Systems Thinking

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Systems Thinking Causal Loop Diagramming

• Simulation and Modeling

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• Concepts of Systems Thinking

• System Definitions
• A collection of interacting elements that
  function together for some purpose.
• a group of interacting parts that share a common
  location in space, time and/or function
• The systems approach is the study of systems that
  emphasises the connections among various parts
  that constitute a whole.
• Systems thinking is concerned with
  connectedness as well as wholeness in problem
  analysis and solving.

Source Senge, 1993
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A new way of thinking

• Emerging new way of thinking about business
  process that
• Provides deeper understanding of inter
  relationships within an organisation and how all
  main aspects contribute to achieve organisational
  whole.
• Appreciates both role of systems thinking and
  use of system dynamics notation
• Uses systemic approach in corporate strategic
  planning and control

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What is System Thinking

• Systems thinking is the art and science of making
  reliable influences about behaviour by developing
  an increasingly deeper understanding of
  underlying structure.

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• Thinking in Circles

• Abdel-Hamids article Thinking in Cycles
  states that ...(with) the rapid evolution of
  software engineering tools, techniques, and
  technology, managers must be prepared to boldly
  go where no one has gone before while virtually
  guaranteeing that their missions will meet with
  success.
• Similarly redesigning or re-engineering Business
  processes or investing in new technology is going
  to places where organisations have not been
  before!

Source Abdel-Hamid, 1991
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System Thinking and System Dynamics

• System dynamics is a powerful, yet simple,
  methodology for developing deep insights into the
  working of various systems and providing
  microworlds for policy design.
• Over the years, system dynamics has emerged as
  one of the most powerful methodologies of social
  systems analysis and design.
• Supports modelling Dynamic Behaviour
• Instances, Causes and Problems
• Feed back loops and delays
• Influence Diagrams Construction and Use
• Systems Modelling using
• Influence Diagrams
• Stock and Flow diagrams

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Where does cause arise? Aristotelian causality

• 4 types of cause contribute explain a phenomenon
• 1. Material cause the substance that made it so
• 2. Efficient cause the direct efforts that made
  it so
• 3. Formal cause the plan or agent that made it
  so
• 4. Final cause the ultimate purpose for being
  so

?
?
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Where does cause arise? Aristotelean causality

• e.g. Why does a house exist?
• 1. Material cause wood, bricks, mortar
• 2. Efficient cause the construction workers
• 3. Formal cause the blue prints
• 4. Final cause need for a house

?
?
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Where does cause arise?

• e.g. Community living next to an old paint
  factory is discovered to suffer from prevalence
  of lead poisoning
• 1. Material cause
• 2. Efficient cause
• 3. Formal cause
• 4. Final cause

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Challenge Cause
GLOBAL
natural resource depletion Human consumption
Global warming and climate change Release of carbon from fossil fuels
Overpopulation Reproductive rights
REGIONAL
Air pollution Automobile
Species loss
Stream lake pollution Agriculture and industry
Deforestation Overpopulation, demand
Erosion/desertification Industrialized agriculture
Lack or agricultural diversity Societies demands
Environmental damage of war War
Acid rain industry
LOCAL
Suburban sprawl Lack of planning (transportation)
Sewer overflows pollution Impermeable surfaces
Waste/landfill Lack of recycling, lack of information

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System Thinking Diagrams (STDs)(Causal loop
Diagrams (CLDs)

• Systems Thinking Diagrams are composed of only
  two components, elements and influences.
• An influence also has a direction, indicated by
  an arrow, and an indicator as to whether the
  influenced element is changed in the same (S) or
  opposite (O) direction as the influencing
  element.

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• Use of Influence Diagrams

• Influence diagrams are also known as causal-loop
  diagrams. A link from A to B is positive if a
  change in A produces a change in the same
  direction.
• A link from A to B is negative if a change in A
  produces a change in B in the opposite direction.
  The direction of an arrow shows the direction of
  causation/Causality.
• It SHOULD incorporate the principal performance
  influences of the system under study.

