In Business and Life...It's Always the System
“When people in organizations focus only on their position, they have little sense of responsibility for the results produced when all positions interact. Moreover, when results are disappointing, it can be very difficult to know why. All you can do is assume that “someone screwed up.”– Peter Senge
When creating a model for any system – a representation of how you expect events and participants to behave – we must first reconcile that as advanced as our knowledge of the world has become, the gaps in knowledge still outweigh the known. This variance is due in large part to an impossibility of considering every variable that can affect any system at every point in time. Every system has the potential to fall into chaos, but part of the difficulty in studying chaos arises because complex systems are difficult to study in pieces. Efforts to separate parts of dynamical systems often fall apart. The system depends on each little part of that system and the way it interacts with all other components.
How do we analyze a system if we’re ignorant of its components? According to a report from British Daily Mail, at present, one of the most comprehensive evaluation reports, shows that there may be one trillion different kinds of species on Earth. It is at least ten times than the previous assessment data, which means 99.999% of the species on Earth are unknown. Jay Lennon, an Indiana University Professor, said, "Assessment of the number of species on Earth is a huge challenge, our data combined with the largest database of ecological models, will provide a rigorous statistical report on the new Earth microbial species. Microbes are minuscule, and the human eye can’t see single-cell organisms, bacteria, archaea, and some fungi." If we still don’t know what exists on our planet, it becomes difficult to assess what factors – inputs, stocks, and flows – are providing what feedback loops. We’re turning a lever with unknown consequences.
Donella Meadows, author of Thinking in Systems and Limits To Growth, provides a definitive overview of the basics we need to account for when analyzing how the whole performs. When leading an organization, some of the most important concepts focus on:
- 1.The least prominent part of the system is often the most crucial determinant of the system’s behavior.
- 2.Reinforcing feedback loops are self-enhancing, leading to exponential growth or to run away collapses over time.
- 3.There must be at least one reinforcing loop driving the growth and at least one balancing loop constraining the growth because no system can grow forever in a finite environment.
- 4.There are always limits to resilience.
- 5.Many relationships in systems are non-linear.
- 6.At any given time, the input that is most relevant to a system is the one that is most limiting.
- 7.Everything we think and know about the world is a model, and our models fall far short of representing the real world fully.
When a piece of a system overcomes the total system’s goals, it is considered suboptimal. The converse is also true. If there is too much central control preventing other parts from functioning freely, the performance of the system becomes crippled. Ideally, the purpose of the upper layers of any hierarchy is to serve the objectives of the lower layers. An organization can no sooner let the “inmates run the asylum” than they can allow oppressive dictatorship if they hope for the system to thrive.
In light of a system’s lean towards chaos, it is critical we take our eye of short-term events and take a longer view of behavior and structure. When most of us attempt to illustrate a process, it is typically depicted in a linear fashion, with a start (input), events, and a finish (output). However, we must also consider that not all events are weighted equally within a continuum. The relationship between cause and effect can only be drawn with curves or wiggles, not with a straight line. Some things matter more than others in the dynamic behavior of a system.
George Monbiot’s TED talk, For More Wonder, Rewild the World, explored the concept of trophic cascades, which fundamentally change a system’s structure. In 1995, wolves were reintroduced to Yellowstone National Park, ending a 70-year absence. Due to a lack of natural predators, the deer population had grown exponentially during that time and had managed to reduce the vegetation in the area to almost nothing. However, as soon as wolves were reintroduced, although small in number, big changes started to take place. Initially, they began to kill some of the deer, but more importantly they radically changed the behavior of them. The deer stayed away from certain areas of the park – especially the valleys and the gorges where they could be trapped more easily – and those places began to regenerate. What had been barren mountainsides in the valley began to become forests of aspen and willow and cottonwood. Once the trees grew, birds moved in, and beavers started to reappear now that they had trees to eat.
Beavers, being engineers, created another cascade and began developing niches for other species. The dams they built in the rivers provided habitat for otters, muskrats, ducks, fish, reptiles, and amphibians. The wolves also killed some coyotes, which allowed the number of mice and rabbits to grow, which attracted hawks, weasels, foxes, and badgers. Ravens and bald eagles swooped down to feed on the carrion the wolves had left, and then the bears found the carcasses as well. Now that the trees and bushes were reestablished, bears began to feed on berries and also cull some of the deer.
Amazingly, the rivers began to change as well. They began to meander less. There was less erosion. The channels narrowed. More pools formed, which were great for wildlife habitats. The rivers changed in response to the wolves, and the reason was that the regenerating forests stabilized the banks so that they collapsed less often, so that the rivers became more fixed in their course. Similarly, by driving the deer out of some places and with the vegetation recovering on the valley sides, there was less soil erosion, because the vegetation stabilized that as well. In short order, few wolves transformed not just the ecosystem of the Yellowstone National Park, this huge area of land, but also its physical geography.
We often draw the wrong conclusions from the accurate analysis because we are focused on the event outputs, which are snapshots of a particular moment in time, rather than dynamic patterns of behavior. Chaos creates growth, stagnation, decline, oscillation, randomness, or evolution in a system, but taking a longer view of history better reveals the overall structure of the system. We saw the event-by-event rise and fall of candidates during the 2016 Presidential Election, as short-term analyses are postulated based on a debate performance or new found “skeleton in the closet.” Instead of looking at the overall structure of how a candidate was likely to perform over time, we instead focused on catchy headlines and sensationalism. This creates a feedback loop for the candidates in the election as they realize if a little bit of extreme rhetoric did some good then a lot more will do a lot more good.
In general, human beings are atrocious at drawing correct conclusions from events. Daniel Kahneman, a Nobel Prize Winner in Economics, says we are slaves to our psychological, emotional, social, and situational influences whenever we are confronted with drawing a conclusion. Kahneman terms this state “cognitive bias” (bounded rationality), and it causes us to make decisions based on limited information or self-interest. This state is difficult to overcome due to cognitive dissonance.
Leon Festinger proposed the cognitive dissonance theory in 1957 and showed that most people want to maintain consistency in their thoughts and beliefs, and if those worldviews are challenged, it can lead to irrational behavior. When two cognitions are at odds with each other, we will tend to hold on to our belief systems even when opposing facts are present. For example, thinking smoking causes lung cancer will cause dissonance if a person smokes. However, new information such as “research has not proved definitely that smoking causes lung cancer" may reduce the conflict. In a confused, chaotic world, dissonance increases the strength of the feedback loop as we seek evidence that corroborates what we already believe and ignore any evidence counter to it.
When dealing with chaos, and realizing that everything physical comes from somewhere, goes somewhere, and keeps moving, we have to invent boundaries for clarity and sanity. Deciding where to draw boundaries depends on who wants to know, for what purpose, over how long. Boundaries are necessary when we are analyzing for desired outputs. For example, if we are seeking to find the best possible method for educating our children, we would look at the school as the system. Elements of the system would include the inflows (the physical building, location, teachers, learning tools), stocks (the students) and the outflows (highly-learned students).
By setting these boundaries, we can measure each elements relative contribution to the system within the limits we have set, and adjust flows as desired. However, outside the borders of the school model can be limiting factors such as unsupportive parents, hungry children, or a fiscal shortfall. In considering boundaries to a system, we know that infinite growth is not possible – we cannot exponentially add unlimited learning tools into a school – so we must decide what limits to live within.
 "Systems Thinking Resources." The Academy for Systems Change. http://donellameadows.org/systems-thinking-resourc....
Monbiot, George. "Transcript of "For more wonder, rewild the world"." George Monbiot: For more wonder, rewild the world | TED Talk Subtitles and Transcript | TED.com.