Thinking in Systems

Thinking in Systems: A Primer by Donella H. Meadows

Here are some of my notes...

Managers are not confronted with problems that are independent of each other, but with dynamic situations that consist of complex systems of changing problems that interact with each other. I call such situations messes.... Managers do not solve problems, they manage messes. -RUSSELL ACKOFF,' operations theorist

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"Now once again. What made the Slinky bounce up and down?"

The answer clearly lies within the Slinky itself. The hands that manipulate it suppress or release some behavior that is latent within the structure of the spring.

That is a central insight of systems theory.

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How to know whether you are looking at a system or just a bunch of stuff:

A) Can you identify parts? ... and

B) Do the parts affect each other? ... and

C) Do the parts together produce an effect that is different from the effect of each part on its own? ... and perhaps

D) Does the effect, the behavior over time, persist in a variety of circumstances?

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Many interconnections are flows of information-signals that go to decision points or action points within a system.

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You can understand the relative importance of a system's elements, interconnections, and purposes by imagining them changed one by one. Changing elements usually has the least effect on the system. If you change all the players on a football team, it is still recognizably a football team. (It may play much better or much worse-particular elements in a system can indeed be important.)

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If the interconnections change, the system may be greatly altered. It may even become unrecognizable, even though the same players are on the team. Change the rules from those of football to those of basketball, and you've got, as they say, a whole new ball game.

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Changes in function or purpose also can be drastic. What if you keep the players and the rules but change the purpose-from winning to losing, for example? What if the function of a tree were not to survive and reproduce but to capture all the nutrients in the soil and grow to unlimited size?

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A change in purpose changes a system profoundly, even if every element and interconnection remains the same.

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A system's function or purpose is not necessarily spoken, written, or expressed explicitly, except through the operation of the system. The best way to deduce the system's purpose is to watch for a while to see how the system behaves.

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Interconnections are also critically important. Changing relationships usually changes system behavior.

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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 system stock is just what it sounds like: a store, a quantity, an accumulation of material or information that has built up over time. It may be the water in a bathtub, a population, the books in a bookstore, the wood in a tree, the money in a bank, your own self-confidence. A stock does not have to be physical. Your reserve of good will toward others or your supply of hope that the world can be better are both stocks.

Stocks change over time through the actions of a flow. Flows are filling and draining, births and deaths, purchases and sales, growth and decay, deposits and withdrawals, successes and failures. A stock, then, is the present memory of the history of changing flows within the system.

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If you understand the dynamics of stocks and flows-their behavior over time-you understand a good deal about the behavior of complex systems. And if you have had much experience with a bathtub, you understand the dynamics of stocks and flows.

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Stocks generally change slowly, even when the flows into or out of them change suddenly. Therefore, stocks act as delays or buffers or shock absorbers in systems.

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The tub can't fill up immediately, even with the inflow faucet on full blast. A stock takes time to change, because flows take time to

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If you have a sense of the rates of change of stocks, you don't expect things to happen faster than they can happen. You don't give up too soon.

You can use the opportunities presented by a system's momentum to guide it toward a good outcome-much as a judo expert uses the momentum of an opponent to achieve his or her own goals.

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Systems thinkers see the world as a collection of stocks along with the mechanisms for regulating the levels in the stocks by manipulating flows.

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A feedback loop is a closed chain of causal connections from a stock, through a set of decisions or rules or physical laws or actions that are dependent on the level of the stock, and back again through a flow to change the stock.

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Feedbacks-the interconnections, the information part of the system-can fail for many reasons. Information can arrive too late or at the wrong place. It can be unclear or incomplete or hard to interpret. The action it triggers may be too weak or delayed or resource-constrained or simply ineffective. The goal of the feedback loop may never be reached by the actual stock.

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Reinforcing feedback loops are self-enhancing, leading to exponential growth or to runaway collapses over time. They are found whenever a stock has the capacity to reinforce or reproduce itself.

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If A causes B, is it possible that B also causes A?

You'll stop looking for who's to blame; instead you'll start asking, "What's the system?"