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What are Causal Loop Diagrams (CLD) ?

• Casual Loop Diagrams are cause and effect
  representations of structures and processes that
  have loops or feedback.
• Causal loop diagrams show causality
• There is an arrow going from population to death

population
deaths
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Causal Links
A influences B. If A increases, that will
tend to increase B. If A goes down in value,
that will tend to reduce B.
C influences D. If C increases, that will
tend to decrease D. If C goes down in value,
that will tend to increase D.
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Polarity

• Polarity We can associate a direction of
  influence or polarity
• or s (same) indicates that an increase in
  the cause will lead to an increase in the effect
• - or o (opposite) indicates that positive value
  of the cause will lead to a decrease in the effect

population
deaths
population
deaths
-
-
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Loops

• A loop occurs when arrows connect a variable
  to itself through a series of other variables
• This example shows a loop from population through
  births and back to population.
• There exists both negative (balancing) and
  positive (Reinforcing) feedback loops in SD
  problems

population
births
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Anatomy of a Causal Loop Diagram
The S means that the two variables move in the
same direction, all other things being equal
Causal relationship between two variables
S
Amount Eaten
Hunger
B
O
The O means that the two variables move in
opposite directions, all other things being equal
Nature of loop. Indicates whether the loop is
balancing or reinforcing
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System Thinking Structures (Archetypes)

• The basic idea of structure(s) is to point out
  the influence one thing has on another. That is,
  how do things influence other things to change.
• If I have two things, thing 1 and thing 2, there
  are only two ways one can influence the other.
• As indicated in the diagram above, thing 1 can
  add to thing 2, as indicated by a "" sign, thus
  increasing thing 2.
• The alternative is that thing 1 can subtract from
  thing 2, as indicated by the "-" sign in the
  above figure, thus decreasing thing 2.

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System Thinking Structures (Archetypes)

• Let us examine the most common example
  (production -inventory) Sales adds to revenue.
  Even if sales decrease it will still add to
  revenue, just not quite as much as before.
• On the other hand, if sales increases it will add
  even more to revenue.
• The figure above indicates that product sales
  subtracts from finished goods inventory. If
  product sales increase it will subtract even more
  from finished goods inventory. On the other hand,
  if product sales decrease it will still subtract
  from finished goods inventory, just not quite so
  much.

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Feedback is critical in systems view

• Feedback The returning of part of the output of
  a system to be reintroduced as input (Websters)
• () feedback reinforces change
• (-) feedback counteracts change

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Reinforcing /Positive Feedback loops

• A reinforcing loop is one in which the
  interactions are such that each action adds to
  the other. Any situation where action produces a
  result which promotes more of the same action is
  representative of a reinforcing loop.
• Examples snow balls rolling down hill,
  population growth.

• Change leads to further change in same direction
• Growth enhancing
• Potentially destablizing
• Finite in extent
• Vicious cycles, bandwagons, self-fulfilling
  prophecy

Population size
( )
( )
Population growth
( )
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Reinforcing /Positive Feedback loops

• Diagram shows what happens in a typical savings
  account.
• The principal in the savings account interacts
  with the interest rate and adds to the interest.
• Interest rate is considered to be a constant in
  this example. Interest then adds to the
  principal.
• This reinforcing action happens every so many
  months depending on the period over which the
  institution computes the interest.

The SNOWBALL rolling down hill is your signal
that the loop is a reinforcing loop. The SMALL
GRAPH to the right of principle indicates that
the growth of principal is exponential.
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Reinforcing / Positive Feedback Loops

• It is denoted by R or sign or with snow ball
  symbol.
• Positive tends to run away leading to situations
  that are out of control.
• Overall polarity of feedback loop is determined
  by counting the number of links that are
  opposite.
• An even number of opposite(-) links implies
  positive feedback and an odd number of opposite
  links(-) implies negative feedback.

