Systems Archetypes - Intervention PDF

T O O L B O X R E P R I N T S E R I E S
SYSTEMS
ARCHETYPES I

Diagnosing Systemic Issues and
Designing High-Leverage Interventions
2 BY DANIEL H. KIM
T H E T O O L B O X R E P R I N T S E R I E S
Systems Archetypes I: Diagnosing Systemic Issues and Designing High-Leverage Interventions
Systems Archetypes II: Using Systems Archetypes to Take Effective Action
Systems Archetypes III: Understanding Patterns of Behavior and Delay
Systems Thinking Tools: A User’s Reference Guide
The “Thinking” in Systems Thinking: Seven Essential Skills

by Daniel H. Kim
© 1992, 2000 by Pegasus Communications, Inc.
First printing August 1992.
All rights reserved. No part of this book may be reproduced or transmitted in any form or by any
means, electronic or mechanical, including photocopying and recording, or by any information
storage or retrieval system, without written permission from the publisher.
Acquiring editor: Kellie Wardman O’Reilly
Consulting editor: Ginny Wiley
Project editor: Lauren Keller Johnson
Production: Nancy Daugherty
ISBN 1-883823-00-5
PEGASUS COMMUNICATIONS, INC.

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2008
2
T A B L E O F C O N T E N T S
Introduction 2
A Palette of Systems Thinking Tools 4
Systems Archetypes at a Glance 6
Organizational Addictions: Breaking the Habit 8
Balancing Loops with Delays: Teeter-Tottering on Seesaws 10
“Drifting Goals”: The “Boiled Frog” Syndrome 12
“Escalation”: The Dynamics of Insecurity 14
“Fixes That Fail”: Oiling the Squeaky Wheel—Again and Again 16
“Growth and Underinvestment”: Is Your Company Playing with
a Wooden Racket? 18
“Limits to Success”: When the “Best of Times” Becomes the
“Worst of Times” 20
“Shifting the Burden”: The “Helen Keller” Loops 22
“Success to the Successful”: Self-Fulfilling Prophecies 24
“Tragedy of the Commons”: All for One and None for All 26
Index to The Systems Thinker 28
About the Toolbox Reprint Series 28
Pegasus Publications 29
3
I N T R O D U C T I O N
The significant problems we face cannot be solved at the same level of thinking
we were at when we created them.”
—Albert Einstein
e live in the world of events. Things happen and we respond—a machine

W breaks down, we buy a new machine; sales drop, we launch an ad cam-
paign; profits fall, we lay off workers. Each event creates another event, in an end-
less stream of cause-and-effect relationships. At this level of understanding, all we
can do is react to things that are happening to us.
If we begin to see the world as patterns of behavior over time, we can anticipate
problems (patterns of machine breakdowns, cycles of sales slumps, periodic profit
squeezes) and accommodate them (schedule maintenance work, institutionalize ad
cycles, sharpen cost-cutting skills). Managing at this level allows us to anticipate
trends and accommodate them. At this level, we are still responding to events, but
in a more proactive manner.
If we go deeper to the level of systemic structure, however, we can begin to see
what creates the behaviors we observe, and then take actions to change the struc-
tures. This allows us to alter the source of a problem rather than just deal with the
symptoms. The power of systems thinking comes from this focus on the level of
systemic structure, where the greatest leverage lies for solving problems. The sys-
tems approach can help shed light on current problems by helping us reframe
them from a fundamentally different perspective.
Systems thinking offers a range of tools for gaining deeper insight into prob-
lems—from simple pen-and-paper tools such as causal loop diagrams to more
complex tools such as computer simulation models and designed learning environ-
ments (see “A Palette of Systems Thinking Tools” on page 4). Systems archetypes
are one class of tools that capture the “common stories” in systems thinking—
dynamic phenomena that occur repeatedly in diverse settings. They are powerful
tools for diagnosing problems and identifying high-leverage interventions that will
create fundamental change.
HOW TO USE THE ARCHETYPES
The archetypes can be used as templates for diagnosing vexing long-term

problems. “Systems Archetypes at a Glance” on page 6 gives you a quick
overview of all the archetypes (except “Balancing Loops with Delays”). Levels of Understanding
This will provide you with the archetype “templates” that you can use to
increasing leverage
identify similar dynamics occurring in your own organization. Often, an systemic structure
event that is seen as a problem symptom can be the starting point. This
may lead you to trace out the pattern of behavior of similar events over a patterns of behavior
period of time. The archetype can then help you identify the systemic struc-
tures that are responsible. High-leverage interventions often become clear
events
once the appropriate archetype is identified.
2 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

This reprint series, compiled from the Toolbox column of THE SYSTEMS
THINKER™ newsletter, is designed to help you better understand and apply the
systems archetypes to your own business issues. Each two-page description leads
you through an archetype and outlines how you can use it to better understand
your own issues. On page 28 is an index listing the volume and issue numbers of
the newsletter in which each archetype first appeared. If you wish to explore the
archetypes in more depth, the original issue also contains either a Systems Sleuth or
a Systems Thinking in Action column that shows the featured tool being applied to a
real business problem. The archetypes in this booklet are organized in alphabetical
order for easy reference. Feel free to use this booklet in any way that will be most
helpful for gaining insight into a problem that you face. As with any new tool, the
only way to get value out of it is to start using it, and the best way to improve is to
use it often. . . .
Daniel H. Kim
Waltham, MA
P.S. We’d like to hear of your experiences as you apply the archetypes to your
own business issues. Fax us at (781) 894-7175 or send a note to Pegasus
Communications, One Moody Street, Waltham, MA 02453-5339.
ACKNOWLEDGMENTS
The systems archetypes included in this series have been developed over the years
through the efforts of many system dynamics, including Peter Senge, Michael
Goodman and Jennifer Kemeny of Innovation Associates, as well as John Sterman,
Ernst Diehl, and Christian Kampmann of the MIT System Dynamics Group. The
use of the term “archetype” was first coined by Peter Senge in The Fifth Discipline:
The Art and Practice of the Learning Organization (Doubleday, 1990). The Toolbox
Reprint Series: Systems Archetypes was compiled and edited by Kellie Wardman
O’Reilly. Colleen P. Lannon provided editorial support for the original articles.
THE LANGUAGE OF LINKS AND LOOPS
BALANCING LOOP THE LANGUAGE OF

EXAMPLE A C C U M U L AT O R S
s A causal link between two variables,

where a change in X causes a change
“clouds” represent the
in Y in the same direction, or where X

Desired s Desired + boundaries of what we want to
adds to Y.
+ Level o Level –
Gap Gap include in the diagram
s +
o A causal link between two variables,
_ where a change in X causes a change
Actual B Adjust- Actual B Adjust- flow regulator
Level ments Level ments
in Y in the opposite direction, or where

accumulator
X subtracts from Y.
s +
Delay
R A “reinforcing” feedback loop that

If there is a gap between the desired level
amplifies change.
population
and the actual level, adjustments are made