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The information delivered by a feedback loop can only affect future behavior; it can't deliver the information, and so can't have an impact fast enough to correct behavior that drove the current feedback.

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A stock-maintaining balancing feedback loop must have its goal set appropriately to compensate for draining or inflowing processes that affect that stock. Otherwise, the feedback process will fall short of or exceed the target for the stock.

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Oscillations like these are frequently encountered in inventories and in many other systems. Try taking a shower sometime where there's a very long pipe between the hot- and cold-water mixer and the showerhead, and you'll experience directly the joys of hot and cold oscillations because of a long response delay.

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Part of the problem here is that the car dealer has been reacting not too slowly, but too quickly. Given the configuration of this system, she has been overreacting. Things would go better if, instead of decreasing her response delay from three days to two, she would increase the delay from three days to six,

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Changing the delays in a system can make it much easier or much harder to manage. You can see why system thinkers are somewhat fanatic on the subject of delays. We're always on the alert to see where delays occur in systems, how long they are, whether they are delays in information streams or in physical processes. We can't begin to understand the dynamic behavior of systems unless we know where and how long the delays are.

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Therefore, any physical, growing system is going to run into some kind of constraint, sooner or later. That constraint will take the form of a balancing loop that in some way shifts the dominance of the reinforcing loop driving the growth behavior, either by strengthening the outflow or by weakening the inflow.

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In physical, exponentially growing systems, there must be at least one reinforcing loop driving the growth and at least one balancing loop constraining the growth, because no physical system can grow forever in a finite environment.

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Nonrenewable resources are stock-limited. The entire stock is available at once, and can be extracted at any rate (limited mainly by extraction capital). But since the stock is not renewed, the faster the extraction rate, the shorter the lifetime of the resource.

Renewable resources are flow-limited. They can support extraction or harvest indefinitely, but only at a finite flow rate equal to their regeneration rate. If they are extracted faster than they regenerate, they may eventually be driven below a critical threshold and become, for all practical purposes, nonrenewable.

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Resilience is not the same thing as being static or constant over time. Resilient systems can be very dynamic. Short-term oscillations, or periodic outbreaks, or long cycles of succession, climax, and collapse may in fact be the normal condition, which resilience acts to restore!

And, conversely, systems that are constant over time can be unresilient. This distinction between static stability and resilience is important. Static stability is something you can see; it's measured by variation in the condition of a system week by week or year by year. Resilience is something that may be very hard to see, unless you exceed its limits, overwhelm and damage the balancing loops, and the system structure breaks down.

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Self-organization produces heterogeneity and unpredictability. It is likely to come up with whole new structures, whole new ways of doing things. It requires freedom and experimentation, and a certain amount of disorder. These conditions that encourage self-organization often can be scary for individuals and threatening to power structures. As a consequence, education systems may restrict the creative powers of children instead of stimulating those powers. Economic policies may lean toward supporting established, powerful enterprises rather than upstart, new ones. And many governments prefer their people not to be too self-organizing.

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The result is called a Koch snowflake. (See Figure 46.) Its edge has tremendous length-but it can be contained within a circle. This structure is one simple example of fractal geometry-a realm of mathematics and art populated by elaborate shapes formed by relatively simple rules.

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The original purpose of a hierarchy is always to help its originating subsystems do their jobs better. This is something, unfortunately, that both the higher and the lower levels of a greatly articulated hierarchy easily can forget. Therefore, many systems are not meeting our goals because of malfunctioning hierarchies.

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To be a highly functional system, hierarchy must balance the welfare, freedoms, and responsibilities of the subsystems and total system-there must be enough central control to achieve coordination toward the large-system goal, and enough autonomy to keep all subsystems flourishing, functioning, and self-organizing.

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The budworm/spruce/fir system oscillates over decades, but it is ecologically stable within bounds. It can go on forever. The main effect of the budworm is to allow tree species other than fir to persist. But in this case what is ecologically stable is economically unstable. In eastern Canada, the economy is almost completely dependent on the logging industry, which is dependent on a steady supply of fir and spruce.

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Everything physical comes from somewhere, everything goes somewhere, everything keeps moving.

