Accumulator: a structural term for anything that accumulates, e.g., water in a bathtub, savings in a bank account, current inventory. In the STELLA modeling software, an accumulator is used as a genetic symbol for anything that accumulates. Also referred to as a Stock or a Level.

Balancing Loop/Process with Delay: (a systems archetype). When a balancing process has a long delay, the usual response is to over-correct, leading to wild swings in behavior such as real estate cycles.

Balancing Loop/Process: along with reinforcing loops, it forms the two building blocks of dynamic systems. Balancing processes seek equilibrium — they try to bring things to a desired state and keep them there. They also limit and constrain. A balancing loop depicts a balancing process. Also called Negative Loop.

Behavior Over Time (BOT) Diagram: (one of the ten tools of systems thinking). BOT diagrams capture the history or future trend of one or more variables over time. By sketching the variables on the same graph, we can gain an explicit understanding of how they interact over time. Also called Reference Modes.

Causal Loop Diagram: (one of the ten tools of systems thinking). A closed loop of cause-and-effect linkages which captures how variables in a system are interrelated.

Eroding Goals: (a systems archetype). In an “Eroding Goals” scenario, a gradual downward slide in performance goals goes unnoticed, threatening the long-term future of the system or organization. Example: lengthening delivery delays.

Escalation: (a systems archetype). In this archetype, two parties compete for superiority in an arena. As one party’s actions put it ahead, the other party “retaliates” by increasing its actions. The result is a continual ratcheting up of activity on both sides. Examples: price wars, the U.S.-U.S.S.R. arms race.

Feedback: the return of information about the status of a process. For example, annual performance reviews are a way of returning information to an employee about the status of his/her work.

Fixes that Fail: (a systems archetype). In a “Fixes that Fail” situation, a fix is applied to a problem that has immediate positive results, but has unforeseen long-term consequences that eventually make the problem worse. Also known as Fixes that Backfire.

Flow: the amount of change something undergoes during a particular unit of time. For example, the amount of water that flows out of a tub each minute, or the amount of interest earned in a savings account each month. Also called a Rate.

Generic Structures-structures that can be generalized across many different settings because the underlying relationships are fundamentally the same or “generic.” Systems archetypes comprise a particular class of generic structures.

Graphical Function Diagram (GFD): (one of the ten tools of systems thinking). GFD’s show how one variable interacts with another (such as the effect of delivery delays on sales) by plotting the relationship between the two over the entire range of relevant values. The resulting diagram is a concise hypothesis of how the two variables interrelate. Also called Table Functions.

Growth and Under-investment: (a systems archetype). In this situation, resource investments in a growing area are not made due to short-term pressures. As growth begin to stall due to the lack of resources, there is less incentive for adding capacity, which further slows the growth.

Learning Laboratory: (one of the ten tools of systems thinking). A learning laboratory takes a management flight simulator and embeds it in a learning environment. There, groups of managers use a combination of systems thinking tools to explore the dynamics of a particular system and inquire into their own understanding of that system. Learning labs serve as a manager’s practice field.

Level: see Accumulator.

Leverage Point: an area where small change can yield large improvements in a system.

Limits to Success: (a systems archetype). In a “Limits to Success” scenario, a company or product line grows rapidly at first, but eventually begins to slow or even decline. The reason is that the system has hit some “limit” — capacity constraints, resource limits, market saturation, etc.—that is inhibiting further growth. Also called Limits to Growth.

Management Flight Simulator (MFS): (one of the ten tools of systems thinking). Similar to a pilot’s flight simulator, a MFS allows managers to test the outcome of different policies and decisions without “crashing and burning” real companies. It is based on a system dynamics computer model that has been changed into an interactive decision making simulator through the use of an interface.

Negative Feedback Loop: see Balancing Loop.

Policy Structure Diagram: (one of the ten tools of systems thinking). Policy Structure Diagrams are used to create a conceptual “map” of the decision-making process that is embedded in an organization. It highlights the factors which are weighed at each decision point.

Positive Feedback Loop: see Reinforcing Loop.

Rate: see Flow.

Reinforcing Loop/Process: along with balancing loops, it forms the two building blocks of dynamic systems. Reinforcing processes produce both growth and collapse — they compound change in one direction with even more change. A reinforcing loop depicts a reinforcing process. Also known as Vicious Cycles or Virtuous Cycles and Positive Feedback Loops.

Shifting the Burden: (a systems archetype). In a “Shifting the Burden” situation, a short-term solution is tried that successfully solves an ongoing problem. As the solution is used over and over again, it takes attention away from more fundamental solutions. Over time, the ability to apply a fundamental solution may decrease, resulting in a greater reliance on the symptomatic solution. Example: drug or alcohol dependency in response to stress.