B A “balancing” feedback loop that seeks
births deaths
until the actual equals the desired level. The
equilibrium. starting variable is grey.
connector to indicate
causal connection
flow pipe
P E G A S U S C O M M U N I C AT I O N S , I N C . W W W. P E G A S U S C O M . C O M SYSTEMS ARCHETYPES I 3
T O O L B O X
A PA L E T T E O F S Y S T E M S T H I N K I N G T O O L S
here is a full array of systems factors, which can in turn have sub sub- the appropriate archetype. They serve
T thinking tools that you can think factors. Many layers of nesting, how- as a starting point from which one can
of in the same way as a painter views ever, may be a sign that one of the build a clearer articulation of a business
colors—many shades can be created sub-factors should be turned into a story or issue. Specific archetypes
out of three primary colors, but having major factor. include: “Drifting Goals,” “Shifting the
a full range of ready-made colors Burden,” “Limits to Success,” “Success
makes painting much easier. DYNAMIC THINKING to the Successful,” “Fixes That Fail,”
There are at least 10 distinct types TOOLS “Tragedy of the Commons,” “Growth
of systems thinking tools (a full-page Behavior Over Time (BOT) Diagrams and Underinvestment,” and
summary diagram appears on the fac- are more than simple line projections— “Escalation” (see “Systems Archetypes
ing page). They fall under four broad they capture the dynamic relationships at a Glance,” p. 6).
categories: brainstorming tools, among variables. For example, say we
dynamic thinking tools, structural were trying to project the relationship STRUCTURAL THINKING
thinking tools, and computer-based between sales, inventory, and produc- TOOLS
tools. Although each of the tools is tion. If sales jump 20 percent, produc- Graphical Function Diagrams,
designed to stand alone, they also build tion cannot jump instantaneously to the Structure-Behavior Pairs, and Policy
upon one another and can be used in new sales number. In addition, inven- Structure Diagrams can be viewed as
combination to achieve deeper insights tory must drop below its previous level the building blocks for computer
into dynamic behavior. while production catches up with sales. models. Graphical Functions are use-
By sketching out the behavior of differ- ful for clarifying nonlinear relation-
BRAINSTORMING TOOLS ent variables on the same graph, we can ships between variables. They are
The Double-Q (QQ) Diagram is based gain a more explicit understanding of particularly helpful for quantifying
on what is commonly known as a fish- how these variables interrelate. the effects of variables that are diffi-
bone or cause-and-effect diagram. The Causal Loop Diagrams (CLDs) pro- cult to measure, such as morale or
Qs stand for qualitative and quantita- vide a useful way to represent dynamic time pressure. Structure-Behavior
tive, and the technique is designed to interrelationships. CLDs make explicit Pairs link a specific structure with its
help participants begin to see the one’s understanding of a system’s struc- corresponding behavior. Policy
whole system. During a structured ture, provide a visual representation to Structure Diagrams represent the pro-
brainstorming session with the QQ help communicate that understanding, cesses that drive policies. In a sense,
diagram, both sides of an issue remain and capture complex systems in a suc- when we use these tools we are mov-
equally visible and properly balanced, cinct form. CLDs can be combined ing from painting on canvas to sculpt-
avoiding a “top-heavy” perspective. with BOTs to form structure-behavior ing three-dimensional figures.
The diagram also provides a visual pairs, which provide a rich framework
map of the key factors involved. Once for describing complex dynamic phe- COMPUTER-BASED TOOLS
those factors are pinpointed, Behavior nomena. CLDs are the systems This class of tools, including computer
Over Time Diagrams and/or Causal thinker’s equivalent of the painter’s pri- models, management flight simulators,
Loop Diagrams can be used to explore mary colors. and learning laboratories, demands the
how they interact. System Archetypes is the name given highest level of technical proficiency to
A QQ diagram begins with a heavy to certain common dynamics that seem create. On the other hand, very little
horizontal arrow that points to the to recur in many different settings. advance training is required to use
issue being addressed. Major “hard” These archetypes, consisting of various them once they are developed. •
(quantitative) factors branch off along combinations of balancing and reinforc-
the top and “soft” (qualitative) factors ing loops, are the systems thinker’s Systems Thinking Tools: A User’s Reference Guide,
part of the Toolbox Reprint Series, is organized around
run along the bottom. Arrows leading “paint-by-numbers” set—users can take this palette of systems thinking tools.
off of the major factors represent sub- real-world examples and fit them into

DYNAMIC THINKING TOOLS STRUCTURAL THINKING TOOLS COMPUTER-BASED TOOLS
Behavior Over Time Diagram Graphical Function Diagram Computer Model
f(x)
A
B
Time x
Can be used to graph the behavior of Captures the way in which one variable Lets you translate all relationships
variables over time and gain insights into affects another, by plotting the relation- identified as relevant into mathematical
any interrelationships between them. ship between the two over the full range equations. You can then run policy
(BOT diagrams are also known as of relevant values. analyses through multiple simulations.
reference mode diagrams.)
Causal Loop Diagram Structure-Behavior Pair Management Flight Simulator
COCKPIT
s B DECISION INFO
o STOCK
HIRING
STOCK
R C
B HIRING
s
A
s Time
Provides “flight training” for managers

Used in conjunction with behavior over Consists of the basic dynamic structures
through the use of interactive computer
time diagrams, can help you identify that can serve as building blocks for
games based on a computer model. Users
reinforcing (R) and balancing (B) developing computer models (for exam-
can recognize long-term consequences of
processes. ple, exponential growth, delays, smooths,
decisions by formulating strategies and
S-shaped growth, oscillations, and so on).
making decisions based on those strategies.
Systems Archetype Policy Structure Diagram Learning Laboratory
Reflection
Experimentation
Helps you recognize common system A conceptual map of the decision-making A manager’s practice field. Is equivalent
behavior patterns such as “Drifting process embedded in the organization. to a sports team’s experience, which
Goals,” “Shifting the Burden,” “Limits to Focuses on the factors that are weighed blends active experimentation with
Growth,” “Fixes That Fail,” and so on— for each decision, and can be used to reflection and discussion. Uses all the
all the compelling, recurring “stories” of build a library of generic structures. systems thinking tools, from behavior
organizational dynamics. over time diagrams to MFSs.
T O O L B O X
S Y S T E M S A R C H E T Y P E S AT A G L A N C E
ARCHETYPE DESCRIPTION GUIDELINES
Drifting Goals • Drifting performance figures are usu-

In a “Drifting Goals” archetype, a gap
ally indicators that the “Drifting Goals”
o between the goal and current reality can
archetype is at work and that real cor-
Goal
Pressure to be resolved by taking corrective action
Lower Goal rective actions are not being taken.
B2 (B1) or lowering the goal (B2). The
s • A critical aspect of avoiding a potential
critical difference is that lowering the
s
Gap “Drifting Goals” scenario is to determine
o goal immediately closes the gap, whereas
what drives the setting of the goals.
s corrective actions usually take time. (See
B1
• Goals located outside the system will
Corrective
Toolbox, October 1990).
Actual
Action
be less susceptible to drifting goals
s lay pressures.
De
Escalation In the “Escalation” archetype, one To break and escalation structure, ask the
party (A) takes actions that are per- following questions:
ceived by the other as a threat. The • What is the relative measure that pits
other party (B) responds in a similar one party against the other and can
s A’s Result B’s Result s
s o manner, increasing the threat to A and you change it?
Activity
B1 Quality of A’s Position B2
Activity resulting in more threatening actions • What are the significant delays in the
by A Relative to B’s by B
s
by A. The reinforcing loop is traced system that may distort the true nature
s
Threat
o s
Threat out by following the outline of the fig- of the threat?
to A to B
ure-8 produced by the two balancing • What are the deep-rooted assumptions
loops. (See Toolbox, November 1991.) that lie beneath the actions taken in
response to the threat?
Fixes That Fail In a “Fixes That Fail” situation, a • Breaking a “Fixes that Fail” cycle usu-
problem symptom cries out for resolu- ally requires acknowledging that the
s
tion. A solution is quickly imple- fix is merely alleviating a symptom,
Problem
Fix
mented that alleviates the symptom and making a commitment to solve
Symptom B1
(B1), but the unintended consequences the real problem now.
o
s of the “fix” exacerbate the problem • A two-pronged attack of applying
De (R1). Over time (right), the problem solution will help ensure that you
R2 lay
Unintended symptom returns to its previous level don’t get caught in a perpetual cycle of
Consequence s
or becomes worse. (See Toolbox, solving yesterdays “solutions.”
November 1990).
Growth and Underinvestment In a “Growth and Underinvestment” • Dig into the assumptions which drive
s s archetype, growth approaches a limit capacity investment decisions. If past
Growth
Demand
that can be eliminated or pushed into performance dominates as a consider-
Effort R1 B2
s
the future if capacity investments are ation, try to balance that perspective
Performance
o Standard made. Instead, performance standards with a fresh look at demand and the
Performance
s
o s are lowered to justify underinvestment, factors that drive its growth.
Capacity B3 Perceived Need leading to lower performance which • If there is potential for growth, build
to Invest
s De further justifies underinvestment. capacity in anticipation of future
lay lay
De
Investment s (See Toolbox, June/July 1992.) demand.
in Capacity