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The lesson of boundaries is hard even for systems thinkers to get. There is no single, legitimate boundary to draw around a system. We have to invent boundaries for clarity and sanity; and boundaries can produce problems when we forget that we've artificially created them.

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Systems analysts often fall into the opposite trap: making boundaries too large. They have a habit of producing diagrams that cover several pages with small print and many arrows connecting everything with everything. There is the system! they say. If you have considered anything less, you are academically illegitimate.

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Ideally, we would have the mental flexibility to find the appropriate boundary for thinking about each new problem. We are rarely that flexible. We get attached to the boundaries our minds happen to be accustomed to. Think how many arguments have to do with boundaries-national boundaries, trade boundaries, ethnic boundaries, boundaries between public and private responsibility, and boundaries between the rich and the poor, polluters and pollutees, people alive now and people who will come in the future. Universities can maintain disputes for years about the boundaries between economics and government, art and art history, literature and literary criticism.

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

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Rich countries transfer capital or technology to poor ones and wonder why the economies of the receiving countries still don't develop, never thinking that capital or technology may not be the most limiting factors.

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Insight comes not only from recognizing which factor is limiting, but from seeing that growth itself depletes or enhances limits and therefore changes what is limiting.

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We are surprised over and over again at how much time things take. Jay Forrester used to tell us, when we were modeling a construction or processing delay, to ask everyone in the system how long they thought the delay was, make our best guess, and then multiply by three. (That correction factor also works perfectly, I have found, for estimating how long it will take to write a book!)

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Perhaps having been an environmental critic of big business, you find yourself making environmental decisions for big business. Would that such transitions could happen much more often, in all directions, to broaden everyone's horizons!

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Change comes first from stepping outside the limited information that can be seen from any single place in the system and getting an overview.

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The difference, it turned out, was in the position of the electric meter. The families with high electricity use were the ones with the meter in the basement, where people rarely saw it. The ones with low use had the meter in the front hall where people passed, the little wheel turning around, adding up the monthly electricity bill many times a day.13

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Understanding archetypal problem-generating structures is not enough. Putting up with them is impossible. They need to be changed. The destruction they cause is often blamed on particular actors or events, although it is actually a consequence of system structure. Blaming, disciplining, firing, twisting policy levers harder, hoping for a more favorable sequence of driving events, tinkering at the margins-these standard responses will not fix structural problems. That is why I call these archetypes "traps"

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This is the systemic trap of "fixes that fail" or "policy resistance." You see this when farm programs try year after year to reduce gluts, but there is still overproduction. There are wars on drugs, after which drugs are as prevalent as ever.

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The alternative to overpowering policy resistance is so counterintuitive that it's usually unthinkable. Let go. Give up ineffective policies. Let the resources and energy spent on both enforcing and resisting be used for more constructive purposes. You won't get your way with the system, but it won't go as far in a bad direction as you think, because much of the action you were trying to correct was in response to your own action. If you calm down, those who are pulling against you will calm down too.

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The most effective way of dealing with policy resistance is to find a way of aligning the various goals of the subsystems, usually by providing an overarching goal that allows all actors to break out of their bounded rationality. If everyone can work harmoniously toward the same outcome (if all feedback loops are serving the same goal), the results can be amazing.

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The trap called the tragedy of the commons comes about when there is escalation, or just simple growth, in a commonly shared, erodable environment.

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The tragedy of the commons arises from missing (or too long delayed) feedback from the resource to the growth of the users of that resource.

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Educate and exhort the users, so they understand the consequences of abusing the resource. And also restore or strengthen the missing feedback link, either by privatizing the resource so each user feels the direct consequences of its abuse or (since many resources cannot be privatized) by regulating the access of all users to the resource.

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THE TRAP: DRIFT TO LOW PERFORMANCE

Allowing performance standards to be influenced by past performance, especially if there is a negative bias in perceiving past performance, sets up a reinforcing feedback loop of eroding goals that sets a system drifting toward low performance.

THE WAY OUT

Keep performance standards absolute. Even better, let standards be enhanced by the best actual performances instead of being discouraged by the worst. Use the same structure to set up a drift toward high performance!

