being able to reach its full potential.

A hierarchy of subsystems keeps effort from being repeated.

Most systems are layers of systems within systems, like cells in organs in our bodies. Because different functions can be assigned to different systems, like the lungs or the liver, then the overall system functions more effectively. In addition, two subsystems in different areas often don't affect each other directly.

Hierarchy is also why the more usual practice of studying things by breaking them down into their parts works. We just can't forget that the parts interact when they are in together. 

 


 

This post is the fifth in a series that discusses the concepts in Thinking in Systems by Donella Meadows. It summarized chapter 3 which is titled rather more optimistically "Why Systems Work So Well." I found the comments about short-sightedness that she embedded into her stories to be as important as the three characteristics themselves and tried to include a sense of them here. Also read my other posts:

  1. Book Review: Thinking in Systems
  2. What is a System?
  3. Feedback Entangles How Fast with How Much
  4. Delays and Disasters at the Zoo
  5. Effective Systems Beyond Our Control
  6. Why Systems Surprise Us
  7. at least four more to come....
Thursday
07May

Delays and Disasters at the Zoo

"A Brief Visit to the Systems Zoo" is the appealing title of chapter 2 in Thinking in Systems, and is intended to show that Donella Meadows will be isolating and looking at small interactions by themselves instead of in their larger ecosystems.

What follows is merely a summary, with one key point taken from each detailed example. The book goes through them step by step including visualizations of the system itself and its performance over time.

There will always be delays in response.

A thermostat is a stock with two competing balancing loops, the flow of heat from the furnace and the flow of heat to the outside. You can only make changes that affect future behavior, never current, and when you need to remember to make one change go fast enough to correct for the actions of the other.

One process can have a stronger effect than the other.

Population growth and decline is a stock with one reinforcing loop - fertility - and one balancing loop - mortality. Depending on the circumstances, one loop will be dominant and have a greater effect. This is also often true in more complex systems. Just because interactions are present does not mean that each cycle is equally important.

Lengthening or shortening delays can have a profound effect.

The changes in business inventory is a system with multiple delays.

Delay in perception - how long it takes to decide that an increase in sales means an order needs to be made.

Delay in response - how much of the shortfall you try to order at one time.

Delay in delivery - how long it takes to receive the product.

This creates an oscillation when the the inventory flip-flops between being overstocked and understocked. The human reaction to this annoyance is usually to react more quickly.

Acting faster actually makes the situation worse!

But lengthening the time it takes to decide to order and increasing how much you order at once allows you to have a more stable inventory level.

I'm still trying to wrap my head around this one...

It's because she is struggling to operate in a system in which she doesn't have, and can't have, timely information and in which physical delays prevent her actions from having an immediate affect on inventory. She doesn't know what her customers will do next. When they do something, she's not sure they'll keep on doing it. When she issues an order, she doesn't see an immediate response. This situation of information insufficiency and physical delays is very common. (emphasis mine)

The higher and faster you grow, the farther and faster you fall.

At least in a system like the oil economy, which has a renewable stock constrained by a non-renewable stock. This is also a reinforcing loop and two balancing loop, but the difference is that there's a physical limit to "how much" versus "how fast".

There is only so much oil in a field, for example, the non-renewable stock, but there is potentially a limitless and renewing supply of capital money to extract that oil. At least until the oil runs out. And, as Meadows notes, the system still works this way if you factor in technological improvements that allow you to extract more oil.

Effectiveness of renewable resources depends on the system too.

In contrast, the fishing economy is a renewable stock constrained by a renewable stock. Again, capital money is one stock, and the size of the resource, in this case the amount of fish is the other. There is also still a reinforcing loop and two balancing loops.

The system will almost always overshoot, followed by one of three results:

  • a sustainable equilibrium - we can still eat fish, just maybe not as many at once
  • oscillations around that equilibrium - prices and supply bounce around and we might go to
  • a collapse of the resource - no more fish

Just because the resource is renewable, doesn't mean we're safe. We have to avoid taking the level to the point below where it is capable of regenerating. And we have to have a balancing loop that is strong enough to slow capital growth as the resource decreases.

 


 

This post is the fourth in a series that discusses the concepts in Thinking in Systems by Donella Meadows. Read the book to see her diagrams, graphs, and capture more of the subtleties of the concepts, especially when it comes to this chapter. I think I still need to reread it a few more times to get everything I can from it. Also reach my other posts:

  1. Book Review: Thinking in Systems
  2. What is a System?
  3. Feedback Entangles How Fast with How Much
  4. Delays and Disasters at the Zoo
  5. Effective Systems Beyond Our Control
  6. Why Systems Surprise Us
  7. at least four more to come....