ARCHETYPE DESCRIPTION GUIDELINES
In a “Limits of Success” scenario, contin- • The archetype is most helpful when it
Limits to Success
ued efforts initially lead to improved is used well in advance of any prob-
performance. Over time, however, the lems, to see how the cumulative
system encounters a limit which causes effects of continued success might
Constraint the performance to slow down or even lead to future problems.
s o s decline (B1), even as efforts continue to • Use the archetype to explore questions
Limiting rise. (See Toolbox, December such as What kinds of pressures are
Efforts R1 Performance B2 Action 1990/January 1991). building up in the organization as a
s s result of the growth?
• Look for ways to relieve pressures or
remove limits before an organizational
gasket blows.
Shifting the Burden/Addiction In a “Shifting the Burden,” a problem is • Problem symptoms are usually easier
“solved” by applying a symptomatic than the other elements of the structure.
External solution (B1) which diverts attention • If the side-effect has become the prob-
Intervention s away from more fundamental solutions lem, you may be dealing with an
B1 (R1). (See Toolbox, September 1990). In “Addiction” structure.
s an “Addiction” structure, a “Shifting • Whether a solution is “symptomatic” or
o Problem Dependence
Symptom R3 on External the Burden” degrades into an addictive “fundamental” often depends on one‘s
o
Intervention pattern in which the side-effect gets so perspective. Explore the problem from
Dela
y B2 entrenched that it overwhelms the orig- differing perspective in order to come to
s
Internal inal problem symptom. (See Toolbox, a more comprehensive understanding of
Solution o April 1992.) what the fundamental solution may be.
Success to the Successful In a “Success to the Successful” • Look for reasons why the system was
archetype, if one person or group (A) is set up to create just one “winner.”
given more resources, it has a higher • Chop off one half of the archetype by
likelihood of succeeding than B focusing efforts and resources on one
Success s o Success
of A of B (assuming they are equally capable). group, rather than creating a “winner-
s Allocation to A s The initial success justifies devoting take-all” competition.
R1 Instead of B
R2
more resources, its success diminishes, • Find ways to make teams collaborators
Resources Resources rather than competitors.
to A
s o to B
further justifying more resource alloca-
tions to A (R2). See Toolbox, March • Identify goals or objectives that define
1992.) success at a level higher than the indi-
vidual players A and B.
Tragedy of the Commons In “Tragedy of the Commons” struc- • Effective solutions for“Tragedy of the
s
Net Gains
for A s ture, each person pursues actions Commons” scenario never lie at the
which are individually beneficial (R1 individual level.
R1 B5
and R2). If the amount of activity • Ask questions such as: “What are the
s A’s o grows too large for the system to sup- incentives for individuals to persist in
Activity
s
Resource
Limit
port, however, the “commons” their actions?” “Can the long-term col-
R3
Total Gain per becomes experiences diminishing ben- lective loss be made more real and
Individual
y
Activity
la
o s
efits (B1 and B2). (See Toolbox, August immediate to the individual actors?”
De
Activity
s R4
B’s
1991.) • Find ways to reconcile short-term
s Activity o cumulative consequences. A governing
R2
R2 B6
body that is chartered with the sustain-
ability of the resources limit can help.
Net Gains s
for B
s
T O O L B O X
O R G A N I Z AT I O N A L A D D I C T I O N S :
BREAKING THE HABIT
t’s 6:00 A.M. on a Monday morn- ADDICTION tomatic solution has a long-term side
I ing. The alarm clock blares, For most of us, the word “addiction” effect that diverts attention away from
jolting you out of bed. You shuffle conjures up images of alcoholism and the more fundamental solution to the
down to the kitchen and grab a cup of drug abuse or more “acceptable” habits problem (see “Addiction”).
fresh coffee. A few gulps and . . . ahh. such as coffee drinking—dependencies What makes the “Addiction”
Your eyes start to open; the fog begins which are rooted in physical and neu- archetype special is the nature of the
to clear. rological processes. It is not usually side-effect. In an “Addiction” structure,
10:30 A.M.—time for the weekly viewed as a social or organizational a “Shifting the Burden” situation
staff meeting. “I gotta have something phenomena. But from a systemic per- degrades into an addictive pattern in
to keep me awake through this one,” spective, addiction is a very generic which the side-effect gets so entrenched
you think to yourself as you grab a cup structure that is quite prevalent in both that it overwhelms the original prob-
of coffee and head into the conference social and organizational settings. lem symptom—the addiction becomes
room. As a systemic structure, the “the problem.”
By 3:30 P.M. you start to feel that “Addiction” archetype is a special case With coffee drinking, the problem
mid-afternoon energy low, so you of “Shifting the Burden” (see “Shifting symptom usually is that you feel tired
head down toward the crowded coffee the Burden: The Helen Keller Loops,” (see “Caffeine Addiction”). When you
machine for another cup. “I really p. 21). “Shifting the Burden” usually drink a cup of coffee, the caffeine raises
gotta cut down on this stuff,” you starts with a problem symptom that your metabolism, stimulating the body
comment to the guy behind you in cries out for attention. The solution and making the mind more alert. But
line. He nods. “I’m a five-cup-a-day that is most obvious and easy to imple- in doing this, it forces your body to
guy,” he confesses. “I just can’t give it ment usually relieves the problem deplete its reserves of energy faster
up.” symptom very quickly. But the symp- than usual. When the effects of the caf-
feine wear off in a few hours, you have
A D D I C T I O N
even less energy than before. You feel
C A F F E I N E A D D I C T I O N
sluggish again and reach for another
cup of coffee to get a jump start. Over
time, your body begins to rely on the
External Use of
Intervention s Caffeine
caffeine at regular intervals in order to
o
regulate your energy and metabolism.
B1
B4
s O R G A N I Z AT I O N A L
s
o Problem Dependence ADDICTIONS
Symptom R3 on External s Energy Dependency
o Level R6
Intervention s on Caffeine
Dela to Stay Alert
In organizational settings, addiction
y B2 Dela
y
can take the form of a dependence on
s B5
Internal
certain policies, procedures, depart-
Solution o o ments, or individuals. The way we
Energy-Enhancing
The “Addiction” archetype is a special case

Activities o think about problems, or the policies
of “Shifting the Burden.” In both cases, a
that we pursue, can become addictions
problem symptom is “solved” by applying a Low energy can be counteracted by more when we use them without considera-
symptomatic solution (B1), but the solution sleep or exercise—but that takes time (B5). tion or choice, as an automatic knee-
has a side-effect which diverts attention A cup of coffee immediately restores
away from the fundamental solution (R3). energy (B4). But it also lease to a depen-
jerk response to a particular situation.
This side-effect—the dependence on an dence on caffeine to stay alert, which takes
external intervention—eventually overwhelms attention away from long-term energy-
HOOKED ON HEROICS
the original problem. booster (R6). A common yet very subtle example of