Shifting the Burden to the Intervener: (a systems archetype). A special case of “Shifting the Burden” which occurs when an intervener is brought in to help solve an ongoing problem. Over time, as the intervener successfully handles the problem, the people within the system become less capable of dealing with the problem themselves, leading to further dependence on the intervener. Example: ongoing use of outside consultants.

Simulation Model: (one of the ten tools of systems thinking). A computer model that allows you to map the relationships that are important to a problem or an issue and then simulate the interaction of those variables over time.

Stock: see Accumulator.

Structural Diagram: Draws out the accumulators and flows in a system, giving an overview of the major structural elements that produce the system’s behavior. Also called Flow Diagrams or Accumulator/Flow Diagrams.

Structure-Behavior Pairs: (one of the ten tools of systems thinking). Structure-Behavior Pairs consist of a structural representation of a business issue (using accumulators and flows) and the corresponding Behavior Over Time (BOT) Diagram for the issue being studied.

Structure: the manner in which the elements of a system are organized or interrelated; the building blocks of a larger system. It includes not only the organizational chart, but incentive systems, information flows, and interpersonal interactions. The terms structure and system are sometimes used interchangeably.

Success to the Successful: (a systems archetype). In this situation, two activities compete for a common but limited resource. The more successful activity is consistently given more resources, allowing it to succeed even more, while the less successful one becomes starved for resources and eventually dies out.

System: a group of interacting, interrelated, or interdependent elements forming a complex whole. Almost always defined with respect to a specific purpose. The terms system and structure are sometimes used interchangeably.

Systems Archetypes: (one of the ten tools of systems thinking). Systems archetypes are the “classic storylines” in systems thinking—common patterns and structures that occur repeatedly in different settings.

System Dynamics: a field of study which includes a methodology for constructing computer simulation models to achieve better understanding and control of social and corporate systems. It draws on organizational studies, behavioral decision theory, and engineering to provide a theoretical and empirical base for structuring the relationships in complex systems.

Systems Thinking: a school of thought which focuses on recognizing the interconnections between the parts of a system and synthesizing them into a unified view of the whole.

Table Function: see Graphical Function Diagram.

Templates: a tool used for quickly identifying systems archetypes by “filling in the blanks” in causal loop diagrams.

Tragedy of the Commons: (a systems archetype). In a “Tragedy of the Commons” scenario, a shared resource becomes overburdened as each person uses more and more of it for individual gain. Eventually, the resource dwindles or is wiped out, resulting in lower gains for everyone involved. Example: the depletion of fish stock due to over-fishing.

The above glossary is a compilation of definitions from many sources, including Innovation Associates’ Systems Thinking: A Business Perspective course book, Gould-Kreutzer Associates’ Introduction to Systems Thinking course book, The Fifth Discipline by Peter Senge, High Performance Systems’ Academic User’s Guide to STELLA, and The American Heritage and Random House Dictionaries.

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The “Limits to Success” archetype shows that being successful can be just as dangerous to longterm health as being unsuccessful (see “When the ‘Best of Times’ Becomes the ‘Worst of Times,’” Dec. 1990/Jan. 1991). Even success can sow the seeds of failure by stressing and overburdening the current system. Success can also trap us in a mentality of “what worked in the past will continue to work in the future.”

The heart of a good planning process is really in understanding the implications of achieving one’s strategies for success. When used in a planning process, the “Limits to Success” archetype can help show how actions, whether intentional or unintentional, may end up reinforcing themselves and taking on a life of their own. It can also assist in the search for organizational barriers that growth may begin to engage.

Below is a seven-step process for using “Limits to Success” to help identify your engines of success and how they may trigger a process that can potentially lead to failure. By mapping out these structures in advance, you can anticipate future problems and eliminate them before they become a threat.

1. Identify the Growth Engines

GROWTH ENGINE

Identifying the “engines” we commonly use to drive growth—such as marketing—can reveal our implicit assumptions about what we believe increases sales (R1).

The first step in using the “Limits to Success” archetype is to identify the growth engines. Although the growth in “Limits to Success” is usually described with a single reinforcing loop, this loop can represent any number of reinforcing processes that fuel the initial success. Start by drawing one loop and then identify additional reinforcing loops that are relevant.

In this process, it is important to focus on dynamic behavior; that is, identify growth loops, not just growth factors. This will help emphasize the process that is feeding back and regenerating itself. Oftentimes this reinforcing process is linked to our own mental models, leading us to continue taking actions in a particular direction. For example, a laser printer manufacturer may have found that marketing efforts have a strong effect on sales, so they always resort to marketing to boost revenues (see “Growth Engine”). Implicit in that loop is a strong bias toward using marketing to address revenue problems.