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THE TRAP: ESCALATION

When the state of one stock is determined by trying to surpass the state of another stock-and vice versa-then there is a reinforcing feedback loop carrying the system into an arms race, a wealth race, a smear campaign, escalating loudness, escalating violence. The escalation is exponential and can lead to extremes surprisingly quickly. If nothing is done, the spiral will be stopped by someone's collapse-because exponential growth cannot go on forever.

THE WAY OUT

The best way out of this trap is to avoid getting in it. If caught in an escalating system, one can refuse to compete (unilaterally disarm), thereby interrupting the reinforcing loop. Or one can negotiate a new system with balancing loops to control the escalation.

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THE TRAP: SUCCESS TO THE SUCCESSFUL

If the winners of a competition are systematically rewarded with the means to win again, a reinforcing feedback loop is created by which, if it is allowed to proceed uninhibited, the winners eventually take all, while the losers are eliminated.

THE WAY OUT

Diversification, which allows those who are losing the competition to get out of that game and start another one; strict limitation on the fraction of the pie any one winner may win (antitrust laws); policies that level the playing field, removing some of the advantage of the strongest players or increasing the advantage of the weakest; policies that devise rewards for success that do not bias the next round of competition.

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Shifting the burden, dependence, and addiction arise when a solution to a systemic problem reduces (or disguises) the symptoms, but does nothing to solve the underlying problem. Whether it is a substance that dulls one's perception or a policy that hides the underlying trouble, the drug of choice interferes with the actions that could solve the real problem.

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Again, the best way out of this trap is to avoid getting in. Beware of symptom-relieving or signal-denying policies or practices that don't really address the problem. Take the focus off short-term relief and put it on long-term restructuring.

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THE TRAP: RULE BEATING

Rules to govern a system can lead to rule beating-perverse behavior that gives the appearance of obeying the rules or achieving the goals, but that actually distorts the system.

THE WAY OUT

Design, or redesign, rules to release creativity not in the direction of beating the rules, but in the direction of achieving the purpose of the rules.

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If the desired system state is good education, measuring that goal by the amount of money spent per student will ensure money spent per student. If the quality of education is measured by performance on standardized tests, the system will produce performance on standardized tests. Whether either of these measures is correlated with good education is at least worth thinking about.

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THE TRAP: SEEKING THE WRONG GOAL

System behavior is particularly sensitive to the goals of feedback loops. If the goals-the indicators of satisfaction of the rules-are defined inaccurately or incompletely, the system may obediently work to produce a result that is not really intended or wanted.

THE WAY OUT

Specify indicators and goals that reflect the real welfare of the system. Be especially careful not to confuse effort with result or you will end up with a system that is producing effort, not result.

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But Forrester goes on to point out that although people deeply involved in a system often know intuitively where to find leverage points, more often than not they push the change in the wrong direction.

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Missing information flows is one of the most common causes of system malfunction. Adding or restoring information can be a powerful intervention, usually much easier and cheaper than rebuilding physical infrastructure.

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When you understand the power of system self-organization, you begin to understand why biologists worship biodiversity even more than economists worship technology. The wildly varied stock of DNA, evolved and accumulated over billions of years, is the source of evolutionary potential, just as science libraries and labs and universities where scientists are trained are the source of technological potential.

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Even people within systems don't often recognize what whole-system goal they are serving. "To make profits," most corporations would say, but that's just a rule, a necessary condition to stay in the game. What is the point of the game?

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But there's nothing physical or expensive or even slow in the process of paradigm change. In a single individual it can happen in a millisecond.

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Whole societies are another matter-they resist challenges to their paradigms harder than they resist anything else.

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So how do you change paradigms? Thomas Kuhn, who wrote the seminal book about the great paradigm shifts of science, has a lot to say about that.' You keep pointing at the anomalies and failures in the old paradigm. You keep speaking and acting, loudly and with assurance, from the new one. You insert people with the new paradigm in places of public visibility and power. You don't waste time with reactionaries; rather, you work with active change agents and with the vast middle ground of people who are open-minded.