addiction in companies is “crisis man- are roadblocks to taking action in the need to explore what it is about the
agement”—fire-fighting. Most man- company: formalities and rules that organizational system that created the
agers say they abhor fire-fighting say “No, you can’t do this,” “You have crisis and left fire-fighting as the only
because it wreaks havoc on normal to do it this way,” or “We don’t have option.
work processes and makes it difficult the resources.” When there’s a crisis,
people are suddenly given tremendous I N N O VAT I O N
to focus on the long-term. Yet fire-
fighting is a way of life in most com- freedom and leeway and are allowed Is there such a thing as a benign or
panies. Its pervasiveness and to do what they couldn’t do before. innocuous addiction? One could argue
persistence are clues that maybe it is Once it’s over, there is tremendous that some addictions are worse than
part of an addictive structure. fanfare: The hero is rewarded or pro- others, and some may not be bad at all.
Suppose you have a new product- moted. Over time, the company The fundamental problem with any
development project that has fallen becomes addicted to continually creat- addictive behavior, however, is that it
behind schedule. The timing of its ing crises, pulling the organization can lead an organization to become
release is critical to its market success. through tremendous turmoil, and cre- very myopic. The addictive solution
In fact, the delays have reached crisis ating new heroes. becomes so ingrained that no other
proportions. You decide to make it a possibility seems necessary. Preventing
BREAKING THE corporate addictions requires the abil-
high-priority project and assign a “cri-
ADDICTION CYCLE ity to continually see choices in a fresh
sis manager” to do what it takes to get
that product out on time. This new To identify “Addiction” dynamics at way—to shun habitual responses.
manager suddenly has enormous flexi- work, use the “Shifting the Burden” The challenge for organizations is
bility in what he can do to get the archetype as a diagnostic to ask ques- to get all members to continually look
product out. When the product is tions such as: “What was the addiction at things with fresh eyes. That’s the
launched on time, he is touted as the responding to?” “Why did we feel a essence of discovery . . . and the
hero of the day. need to engage in this behavior or cre- essence of innovation. •
If we look at crisis management ate this institution in the first place?”
from the “Addiction” archetype, the and “What are the problem symptoms
symptomatic problem is the preva- that we were responding to?” H OOK E D ON H E R OI C S
lence of crises that occur in the com- “Addiction” structures can be
pany (see “Hooked on Heroics”). much more difficult to reverse than s
s Heroics
When a crisis occurs, someone prac- “Shifting the Burden” because they Rewards
tices great heroism and “saves the are more deeply ingrained. Just as you B7 s
can’t cure alcoholism by simply s
day.” The problem is solved and the R9
R11 Dependence
o
person receives praise for doing a fine removing the alcohol, you can’t Crises
Expediting on Heroics for
Sense of
o s
attempt a frontal assault on an organi- o
job. But what happens to the rest of R10 Accomplishment
Dela Attention to
the organization in the meantime? zational addiction because it is so y B8 System
Improvements
Oftentimes the solution causes a lot of rooted in what else is going on in the Improvement s
of Project s
disruptions that form the seeds of the company. Management
o
System
next problems and perpetuate the If your company is addicted to
Crisis can be solved either through short-term
crisis cycle. fire-fighting, declaring that there will
“heroics” (B7) or long-term improvements in
The insidious side-effect of crisis be no more heroics may be the worst
management is that over time, as crisis thing you can do. If heroics were the management systems (B8). “Crisis manage-
ment” tactics such as expediting projects not
only propagate more crises, but they also take
management becomes the operating only way your organization knew how
attention away from fundamental system
norm, managers begin to become to release the accumulated pressures
improvements (loops R9 and R10). Over time,
dependent on the use of heroics—the produced by ineffective processes, end-
need to have recognition and a feeling ing that practice may lead to an even- managers can become “hooked” on heroics to
give them a sense of accomplishment in an
otherwise disempowering situation (R11).
of accomplishment in an otherwise tual explosion or systemic breakdown.
paralyzing institution. Usually there To break the addictive pattern, you
T O O L B O X
B A L A N C I N G L O O P S W I T H D E L AY S :
T E E T E R - T O T T E R I N G O N S E E S AW S
ost of us have played on a see- The goal of a seesaw ride is to side of the seesaw, an increase in price
M saw at one time or another and always keep things in a state of imbal- provides a profit incentive for firms to
can recall the up-and-down motion as ance (it would be pretty boring to sit produce more. Of course, it takes time
the momentum shifted from one end on a perfectly balanced one). But the for firms to expand. The length of the
to the other. The more equal the goal in the marketplace is exactly the delay depends on how close they
weights of both people, the smoother opposite—to bring supply in balance already are to full capacity and how
the ride. At a very basic level, a free with demand. Unfortunately, the sup- quickly they can add new capacity to
market economy is a lot like a seesaw ply and demand balancing process produce more. Hiring new workers
with supply at one end and demand feels a lot more like a seesaw ride than may take only a few days, while
on the other end. Prices indicate the a smooth adjustment to a stable equi- obtaining additional capital equipment
imbalance between the two, like a nee- librium. As shown in “Supply and or factory floor space may take
dle positioned at the pivot point of the Demand,” the dynamics of this adjust- months or even years. While firms are
seesaw. ment process are produced by two bal- making supply adjustments, the gap
ancing loops that between supply and demand widens
S U P P LY A ND D E M A N D try to stabilize on a and price goes even higher. The
particular price. But higher price spurs companies to
Price the process is com- increase their production plans even
plicated by the pres- more.
Lo Hi ence of significant As supply eventually expands and
nd delays. catches up with demand, price begins
Dema
to fall. By this time, firms have over-
BALANCING expanded their production capacity
Supply S U P P LY A N D and supply overshoots demand, caus-
DEMAND ing price to fall. When the price falls
lay
o s De Tracing through low enough, the product becomes
the loops, you can more attractive again and demand
Supply B1 Price B2 Demand see that if demand picks up—starting the cycle all over again.
s o
rises, price tends to
lay go up (all else AIRPLANES ON SEESAWS
De
remaining the The supply-and-demand seesaw is
same), and as price played out in all but the most tightly
goes up, demand regulated markets. A good example of
tends to go down. If this balancing act was described in a
Demand
there is enough Forbes article titled “Fasten Seat Belts,
inventory or capac- Please” (April 2, 1990), about airplane
Supply ity in the system to leasing companies.
absorb the increased Leasing companies, which account
demand, prices may for roughly 20 percent of all commer-
Time not go up immedi- cial jet aircraft currently on order,
A free market economy is a lot like a seesaw with supply at one end ately. As demand enjoy enormous profits during booms
and demand on the other. The dynamics that result from trying to bal- outstrips supply, in air travel. One carrier alone once
ance supply and demand are produced by two balancing loops that try
to stabilize on a particular price. Due to presence of significant delays,
however, price will put in an order to lease 500 planes.
a cycle of overshoot and collapse occurs.
rise. Based on leasing and buying rates in
On the supply the industry, the total number of air-

planes was expected to increase by 50 more orders for airplanes. nature of the delays in the supply line.
percent between 1990 and 1995. But As the supply caught up to Whenever supply adjustments bring
in the meantime, air-traffic growth demand, however, the airplane lease the seesaw back down, airline leasing
slowed in the late 1980s. The leasing rates fell (the slowing of air-traffic companies face a potentially bumpy
companies, however, did not seem too growth accelerated this process). With landing.
worried. so many airplanes in the pipeline, the
According to the article, “Eight supply began to outstrip demand and SIMPLE AND COMPLEX
years of unbroken prosperity have drive lease rates down even further. The balancing loop with delay struc-
created the illusion that many cyclical This put a squeeze on profits and ture is at once simple and complex:
businesses aren’t cyclical any longer.” forced marginal firms out of business. simple, because it seems to be an
But, as one airline executive warned, Some orders were canceled; others innocuous single-loop structure that is
“This is a cyclical business. Always were renegotiated. easy to comprehend; complex because
has been, always will be. With a small All the pieces of the airline leasing the resulting behavior is neither simple
change in load factor, the airlines can industry seemed to be operating nor easily predictable. The delays in a
go from spilling cash to bleeding red within a seesaw structure. Although typical system are rarely consistent or
ink like the Mississippi River going the extended period of air-traffic well known in advance, and the cumu-
through the delta.” growth kept demand ahead of supply lative effects are usually beyond the
If you draw out a causal loop dia- for several years, it did not change the control of any one person or firm. •
gram of this industry, you see the same
supply-and-demand structure at work.
An increase in air-traffic growth A I R P L A N E L E A S I N G I N D U S T RY
fueled a strong demand for airplanes.

That in turn sparked an increase in Air Traffic
airplane lease rates as airlines scram- s Airplanes la
y Growth
bled for additional airplanes. The high for Lease De
Dela
y o s s
lease rates led to increased profits and Demand for
Airplane
a surge in airplane orders. Since air- Orders B4 Airplane B3 Airplanes
Lease Rate
planes take many months to build, the o
s
supply of leasable airplanes did not
Profits s
adjust right away, making lease rates
A causal loop diagram of the airplane leasing industry shows the same seesaw structure at
go even higher. This led to higher
work.
profits, which attracted more capital,
which was then plowed into even
T O O L B O X
“DRIFTING GOALS”:
THE “BOILED FROG” SYNDROME
t’s becoming an old story in the ing backlogs and delivery delays by usually take time.
I systems thinking field: If you just getting the product “out the In the frog’s case, the goal is a
drop a frog into a pot of boiling water, door.” desired body temperature. If the gap
he will immediately hop out and save Making adjustments to initial goals between this desired temperature and
himself. But, if you put him in a pot of is not inherently wrong. Sticking to the the water temperature is large, the
lukewarm water and slowly turn up original goal purely for its own sake is frog will immediately take a corrective
the heat, something different happens. as misdirected as changing the goal at action and jump out of the water. But,
The frog swims around contentedly every whim. But distinguishing if the temperature increases gradually,
for a while, even enjoying the balmy between legitimate goal adjustments the gap between his ideal temperature
water. As the temperature rises, how- and the “Drifting Goals” structure can and the water temperature widens
ever, he becomes more groggy and be very difficult—it is easy to rational- slowly. As this happens, the frog’s per-
lethargic until, finally, he dies. ize adjustments as “needed corrections.” ceived desired temperature may grad-
The frog may not have known it, ually drift higher. This closes the gap
but he was a victim of a drifting goals THE BOILED FROG between desired and actual tempera-
scenario. “Drifting Goals” is a struc- STRUCTURE ture, negating the need to take correc-
ture that leads to poorer and poorer The archetype works in the following tive action until it is too late.
performance and/or lower and lower manner (see “‘Drifting Goals’ The reason drifting goals is labeled
expectations (or in the frog’s case, Template” diagram). There is a cer- the “boiled frog” syndrome is that
higher and higher temperature). In a tain goal—implicit or explicit—which goals, like the frog’s ideal temperature,
company setting, this structure may is compared to the current state of tend to drift slowly and usually go un-
take the form of slipped delivery affairs. If a gap persists, corrective noticed. Similar to the frog that doesn’t
schedules, where a once-intolerable actions are taken to improve the cur- recognize a gradual rise in tempera-
eight-week delivery delay becomes the rent state and bring it in line with the ture, organizations are often un-
accepted goal; or lower quality stan- goal. This forms the basic balancing alarmed by deteriorating performance
dards, as everyone focuses on decreas- loop (B1) at the heart of any system if it occurs over a long period of time.
that strives for equilibrium. A delay
between corrective action and actual BUDGET DEFICITS,
“ D R I F T I N G G O A L S ” DRIFTING GOALS
T E M P L AT E state represents the fact that results
may take from minutes to years to The federal budget deficit is a good
materialize, depending on the specific example of the “Drifting Goals”
o
situation. archetype at work (see “Budget
Pressure to Of course, there is more than one Deficit”). If there is a gap between the
Goal B2 Lower Goal
way to close the gap. In the “Drifting previously stated acceptable deficit
s Goals” archetype, a second balancing level and the actual deficit, it can be
s Crises
o GAP loop is driven by pressure to lower the closed by either reducing government
s goal. As the gap increases (or persists spending (B3) or increasing tax rev-
Actual B1 Corrective over a period of time), the pressure to enues (B4). Bipartisan compromises,
Action lower the goal increases. If the pres- however, have usually resulted in
s
sure is high and persistent, the goal increased government spending,
y
Dela
may be lowered, thereby decreasing mixed results in terms of taxes, and,

