A system is a set of things interconnected in such a way that they produce their own pattern of behavior over time. A complex system is made of a simple system that works. Examples of systems are human beings, cars, businesses, etc.
It is more than the sum of its parts. It may exhibit adaptive, dynamic, goal-seeking, and self-preserving behavior.
“A complex system that works is invariably found to have evolved from a simple system that worked”
John Gall
System Theorist
A system must consist of three kinds of things: elements, interconnections, and a function or purpose. For example, a football team is a system with elements such as players, coach, field, and ball. Its interconnections are the rules of the game, the coach’s strategy, the players’ communications, and the laws of physics that govern the motions of the ball and players. The purpose of the team is to win games, or have fun, or get exercise, or make millions of dollars or all of the above.
Stocks and Flows
To begin, let’s look at the building blocks of a system. A stock is the foundation of any system. Stocks are the elements of the system that you can see, feel, count, or measure at any given time. A stock is the increase of material or information that has built up over time. Examples of stocks include the population, the money in a bank, or your own self-confidence.
Stocks change over time through increase and decrease know as flow. For example, your bank account goes up and down through deposits and withdrawals.
Human beings seem to focus on inflows more easily than outflows. We are only concerned about how much is coming into our bank accounts, not the outflows. We tend to ignore how much we spend – outflows. We fail to see that filling a leaky bathtub, is either increasing the inflows or reducing outflows. We seem to focus on the inflows.
The feedback loop in System
Secondly, we are going to discuss how a system is assessed. A feedback loop is formed when changes in a stock affect the flows into or out of that same stock. The feedback loop can be quite simple and direct. Imagine an interest-bearing savings account in a bank. The total amount of money in the account (the stock) affects how much money comes into the account as interest.
Reinforcing loops are found wherever a system element has the ability to reproduce itself or to grow as a constant fraction of itself. Those elements include populations, economies, and interest-bearing accounts.
Reinforcing feedback loops are self-enhancing (positive), leading to exponential growth or runaway collapses (negative) over time. A positive reinforcing feedback loop is that of an interesting bearing investment account which can grow exponentially with time. A negative reinforcing loop is that of credit card debts or loans which can lead to bankruptcy.
A balancing feedback loop is self-correcting. Examples include preventive medicine, exercise, and good nutrition. These activities help to bolster the body’s ability to fight disease.
There is a difference between a balancing and a reinforcing feedback loop. A balancing feedback loop is self-correcting; a reinforcing feedback loop is self-reinforcing. The more it works, the more it gains the power to work some more, driving system behavior in one direction. The more people catch the flu, the more they infect other people.
System resilience
In addition, let’s look at the concept of resilience in the system. Resilience is a measure of a system’s ability to survive and persist within a variable environment. The opposite of resilience is brittleness or rigidity. The resilience in a system is the ability to bounce or spring back into shape, position, etc., after being pressed or stretched. Your level of elasticity determines your ability to recover strength, spirits, good humor, or any other aspect quickly.
A system becomes resilient from a rich structure of many feedback loops that can work in different ways to restore a system even after a crisis. The human body is an astonishing example of a resilient system. It can fend off thousands of different kinds of invaders, it can tolerate wide ranges of temperature and wide variations in the food supply. It can also reallocate blood supply, repair rips, gear up or slow down metabolism, and compensate to some extent for missing or defective parts.
Systems need to be managed not only for productivity or stability but also for resilience. Your ability to recover from challenges, your ability to restore or repair themselves.
How system thinking improves the way we understand the world?
Finally, Everything we think we know about the world is a model. Every word and every language is a model. All maps and statistics, books and databases, equations, and computer programs are models. Every we know is a perception of the world. In other words, it’s a mental model of the objective reality.
Our models usually have a strong congruence with the world. That is why we are such a successful species in the biosphere. In other words, our mental models are fairly accurate.
However, and conversely, our models fall far short of representing the world fully. In other words, our mental models are not complete.
We are constantly surprised because human beings think in linear terms. But the world is full of nonlinear events such as exponential growth on investments through compound interest.
My Take
Our world view is a model of the objective reality. Systems thinking is an invaluable lens in enable us to understand our reality.
Practical Insights
- Manage your business, body, and mind to be resilient
- Stay on the side of positive reinforcement loops using the compound effect to your advantage
- Update your mental models by seeking knowledge.