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Systems modelers say that we change paradigms by building a model of the system, which takes us outside the system and forces us to see it whole.

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It is to "get" at a gut level the paradigm that there are paradigms, and to see that that itself is a paradigm, and to regard that whole realization as devastatingly funny. It is to let go into not-knowing, into what the Buddhists call enlightenment.

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In the end, it seems that mastery has less to do with pushing leverage points than it does with strategically, profoundly, madly, letting go and dancing with the system.

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Our first comeuppance came as we learned that it's one thing to understand how to fix a system and quite another to wade in and fix it. We had many earnest discussions on the topic of "implementation," by which we meant "how to get managers and mayors and agency heads to follow our advice."

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The future can't be predicted, but it can be envisioned and brought lovingly into being. Systems can't be controlled, but they can be designed and redesigned.

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We can't control systems or figure them out. But we can dance with them!

I already knew that, in a way. I had learned about dancing with great powers from whitewater kayaking, from gardening, from playing music, from skiing. All those endeavors require one to stay wide awake, pay close attention, participate flat out, and respond to feedback. It had never occurred to me that those same requirements might apply to intellectual work, to management, to government, to getting along with people.

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Before you disturb the system in any way, watch how it behaves. If it's a piece of music or a whitewater rapid or a fluctuation in a commodity price, study its beat. If it's a social system, watch it work. Learn its history. Ask people who've been around a long time to tell you what has happened. If possible, find or make a time graph of actual data from the system-peoples' memories are not always reliable when it comes to timing.

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If I could, I would add an eleventh commandment to the first ten: Thou shalt notdistort, delay, or withhold information. You can drive a system crazy by muddying its information streams. You can make a system work better with surprising ease if you can give it more timely, more accurate, more complete information.

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If I could, I would add an eleventh commandment to the first ten: Thou shalt notdistort, delay, or withhold information. You can drive a system crazy by muddying its information streams. You can make a system work better with surprising ease if you can give it more timely, more accurate, more complete information.

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Pretending that something doesn't exist if it's hard to quantify leads to faulty models. You've already seen the system trap that comes from setting goals around what is easily measured, rather than around what is important. So don't fall into that trap.

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If something is ugly, say so. If it is tacky, inappropriate, out of proportion, unsustainable, morally degrading, ecologically impoverishing, or humanly demeaning, don't let it pass. Don't be stopped by the "if you can't define it and measure it, I don't have to pay attention to it" ploy. No one can define or measure justice, democracy, security, freedom, truth, or love. No one can define or measure any value. But if no one speaks up for them, if systems aren't designed to produce them, if we don't speak about them and point toward their presence or absence, they will cease to exist.

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Don't be an unthinking intervenor and destroy the system's own self-maintenance capacities. Before you charge in to make things better, pay attention to the value of what's already there.

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"Intrinsic responsibility" means that the system is designed to send feedback about the consequences of decision making directly and quickly and compellingly to the decision makers. Because the pilot of a plane rides in the front of the plane, that pilot is intrinsically responsible. He or she will experience directly the consequences of his or her decisions.

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The thing to do, when you don't know, is not to bluff and not to freeze, but to learn. The way you learn is by experiment-or, as Buckminster Fuller put it, by trial and error, error, error. In a world of complex systems, it is not appropriate to charge forward with rigid, undeviating directives. "Stay the course" is only a good idea if you're sure you're on course. Pretending you're in control even when you aren't is a recipe not only for mistakes, but for not learning from mistakes. What's appropriate when you're learning is small steps, constant monitoring, and a willingness to change course as you find out more about where it's leading.

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Seeing systems whole requires more than being "interdisciplinary," if that word means, as it usually does, putting together people from different disciplines and letting them talk past each other. Interdisciplinary communication works only if there is a real problem to be solved, and if the representatives from the various disciplines are more committed to solving the problem than to being academically correct. They will have to go into learning mode. They will have to admit ignorance and be willing to be taught, by each other and by the system.

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Sherwood, Dennis. Seeing the Forest for the Trees: A Manager's Guide to Applying Systems Thinking. (London: Nicholas Brealey Publishing, 2002).