Causal relationship between two variables
Beer consumption
The S means that the two variables move in the
same direction, all other things being equal
( )
( )
S
Interest
Balance
BeerNut consumption
R
( )
S
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Reinforcing / Positive Feedback Loops

• Phrases that characterize the phenomenon of
  feedback include
• Snowball effect as it rolls down a mountain
  side, it picks up snow, its mass and
  circumference increase which causes the snow ball
  to grow even faster
• As a political movement grows, its popularity and
  ability to attract support also grows
• The exponential growth curve characterizes most
  positive feedback systems. World population,
  food production, industrialization, pollution all
  exhibit exponential growth

Variable
Time
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Examples Positive Feedback Loops
Invest- ment


Industrial Capital
( )
Production

• Plant A provides food that worm B uses
• Worm B released nutrients that are then used by
  microbe C
• Microbe C transfers nutrients to plant D
• Plant D provides necessary shade for plant A

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More Examples of positive feedback
( )
( )
( )
(), if even of (-) signs
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Economic Positive Loops

Investment
Profits



Advertising
Industrial Capital

Sales
Production


How many loops do we have ?
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Balancing / Negative Feedback loops

• A balancing loop is one in which action attempts
  to bring two things to agreement. Any situation
  where one attempts to solve a problem or achieve
  a goal or objective is representative of a
  balancing loop.
• Example Self regulating temperature of the
  human body which enables it to maintain a
  relatively constant internal temperature called
  homeostatis

• Phrases that characterize the phenomenon of
  feedback include
• Self governing,
• self regulating,
• self equilibrating,
• adaptive
• all implying the presence of a goal.

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Negative Feedback Loops

• This is a negative or balancing. It is denoted by
  B or - sign
• Positive tends to leads to a controlled
  equilibrium or steady state.
• Negative feedback loops exist when there are an
  odd number of negative links in a loop.
• The people there are, the more they die thus
  keeping the population low.

( - )
population
deaths
-
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Negative Feedback Loops- Four Basic Elements

• Desired state (goal) serves as a reference on
  which the system bases action and is determined
  externally.
• Gap this is the discrepancy between the goal
  and state of the system determined the magnitude
  and direction of the corrective action taken.
• Action (rate)
• System state (level).
• To minimise the discrepancy (gap) , the system
  initiates action to decrease (increase) the level.

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Balancing/Negative Feedback loops - Explanation

• The basic form of the balancing loop.
• The desired state interacts with the current
  state to produce a gap. The gap adds to the
  action and the action adds to the current state.
  The current state then subtracts from the gap.
• The small clock to the right of the arc between
  action and current state indicates some time
  delay that it takes for the action to change the
  current state. As the current state gets closer
  to the desired state the gap gets smaller and
  smaller so it adds less and less to the
  action,which is adding to the current state.
• Once the action has moved the current state to a
  point where it equals the desired state the gap
  is zero and there's no more addition to the
  action, so there is no more action.

• The balance in the centre of the loop is your
  indication that the loop is a balancing loop.
• Typical examples of balancing loops are driving
  from location A to location B, developing a
  skill, building something, fixing a problem, etc.

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More Examples of Negative Feedback Loops
( - )
( - )
( )
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Example Social Life CLD
Desired time together

How many loops do we have ?


hrs/week together
of invitations
-
pressure from boss

-

Quality of work
average time for new work
-
of mistakes
-

time spent correcting mistakes
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Causal Loop Diagramming exercises

• A good way to start is by brainstorming a list
  of all variables associated with a phenomenon.
• Then, begin your causal loop diagram by selecting
  only those system elements that are causally
  related to each other.
• Arrows between variables are used to indicate the
  direction of causality. For instance, if you
  have two variables, amount of coal burned and
  amount of acid rain generated an arrow would be
  directed from the coal to the acid rain.
• Points of arrows are labeled with () or (-) sign
  to indicate positive or negative effect. A ()
  means that change in the variable at the tail of
  the arrow leads to change in the same direction
  in the variable at the point of the arrow (i.e.,
  if the one at the tail increases, then this
  necessarily causes the one at the point to
  increase). Important when labeling, consider
  each pair of variables connected by an arrow in
  isolation from all other variables (completely
  ignore the other variables).