2. Determine Doubling Time

The next question to ask is: what is the projected time for our results to double in magnitude? That is, if marketing efforts continue (at a certain percentage of sales, for example), how long will it take for laser printer sales to double? Asking questions about doubling time will help make time horizons associated with the rapid growth explicit, especially where new products or markets are involved. If it is a more established product, finding the time it takes to increase sales by 25% or 50% (or to produce another result) would be more appropriate. The key is to pick an outcome which, if achieved, would outstrip your current capacity.

3. Identify Potential Limits and Balancing Loop(s)

At this point, it may help to categorize the limits in order to explore the many possible side-effects of success (see “Planning for Limits”). If sales double (or increase by 25% or 50%), for example, what sort of limits would we encounter? Some possible categories:

• Physical Capacity—If we double sales, will we need to build a new plant or make capital equipment investments?
• Information Systems—Are current information systems capable of handling twice the current activity?
• Personnel—Will we have enough people to handle double the workload? If not, do we have a plan for hiring and training new people?
• Management Expertise—Will we outstrip our capabilities as an organization to manage the demands such growth will pose?
• Attitudes/Mental Models—Will our actions meet a limit that is imposed more from a worldview than from any physical capacity (i.e., will we run up against sacred cows)?

These categories extend from the most tangible to the least tangible. While capital equipment needs are relatively easy to assess, necessary management expertise and the required shift in mental models may be more difficult to identify.

PLANNING FOR LIMITS

Drawing possible balancing loops helps to begin identifying potential limits in advance. Categorizing the limit can help determine the appropriate course of action for removing it. The categories can also serve as guideposts for what to look for as you begin to grow, while helping you anticipate how quickly you can respond to the potential limits.

In the case of the laser printer manufacturer, doubling the sales of a high-end laser printer with advanced features may mean greater demand for technical assistance. If the company is not prepared for this increase in volume, it could limit future sales growth as customers receive poor technical assistance and look for a supplier with better service (see “Capacity Limits” on p. 8).

CAPACITY LIMITS

A large increase in sales of a product may require more technical assistance for customers. If we are not prepared to make the required investments of time and money to remove that limit, it could hurt future sales (B2).

4. Determine Required Change

The next step is to assess what changes are required to deal effectively with the limit(s) identified. In terms of personnel, for example, technical assistance needs could be assessed by exploring questions such as: If sales double, will we get more sophisticated users, or less? How reliable is the product compared to previous ones? We can then begin to estimate how many people will be needed and what training is required in order to maintain (or improve) the current level of service.

5. Assess Time Needed to Change

If sales can double in six months, and you’ve determined that you need to add 20 to 30 new technical support people, what is the actual time frame in which you can accomplish that while still maintaining the desired level of quality? You may find it will take a full year to hire and train the necessary people. If there is a discrepancy between the doubling time (six months) and personnel expansions (one year), you may run into a “Limits to Success.” If you are able to identify the time needed in advance, however, you can plan for those needs and avoid a “Limits to Success” trap.

6. Balance the Growth

Once we have determined both the engines of growth and the potential limits, we need to consider how to balance the two processes. One way is to ask questions such as: Are we capable of investing enough in the capacity that is required to sustain the growth? If not, will we choose to somehow balance the growth ourselves, or are we going to let the forces of growth choose for us? Look for links between the reinforcing and balancing loops that will enable you to manage the balance between the two, rather than just react to changes. If the laser printer company discovers they cannot hire technical assistance fast enough to meet the demand, they can choose to balance sales growth with the capacity to service that growth. A link between quality of technical support and marketing budget may be appropriate.

7. Reevaluate the Growth Strategy

Even if a strategy is highly successful, we should always be open to questioning whether or not we should continue pursuing it. Reinforcing processes have their own momentum that can propel us toward continually pushing on the engines of growth. Reevaluating the growth engines and viewing the plan in a broader context of overall company strategy can curb our propensity to pursue undifferentiated growth.

There’s an old saying that goes, “Be careful what you wish for; you just might get it.” Unfortunately, getting what you wish may not give you exactly what you want over the long term. Companies can become so focused on preventing failure that they neglect planning adequately for dealing with success. The “Limits to Success” archetype can, however, help us ask the right questions to sustain our hard-earned success rather than be limited by it.

Daniel H. Kim is co-founder of Pegasus Communications, founding publisher of The Systems Thinker newsletter, and a consultant, facilitator, teacher, and public speaker committed to helping problem-solving organizations transform into learning organizations.

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