In a “Drifting Goals” archetype, a gap the gap (loop B2). The critical differ- consequently, higher deficits. The ris-
between the goal and current reality can be
resolved by taking corrective action (B1) or
ence between the two loops is that ing deficits create an intolerable gap
lowering the goal (B2).
lowering the goal immediately closes between the actual and stated maxi-
the gap, whereas corrective actions mum acceptable deficit, generating

pressure to raise deficit targets, and the goal is continually being adjusted this gap leads to further quality
eventually resulting in higher maxi- upwards. Total Quality (TQ), Kaizen, improvements.
mum acceptable deficits (B5). and other continuous improvement A critical aspect of evaluating a
The Gramm-Rudman-Hollings efforts are examples of the “Drifting “Drifting Goals” scenario in an orga-
bill (GRH) was once seen as the Goals” structure being used in a posi- nization is to determine what drives
answer to a growing budget deficit in tive manner to drive goals higher. the setting of the goal(s). In the
the U.S. By making deficit reductions The “Quality Improvement” dia- “Quality Improvement” diagram, the
a law, it was intended to force biparti- gram provides a useful framework for Quality Goal can be affected by com-
san cooperation to eliminate deficit applying the “Drifting Goals” struc- petitors’ quality, by customers’ expec-
spending. If GRH target numbers are ture to other organizational issues. tations of quality, or by internal
not met, mandatory cuts go into effect, The lower loop (B7) represents pressures. The relative strength of
indiscriminately cutting billions of improvements, while the upper loop each potential influence will deter-
dollars from federal government pro- (B8) represents ever-present pressures mine whether the quality will drift up,
grams and services. The GRH targets to lower the goal. TQ works well, in down, or oscillate. Goals located out-
were meant to set a standard that lay part, due to the reinforcing loop (R9): side the system, like the original GRH
outside of the current deficit-reinforc- improvements in quality lead to targets, will be less susceptible to drift-
ing system—a standard that would higher customer expectations, raising ing goals pressures. •
not succumb to the internal pressures. the quality goal and increasing the
In an article in Barron’s magazine gap. In a company committed to TQ,
(“Rudman on Gramm-Rudman,” July
16, 1990), Senator Rudman reacted to
pressures to lower the goal by suggest-
ing that GRH targets may be changed
BUDGET DEFICIT QUALITY IMPROVEMENT
as “long as they are accompanied by a
major deficit reduction.” Rudman’s s
new proposal aimed to reintroduce Gramm-Rudman

GRH targets into the very drifting Target Deficit Competitors’
B6 Quality
goals archetype it was intended to
change (B6). s s s o
Maximum Pressure to Pressure to
Quality
USING THE ARCHETYPE Acceptable Raise Targets s s Goal
Lower Goal
Deficit B5 B8
Drifting performance figures usually s Customers’ s
Expectations
are a quick clue that this dynamic is o s
GAP of Quality Gap
s R9 o
occurring and that real corrective s
actions necessary to meet the targets o s
B3
Actual Government B7
are not being taken. It may also mean Deficit Spending s Actual Improvement
Quality Activities
current targets are being set more by o s ela
y
Taxation y
D s la
past levels of performance than by B4 De
some absolute standard (zero defects)
or by something outside of the system In a quality improvement scenario, the qual-
(customer requirements). Rudmanʼs proposal aimed to reintroduce ity goal can be affected by competitorsʼ qual-
GRH targets into the very drifting goals situa- ity, customersʼ expectations of quality, or
tion it was intended to change (B6). internal pressures.
The flipside is also true: a steady
pattern of improvement can mean that
T O O L B O X
“ E S C A L AT I O N ” :
THE DYNAMICS OF INSECURITY
ave you ever been caught in a THE DYNAMICS OF the brink of nuclear war.
H situation where you felt that INSECURITY The crisis began with the discovery
things were going well beyond what At the heart of an escalation dynamic of offensive nuclear weapons being
you intended, but you felt powerless to are two (or more) parties, each of constructed in Cuba—contrary to
stop it? As a child, perhaps, in the whom feels threatened by the actions of repeated public assurances by the
playground at school—a classmate the other (see “‘Escalation’ Archetype Soviet chairman. The U.S. called for
makes a snide comment, and you and Price Wars”). Each side attempts complete dismantling and withdrawal
counter with a sharp retort. The next to keep things under control by man- of the missiles. The Soviets first
round of insults gets uglier and louder. aging its own balancing process. denied the existence of any such mis-
You each stick your neck out further Actions taken by A, for example, siles. Then they acknowledged the
and further with every remark. improve A’s result relative to B. This missiles but refused to remove them,
Classmates gather around and egg on decreases A’s feeling of threat, so A claiming they were defensive.
the escalation of hostilities. Pretty eases off its activities (B1). B, on the Kennedy responded by ordering a
soon, you are so far out on a limb that other hand, now feels threatened by naval blockade around Cuba to pre-
there is little else left to do but suc- A’s relative advantage and increases its vent more missiles from being
cumb to the chanting that has begun activities in order to improve its result shipped. Tensions ran high. The
all around you—“Fight! Fight! Fight!” over A (B2). The interaction of the Soviets pressed for accelerated con-
two parties trying struction of the missiles already in
to unilaterally Cuba. The United States massed over
“ESCALATION” ARCHETYPE
A N D P R I C E W A R S maintain control 200,000 troops in Florida to prepare
produces a rein- for an invasion.
forcing spiral in When a United States U2 recon-
B’s Result s
s A’s Result which nobody feels naissance plane was shot down over
s o
in control. Cuba, Kennedy’s advisors unani-
Activity by A B1 Results of A B2 Activity by B In school, a few mously proposed launching a retalia-
Relative to B
harsh words can tory strike. But Kennedy stopped
s s
quickly lead to a short. “It isn’t the first step that con-
o s
Threat to A Threat to B playground brawl. cerns me,” he said, “but both sides
In a more deadly escalating to the fourth and fifth step.
U.S. Arms Soviet Arms confrontation, the And we won’t go to the sixth because
s Stock Pile Stock Piles there [will be] no one around to do
s o s escalation structure
can lead to catas- so.” Had Kennedy not broken the
U.S. Arms Soviet Arms
Nuclear escalation structure at that juncture,
Production B3 Superiority of B4 Production trophic conse-
U.S. over Soviets quences. The the forces unleashed might have been
s s
Cuban Missile beyond anyone’s control to stop.
Threat o s Threat to
to U.S. Soviets
Crisis in October
D E - E S C A L AT I O N
In the “Escalation” archetype (top), one party rakes actions that are
of 1962, for exam-
perceived by the other as a threat. The other party responds in a like
ple, caught U.S. The Cuban missile crisis was one inci-
manner, increasing the threat to the first party, resulting in more
president Kennedy dent in a larger dynamic—the Cold
threatening actions by the first party. The reinforcing loop is traced out and Soviet chair- War. Although that particular crisis
by following the outline of the figure-8 produced by the balancing man Khrushchev was resolved, it did nothing to defuse
loops. In the case of the U.S./ Soviet arms race (bottom), each coun- the mutual distrust between the two
try felt threatened by the arms stockpile of the other, leading to mas-
in an escalation
sive buildups in both countries.
structure that led countries, so the arms race continued.
their countries to The balance of power shifted over