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Causal Loop Diagramming exercises

• Determine the overall sign of a feedback loop by
  counting the total number of (-) signs at the end
  of the arrows within the complete loop.
• The loop is a positive feedback if there is an
  even number of (-) signs (or no - signs). The
  loop is a negative feedback if there is an odd
  number of (-) signs.
• Place a large () or (-) sign in the center of
  each loop to indicate the overall direction.
  Both positive and negative loops are typically
  embedded within large dynamic systems.

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Taking a Shower The Movie
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Managing Water T in a Shower
What do you think would happen in a more
complicated setting, where you have to share the
supply of hot water (critical resource) with
someone/something else?
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Managing Water T in a Shower
Water Temperature
S
Desired Temperature
B
O
Tap setting
T Gap
(A-D)
S
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System Dynamics The Cartoon
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EXERCISES Develop causal loop diagrams from
the following verbal descriptions giving clear
explanations. Identify the relationships
polarity between each pair of variables as well
as the polarity of each loop

• Population and Economic Growth Loop As
  employment opportunities increase in a city,
  people are attracted into the urban area.
  However, in-migrants do not immediately swarm to
  employment opportunities in the area. Since
  migrants react to perceived opportunity, the lag
  in acquiring information may cause 5 to 20 year
  delay in response. Population growth from the
  influx of migrants tends to encourage business
  expansion in the growing urban area. The
  additional economical expansion creates demand
  for additional labor. This demand further
  increases employment opportunities in the area.
• Population and Land Use Loop While tending to
  reinforce economic growth, population growth
  tends to drive housing construction at a greater
  pace to match population growth. Assuming only a
  fixed amount of land available for industrial and
  housing use, increasing the housing stock makes
  less land available for business expansion. As
  the unavailability of more land begins to
  suppress business expansion in the area, the
  demand for labour decreased. Consequently, local
  employment opportunities decline. Once potential
  migrants perceive the lack of opportunities,
  declining in-migration generates a reduction in
  the population growth of the area.

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Group Work Rural Development

• Form groups of 5
• Draw a causal loop diagram showing the causal
  relationships and polarity from the following
  variables (indicate delays where applicable)
• Births
• Population
• Adult Women
• Soil fertility
• Social controls on children
• Food/person
• Intensity of Land use
• Food production
• Quality of life

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Tips Drawing CLDs

1. Name your variables carefully. In particular,
   avoid names that already imply directionality
   (e.g. amount of acid rain is an appropriate
   variable, increase in acid rain is not
   appropriate). Generally your variables should be
   nouns rather than verbs.
2. Confusion will inevitably result if you think
   about multiple arrows simultaneously when
   labeling the end of an arrow. Focus only on the
   direction and sign of causality in each pair.
   Then, when you are done labeling each individual
   arrow, figure out the sign of the loop as a
   whole.
3. Arrows in causal loop diagrams do not
   necessarily represent flows of stuff (material or
   energy). They represent flows of causality.

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Examples

• Avoid using terms that indicate directionality
• e.g. flight from city

Middle class flight from cities
( )
( )
Loss of public services
( )
Decreasing tax base
( )
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Tips Drawing CLDs

• If it helps to clarify dynamics, it is fine to
  include forcing variables that are cause, but are
  not themselves affected by the dynamics depicted
  (i.e. they are not actually part of a loop within
  the model).
• As with all models, you should strive to use
  minimum number of variables necessary to capture
  the dynamics of interest. The first draft of
  your causal loop diagram can generally be
  simplified in order to increase clarity.
  Typically you will want to redraw your model to
  make it as easy for others to interpret as
  possible.

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Food for thought