Introduction to Systems Thinking and Causal Loops

1
Introduction to Systems Thinking and Causal Loops

• Todd Little

2
THE FIVE DISCIPLINES
LEARNING ORGANIZATIONS
Personal Mastery
Mental Models
Shared Vision
Systems Thinking
Team Learning
3
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)

4
MECHANISTIC EXTRAPOLATION
5
SYSTEMS VIEW

• Focusing on principle of organization,
  particularly interdependent relationships
• Dealing with detail complexity and dynamic
  complexity
• Seeing processes of change rather than snapshots

6
WHAT IS A SYSTEM?

• A collection of people and/or parts which
  interact with each other to function as a whole

7
SYSTEM INTEGRITY
Dividing a cow in half does not give you two
smaller cows
8
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

9
The significant problems we face today cannot be
solved at the same level of thinking at which
they were created.
- Albert Einstein
10
WHAT IS SYSTEMS THINKING?
? Examining how WE CREATE OUR OWN PROBLEMS ?
Seeing the BIG PICTURE ? Recognizing that
STRUCTURE INFLUENCES PERFORMANCE
11
ASPECTS OF STRUCTURE
Events
Fire-fighting
Crises
Tasks
Patterns
Trends
Anticipating
Materials Flows
Emotions
Hot Buttons
Habits, Norms, Expectations, Perceptions
Structure
Designing
Work Processes
Written Rules
Values and Beliefs
Unwritten Rules
Control Mechanisms
Procedures/Policies
Reward Systems
Peoples Mental Models
12
EVENTS, PATTERNS, AND STRUCTURE
13
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

14
COMPONENTS OF A CAUSAL LOOP DIAGRAM
Variables - an element in a situation which may
act or be acted upon ? Vary up or down over time
(not an event) ? Nouns or noun phrases (not
action words) Links / Arrows - show the
relationship and the direction of influence
between variables S's and O's - show the way one
variable moves or changes in relation to
another ? S stands for "same direction ? O
stands for "opposite direction or B -
Balancing feedback loop that seeks equilibrium
or R - Reinforcing feedback loop that
amplifies change
15
REINFORCING LOOP
Structure
Employee Performance
Employee Performance
S
S
Supervisors Supportive Behavior
Supervisors Supportive Behavior
Your Software Sucks!
Your Software Really Sucks!
16
BALANCING LOOP
Structure
Desired Inventory
S
Discrepancy
O
S
Actual Inventory
Inventory Adjustment
S
17
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

18
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

19
FIXES THAT FAIL / BACKFIRE
S
Problem Symptom
Fix
O
Delay
S
S
Unintended Consequences
20
Dilbert Learns Causal Loops
21
THE SOFTWARE BUG FIX
S
Reward for Fixing Software Bugs
Number of Bugs in Software
O
S
S
Incentive to Write Software with Bugs
22
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 dont get caught in a perpetual
  cycle of solving yesterdays solutions

23
CLASSIC INTERVENTIONS FOR A FIX THAT FAILS

• Increase awareness of the unintended consequences
  (i.e. open up peoples mental models)
• Reframe and address the root problem give up the
  fix that only works the symptom
• Anticipate unintended consequences select an
  intervention that produces the least harmful or
  most manageable consequences
• When you must address symptoms, manage or
  minimize the impact of the undesirable
  consequences

24
Drifting Goals
O
Goal
Pressure to Lower Goal
S
S
Gap
S
O
Actual
Corrective Action
S
Delay
25
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

26
THE BOILED FROG
S
Warning Do not try this at home!
Perceived Desired Temperature
Tolerance for Temperature
Temp
O
S
Temperature Gap
S
O
Hop Out
27
THE BOILED FROG
The Real Story

• If you put a frog in cold water and slowly bring
  the water to boil the frog will jump out when it
  gets uncomfortable.
• If you put a frog in boiling water, it will croak
  immediately.

28
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

29
Success to the Successful
Success of B
Success of A
S
S
S
S
Allocation to AInstead of B
Resources to B
S
S
Resources to A
30
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

31
Success to the SuccessfulNIH Syndrome
Confidence in Ability to redo
Success of reuse
S
S
S
S
Desire to redo vs. desire to reuse
Amount of reuse
S
S
Amount of redo
32
Limits to Success
Structure
Burnout
S
Energy Level
Diminishing Returns
O
Hours Worked
Positive Reinforcement
S
33
Limits to Sales Success
Market Exposure to Potential Customers
S
Market Size
S
S
Potential Customers
S
Sales
O
34
Systems Dynamics Models
customer with non
non customer
customer contacts
contacts
SALES FRACTION
customer prevalence
CONTACT RATE
Potential
Customers
Customers
sales
INITIAL CUSTOMERS
total market
35
Legal Disclaimer

• The following is fiction.
• Any resemblance to any leading oil gas software
  development company is purely coincidental.

36
(No Transcript)
37
(No Transcript)
38
(No Transcript)
39
Systems Dynamics Models
customer with non
non customer
customer contacts
contacts
SALES FRACTION
customer prevalence
CONTACT RATE
Potential
Customers
Customers
sales
INITIAL CUSTOMERS
total market
Ex-Customers
40
(No Transcript)
41
(No Transcript)
42
Tragedy of the Commons
43
Tragedy of the Commons
Resource Limit
S
S
Gain per Individual Activity
S
O
Total Activity
S
S
44
Tragedy of Integration
Investment in features
Fixed Budget
S
S
O
Success from Product Investment
O
Investment in Integration
S
Perceived Success from Integration
S
DELAY
Investment in Integration
S
Success from Product Investment
O
O
S
Investment in features
Fixed Budget
S
45
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

46
Software Integration
Landmark Marketing Vision
S
Customer demand for Integration
O
S
S
S
ISG Interest in Integration
S
ISG push of Integration
IPG Interest in Integration
S
Level of Integration
Investment in Integration
S
S
47
Software Integration
Interest in Integration
S
S
O

• Limits to Growth
• Success to the Successful

Investment in Integration
O
Success from Integration
S
O
Frustration with Dependencies and Legacy
Integration
Investment in features
Success from Features
S