time as each side built more arms in prices. But in the long term, everyone caught in an escalation dynamic,
response to a perceived threat from may lose, since depressed prices mean drawing out the archetype can help
the other. Yet, the very act of building less ability to invest in new product you gain some perspective. The fol-
arms to “balance” the situation only development, customer service, and lowing questions are useful for identi-
led to further threat, which strength- overall attractiveness for the next fying escalation structures. With
ened the other side’s “need” for even round of competition. advance knowledge, you can design
more arms. Reversing or stopping such price strategies around them or use them to
It takes two to have an arms race, wars is difficult. As competitors, A your advantage:
but only one to stop it. Unilateral and B cannot collude to set prices. Nor • Who are the parties whose
action can break the escalation is either company likely to stop unilat- actions are perceived as threats?
dynamic by robbing it of its legiti- erally, since in the absence of other • What is being threatened, and
macy. If one side stops building arms, distinguishing features, the market what is the source of that threat?
the source of threat diminishes, giving usually favors the product with the • What is the relative measure that
the other side less reason to invest in lower price. In the heat of battle, a pits one party against the other—and
more arms. The escalation can then company can easily get locked into one can you change it?
run in reverse. A later newspaper competitive variable, such as price, • What are the significant delays
headline, “Gorbachev escalates arms and neglect to emphasize other in the system that may distort the true
cuts,” showed how the arms race was strengths. Texas Instruments learned nature of the threat?
then being driven rapidly in reverse. that lesson the hard way. Even though • Can you identify a larger goal
Texas Instruments had a superior that will encompass the individual
WARS ON MANY FRONTS technical product, it had to write off goals?
Escalation dynamics, because they its entire personal computer business • What are the deep-rooted
thrive in a competitive environment, (the TI99/4A) as a result of a vicious assumptions that lie beneath the
are pervasive in business. The common price war with Commodore. actions taken in response to the
logic is that whenever your competitor threat? •
gains, you lose (and vice-versa). That INSECURITY
logic leads to all kinds of “wars”— As the term “threat” suggests, the
through pricing, advertising, rebates escalation archetype is
and promotions, salary and benefits, about insecurity. In our
PRICE WARS
labor and management, divisions, mar- playground example, the
keting vs. manufacturing departments, name-calling threatens
and so on. our reputation and makes s A’s Sales B’s Sales s
s o
At the core of each of these wars is us insecure about our
a set of relative measures that pits one identity. The Cuban Price Cuts Market Share Price Cuts
B5 B6 by B
group against another in a zero-sum Missile Crisis and the by A of Company A
Relative to B
game. In a typical price war, for exam- arms race threatened the s s
Competitive Competitive
ple, company A wants to “buy” mar- national security of both o s
Threat to A Threat to B
ket share by cutting its price (see adversaries. Engaging in a
In a price war, company A slashes its price in order to gain
“Price Wars”). As A’s sales and market price war reveals each
share increase, B’s market share company’s insecurity market share (B5). This poses a threat to company B, who
about its ability to hold on then retaliates by cutting its price (B6). The result is a zero-
sum game for all involved: companies will have less revenue
decreases. B retaliates by slashing its
to invest in new products and customer service, and cus-
prices, generating more sales for B at to customers on a basis
tomers will ultimately feel the effects of those cutbacks.
the expense of A’s sales. In the short other than price.
run, consumers may benefit from low If you find yourself
T O O L B O X
“ F I X E S T H AT FA I L ” : O I L I N G T H E
SQUEAKY WHEEL—AGAIN AND AGAIN...
ow many times have you heard have encased the wheels in rust. quence of repeatedly applying the
H the saying, “The squeaky wheel solution.
gets the oil”? Most people agree that BETTER BEFORE WORSE In the case of the squeaky wheel,
whoever or whatever makes the most In our search for a quick fix, we often the noise attracts our attention and we
“noise” grabs our attention and will rush into “solutions” without taking grab the nearest (easiest, most avail-
presumably be attended to first. The the time to understand the full impact able, previously used, organizationally
problem with following this adage is of our actions. One of the tricky things accepted, etc.) “fix” we can get our
that it leads to operating in a reactive about systems is that they usually hands on and apply it. In the short
mode, continually “fighting fires” point our attention toward short-term term, even water will act as a lubricant
rather than making fundamental fixes and away from fundamental and stop the squeaking. If we do not
improvements. solutions. know anything about oxidation, we
To make matters worse, in our In a typical “Fixes That Fail” situ- might assume that the water did, in
haste to grab the “oil,” we often mis- ation (see “‘Fixes That Fail’ fact, solve the squeaking problem. As
takenly pick up a can of water and Template”), a problem symptom cries the water evaporates and the metal
splash it on the squeaky wheel. The out (squeaks) for resolution. A solu- oxidizes, however, the wheel begins to
squeaking stops momentarily, only to tion is quickly implemented that alle- squeak again. So we reach for the
return more loudly as the air and water viates the symptom (B1). The relief is water again, since it worked the last
join forces to rust the joint. We can stay usually temporary, however, and the time.
very busy running about splashing symptom returns, often worse than Of course we all know that oil or
water on all the squeaky wheels. But before. This happens because there are grease, not water, should be used to
when there are finally no more unintended consequences of the solu- lubricate a squeaky wheel. But sup-
squeaks, we may discover that instead tion that unfold over a long period of pose the squeaky wheel is a customer
of having fixed all the problems, we time (R2) or as an accumulated conse- screaming for a product that is two
weeks late. How do we know whether
we are applying the oil or the water
“FIXES T H AT FAIL” T E M P L AT E
when we respond? Do we understand
enough about this situation’s “chemi-
“Fix” Applied
cal reaction” to take appropriate
s actions? Or, in our frenzy of fighting
Problem Symptom
Problem
fires and oiling squeaky wheels, are
Symptom B1 Fix we throwing oil on fires and applying
water to the wheels?
s o
De
lay EXPEDITING CUSTOMER
R2
ORDERS
Unintended s
Consequence Expediting customer orders, a com-
Time
mon practice in many manufacturing
firms, illustrates the “Fixes That Fail”
In a typical “Fixes That Fail” situation, a problem symptom cries out for resolution. A solution is
quickly implemented that alleviates the symptom (B1), but the unintended consequences of the
archetype. A large semiconductor
“fix” exacerbate the problem (R2). Over time (right), the problem symptom returns to its previ-
manufacturer, for example, is experi-
ous level or becomes worse (dotted line).
encing some production problems and
is running behind schedule on some

shipments. They know if their cus- development project is in danger of tive effects. If the long-term/short-
tomers do not receive their orders on missing its release date, resources are term trade-off were indeed one- for-
time, the customers literally will have often diverted from other projects to one, where solving one problem today
to shut down their production lines give it a final “push.” The product is would create another one tomorrow,
until they receive the chips. So what released, but at a much higher cost. this strategy might be tolerable. But
happens? And as a result of all the shifting the reinforcing nature of unintended
Company A calls and demands around, all the other neglected pro- consequences ensures that tomorrow’s
that its chips be delivered immedi- jects are more likely to need the same problems will multiply faster than
ately. The semiconductor company extra “push” in order to be finished on today’s solutions.
responds by assigning an expediter to time. Breaking the “Fixes That Fail”
track down A’s order and push it In both the semiconductor com- cycle usually requires two actions:
through the line (see “Expediting pany and the electronics company, the acknowledging up front that the fix is
Customer Orders”). Of course it’s not quickest solution was to attend to each merely alleviating a symptom, and
simply a matter of finding one item crisis as it happened. The specific making a commitment to solve the
and escorting it to the loading docks. problems were resolved, but at a high real problem now. Launching a two-
The company produces over a hun- price— a guarantee of more problems pronged attack of applying the fix and
dred different kinds of integrated cir- in the future. planning out the fundamental solution
cuits, and Company A has many will help ensure that you don’t get
different types on order. What’s worse, USING THE ARCHETYPE caught in a perpetual cycle of solving
the production steps from silicon In most instances of “Fixes That Fail,” yesterday’s “solutions.” •
wafers to final packaged circuits can people are usually aware of the nega-
number 50 or more. Finding and tive consequences of applying a quick
expediting A’s order may mean wad- fix. But the pain of not doing some-
ing through the entire factory and thing right away is often more real
causing disruptions throughout the and immediate than the delayed nega-
production line. Finally Company A’s
order is rushed through, resulting in a
satisfied customer (B3).
But no sooner has A’s order left the EXPEDITING CUSTOMER ORDERS
warehouse when company B calls
demanding to receive its orders imme-
diately—and the process begins all s
Dissatisfied Expedite
over again. At the same time, some- Customers w/
Dissatisfied Customers
B3 Expedite
body else is expediting for company C. Late Orders Orders
The squeaky wheels are getting oiled, s o
Orders De
but the number of squeaking wheels is Delivered s la
y
rapidly increasing. As a result, the s
production line is continually being R4 Production-Line
Missed
disrupted—leading to more missed Delivery Dates Disruptions
delivery dates and more customer calls s
(R4). Time
NEW PRODUCT RELEASES Expediting a late order ensures that the order will be processed immediately, reducing the num-
ber of dissatisfied customers (B3). But the product line disruptions that can result will lead to
more missed delivery dates and, ultimately, more unhappy customers (R4).
Similarly, in a consumer electronics
company, when one new product-
T O O L B O X
“GROWTH AND UNDERINVESTMENT”:

I S Y O U R C O M PA N Y P L AY I N G W I T H A
WOODEN RACKET?
o you recall the first time you but then again you don’t know tim to this archetype. Without invest-
D picked up a tennis racket? whether you’ll like skiing. . . . ing in better equipment, your perfor-
Perhaps it was an old wooden racket mance will likely plateau—or even
you found in your garage, or one a GROWTH AND decline as you become frustrated and
friend had outgrown. You weren’t UNDERINVESTMENT spend less time practicing. The result
really sure you had it “in you” to The above scenario is an example of the then justifies your decision not to
play—you didn’t even know if you “Growth and Underinvestment” invest in a new racket.
would like the sport. But you tried archetype at work. At its core is a rein-
playing a couple of games a week with forcing loop that drives the growth of a L E G A C Y O F T H E PA S T
the beat-up racket, picking up some of performance indicator and a balancing Often in a “Growth and Underinvestment”
the basic moves and even sustaining a force which opposes that growth (R1 situation, ghosts of past failures
volley for a few rounds. After a month and B2 in “‘Growth and Under- remain as a systemic legacy, influenc-
or so, however, you couldn’t seem to investment’ Archetype”). An additional ing current decisions. A classic exam-
improve your play beyond a certain loop (B3) links performance to capacity ple is the story of a capital equipment
level. investments, and shows how deteriorat- manufacturer. The company’s CEO
If you were a little bit better, you ing performance can justify underin- had seen an industry downturn in
might have been willing to invest in a vesting in capacity needed to lift the which the company had been saddled
new high-performance racket. But limit to growth. This propensity to with too much capacity, so he was cau-
you decide that tennis is really not for underinvest in the face of growth tious about expanding. The company’s
you. Besides, another friend has just makes “Growth and Underinvestment” product was selling well, however, and
given you a pair of ski boots. They’re a a special case of the “Limits to Success” a backlog began to pile up—three
little beat up and a bit tight at the toes, archetype (see p. 20). months’ worth of orders, then four,
In the tennis then five. The CEO continued to
example, the rein- believe that it was just a temporary
“GROWTH AND UNDERINVESTMENT” forcing process is spurt. When the backlog grew to six
ARCHETYPE
practice, which months, he finally agreed to expand
improves perfor- production capacity.
s s
mance (R4 in It took about a year and a half for
Growth
R1 Demand B2 “Practice Makes the additional capacity to come on-
Effort
Perfect?”). line. In the meantime, demand trailed
Performance
s o Standard Improvement off as people found alternative sources.
Performance
s slows, however, as The company gradually worked off
o
s you reach the the backlog, and orders started to pick
Capacity B3 Perceived Need point at which the up again. After a couple of years they
to Invest
equipment limits were in a similar backlog, but the
s a y De
De
l l ay your ability (B5). If CEO was even more reluctant to
Investment s your decision to invest in new capacity because of what
in Capacity
purchase better appeared to be a continual cycle of
“Growth and Underinvestment” has at its core a “Limits to Success”
equipment is growing and falling demand.
archetype (R1 and B2). The additional loop (B3) shows how deterio- dependent on your The “Growth and Underinvest-
rating performance can justify underinvesting in the very capacity that
is needed to forestall the limit to growth.
past performance, ment” archetype reveals that the com-
you may fall vic- pany’s slow response may actually

have created the cyclical demand. The can also be true: The two balancing growth phase to determine what the
reinforcing action of marketing activi- loops can trace out a reinforcing loop limits may be, especially with respect
ties, coupled with the balancing action that continues to expand demand and to capacity. Studying the market
of delivery delays, trace out a “Limits performance. response and characteristics of your
to Success” archetype in which the target customers during an upswing
limit is production capacity (R7 and BREAKING THE CYCLE can help you anticipate future capacity
B8 in “Capacity Delays and Under- To determine whether a “Growth and needs.
investment”). As performance Underinvestment” structure is at Also make sure internal systems
declined relative to performance stan- work, start by looking for patterns of are set up to deal with growth: If you
dards, the perceived need to invest oscillations in customer demand. If you have an aggressive growth strategy but
increased, until investments were overlay that with capacity investments a sluggish internal system for respond-
finally made (B9). and find that they follow the same pat- ing to performance shortfalls, then you
Because of the delay in capacity tern, you’re probably in a “Growth and might have created a structural inabil-
coming on-line, however, delivery per- Underinvestment” situation. ity to handle continued growth.
formance continued to decline for a If a company waits until it receives Most important, explore the
while, hurting new orders. In the signals from the marketplace to invest assumptions driving your capacity
meantime, deliveries began to increase in capacity, it may be too late to pre- investment decisions. Past performance
and the company crawled out of back- vent some fall-off in demand that will may be a consideration, but it should
log. This led the CEO once again to result because of the delay between not dominate your decisions. Instead,
question the need to invest in capacity, investment decisions and capacity identify the marketplace factors that
making him even more conservative coming on-line. The key is to develop are driving growth. Otherwise you
the next time they were in a backlog a way of assessing capacity needs rela- may end up with investment decisions
situation. tive to demands before the perfor- that are too dependent on past experi-
mance indicator starts to suffer. ence and not enough on present (and
DOWNWARD SPIRAL Take some time early in the future) needs. •
If this dynamic continues through
many cycles, customers are not likely
to keep coming back. The result may
be a downward spiral of cutting back PRACTICE MAKES C A PA C I T Y D E L AY S
PERFECT? AND UNDERINVESTMENT
on investments: The two balancing
loops lock into a figure-8 dynamic in
which the effects of the reinforcing s s s o
loop no longer have much impact on Practice Customer
R4 Performance B5 Marketing R7 B8
growth, while the combined balancing Orders
Equipment s Performance
loops create a counter-reinforcing pro- s o Adequacy
of Equipment
Quality Standard s Delivery Standard
s o Delay
cess of continual cutbacks. As demand s s
Investment in
o
goes down, delivery performance goes New Equipment B6 s Capacity
B9 Perceived Need
Perceived Need to Invest
back up, creating less need for capacity s to Invest in Better s y De
lay Equipment ela lay
investments. If capacity dips below the De D
Capacity s
Investments
level needed to service incoming
orders, performance will go down Marketing efforts produce more customer
In any sport, practice improves performance orders (R7)—but increasing demand also
(R4). But performance is also affected by the causes a longer delivery delay (B8). As the
again, reducing demand even further.
adequacy of equipment (B5). If performance delay increases, the company realizes its
Perceived need to invest will decrease,
is not improving or actually decreases, the need for capacity investment. However,
so investments will drop, leading to
even less capacity over time (as older perceived need to invest in new equipment delays in implementation further lengthen the
also decreases, leading to underinvestment delivery delay (B9) and in the end, affect
which further affects performance (B6). future customer orders.
equipment depreciates or is taken off-
line). Thankfully, the reverse situation
T O O L B O X
“LIMITS TO SUCCESS”: WHEN THE “BEST OF

TIMES” BECOMES THE “WORST OF TIMES”
I t was the best of times, it was improvements. The “best of times” for new production capacity or explore
the worst of times, it was the investing in resource development new markets.
age of wisdom, it was the age of fool- always seems like the “worst of times”
ishness,” wrote Charles Dickens in A for actually carrying out such plans, DIETS AND WEIGHT LOSS
Tale of Two Cities. Life often seems and vice-versa. Examples abound where rapid success
full of such paradoxes. When we are is followed by a slowdown or decline
busy earning lots of money, we have THE STRUCTURE in results. Dieters usually find that los-
little time to enjoy it. When we do Recognizing this paradox can help ing the first 10 pounds is a lot easier
have time available, it seems we don’t individuals and companies avoid the than losing the last two, and losing
have much money to spend. A rapidly “Limits to Success” trap. In a typical weight the first time around is a lot
growing company finds itself too busy scenario (see “‘Limits to Success’ easier than losing it the next time.
to invest its profits in internal develop- Template”), a system’s performance On a diet, eating less leads to
ment, but when sales begin to slow, it continually improves as a direct result weight loss, which encourages the per-
no longer has the resources (money of certain efforts. As performance son to continue to eat less (R3 in
and people) to spend on needed increases, the efforts are redoubled, “Dieting Bind”). But, over time, the
leading to even further improvement body adjusts to the lower intake of
(R1). When the performance begins to food by lowering the rate at which it
“LIMITS TO SUCCESS” plateau, the natural reaction is to burns the calories. Eventually the
T E M P L AT E increase the same efforts that led to weight loss slows or even stops. The
past gains. But the harder one pushes, limit here is the body’s metabolic
the harder the system seems to push rate—how fast it will burn the food.
Constraint
back: It has reached some limit or To continue losing weight, the person
s o s resistance that is preventing further needs to increase the metabolic rate by
Efforts R1 Performance B2 Limiting improvements in the system (B2). The combining exercise with dieting.
Action
s s
real leverage in a “Limits to Success” But pushing equally hard on exer-
scenario doesn’t lie in pushing on the cising isn’t the full answer either, since
“engines of growth,” but in finding intense exercise burns simple sugars
Performance and eliminating the factor(s) that are and not the stored fat that is the real
Efforts
limiting success while you still have target for weight loss. Intense exercise
time and money to do so. is counterproductive towards the
In a rapidly growing company, for dieter’s goal because it increases
example, initial sales are spurred by a appetite while only temporarily raising
successful marketing program. As the metabolism. The real leverage is to
Time sales continue to grow, the company engage in steady exercise such as long,
redoubles its marketing efforts — and brisk walks that will increase the
In a “Limits to Success” scenario, continued
efforts initially lead to improved performance
sales rise even further. But after a metabolic rate to a permanently
(R1). Over time, however, the system
point, pushing harder on the market- higher level.
encounters a limit that causes the perfor-
ing has less and less effect on sales.
mance to slow down or even decline (B2). The company has hit some limit, such S E R V I C E C A PA C I T Y L I M I T
Once the system has hit a limit, performance
begins to level off (or “crash”), even as
as market saturation or production People Express airlines was one of the
efforts continue to rise (bottom).
capacity. To continue its upward path, best-known casualties of the “Limits
the company may need to invest in to Success” archetype. Its tremendous

growth was fueled by a rapid expan- vice-capacity problems. Similar to the to future problems. When the times
sion of its fleet and routes, along with dieter’s reliance on intense exercise, it are good and everything is growing
unheard-of low airfares. As its fleet only masked the real need for the rapidly, we tend to operate with an “if
capacity grew, People Express was steady long-term commitment to hire it ain’t broke, don’t fix it” attitude. By
able to carry more passengers and and train the necessary people to bring the time something breaks, however, it
boost revenues, allowing it to expand service quality up to a high and sus- may be too late to apply a fix.
fleet capacity even more (loop R5). tainable level. Using the “Limits to Success” tem-
The quality of its service was initially plate can help highlight potential
very good, so the positive experience USING THE ARCHETYPE problems by raising questions such as
of many fliers increased word-of- The “Limits to Success” archetype “What kind of pressures are building
mouth advertising and the number of should not be seen as a tool that’s in the organization as a result of our
passengers. applied only when something “stalls growth?” By tracing through their
The “engine of growth” at People out.” It is most helpful when it is used implications, you can then plan for
Express was its physical capacity— in advance to see how the cumulative ways to release those pressures before
expanding fleet size, employees, and effects of continued success might lead an organizational gasket blows. •
routes. But its “limit to success” was
service capacity—the ability to invest
time and money in training its employ-
ees—which became more difficult to THE DIETING BIND LIMITS T O PA S S E N G E R
sustain as the company grew (R6). GROWTH
The number of passengers eventu-
ally outstripped the airline’s capacity Individual
to provide good service. As a result, Metabolism ay
D el s
s s s R6 Service
quality suffered and People’s began Capacity
s Physical
losing passengers (B7). When competi- Dieting R3 Weight Loss B4
Calorie
Burn Rate
Capacity s s s
tors began matching low rates on s Service
o Revenues R5 Passengers B7
selected routes, People Express’s mar- Quality
ket competitiveness suffered even s o
more. Focusing only on the reinforc-

On a diet, an individualʼs metabolic rate At People Express, physical capacity—fleet
ing side of the structure turned rapid
growth into a tailspin, contributing to becomes the limiting factor for weight loss. size, routes, and employees—was seen as
the airline’s demise. The leverage point lies in boosting the the “engine of growth” (R5). The limit to that
metabolism to a permanently higher level growth was the companyʼs service capacity
through slow, steady exercise. (R6).
Simply hiring more employees was
not the answer to People Express’s ser-
T O O L B O X
“SHIFTING THE BURDEN”: THE

“HELEN KELLER” LOOPS
ost of us know the story of her parents shifted the burden of implementable usually relieve the
M Helen Keller and have probably responsibility for Helen’s welfare to problem symptom very quickly. But
sympathized with her and her parents, them. Every problem or failure on these symptomatic solutions have two
whose actions to protect their handi- Helen’s part brought the parents rush- specific negative effects. First, they
capped daughter seemed not only ing to her aid. Helen learned that no divert attention away from the real or
compassionate but necessary. After all, matter what she did, her parents fundamental source of the problem.
how could a blind and deaf child ever would accommodate her. And each More subtly, symptomatic solutions
be expected to take care of herself? incident reinforced her parents’ belief cause the viability of the fundamental
But had it not been for the determined that she was indeed helpless. All three solution to deteriorate over time, rein-
efforts of her teacher, Ann Sullivan, were caught in a system that was forcing the perceived need for more of
who refused to let Helen’s handicaps eroding Helen’s ability (and desire) to the symptomatic solution.
prevent her from becoming self- cope with the world and shifting the In the Helen Keller story, her par-
reliant, Helen probably never would responsibility for her well-being to her ents’ intervention is the symptomatic
have achieved her real potential. She parents. solution, Helen’s failure to cope with
went on to graduate from Radcliffe the real world is the problem symp-
College and became an author as well THE STRUCTURE tom, the development of Helen’s own
as spokesperson and role model for The basic structure of this archetype is abilities to care for herself is the fun-
many of the nation’s handicapped. shown in “‘Shifting the Burden’ damental solution, and the side-effect
Helen Keller’s story is much more Template.” The archetype usually is that her parents assume increasing
than an inspirational human interest begins with a problem symptom that responsibility for her well-being. This
story; it illustrates a pervasive dynamic prompts someone to intervene and particular type of “Shifting the
that is rooted in an archetypal struc- “solve” it. The solution (or solutions) Burden” structure, in which responsi-
ture. The well-intentioned actions of that are obvious and immediately bility is shifted to a third party, is
“SHIFTING THE BURDEN” “SHIFTING THE BURDEN” EXAMPLES

T E M P L AT E
PROBLEM S Y M P T O M AT I C F U N D A M E N TA L SIDE
SYMPTOM SOLUTION SOLUTION EFFECT(S)
Diverts resources
Symptomatic
Slow/Declining Increased away from R&D,

New products
Solution s
revenue growth marketing increased reliance
on marketing
B1
Responsibility for
s
Prudent banking protecting

o
Bank failures FDIC, FSLIC
Problem
practices deposits is shifted

R3 Side-Effect
Symptom
o
Dela to government
Growing depen-
y
B2
Employee Necessary
Manager dence on manager;
performance training for
“provides” solution decreasing confi-
Fundamental s
problem employee
dence of employee
Solution o
In the “Shifting the Burden” Template, a prob- Drug addiction;

Invest time
lem symptom is “solved” by applying a symp- further debilitation
Low self-esteem Drug use in personal
tomatic solution, which diverts attention away of personal
development
from a more fundamental solution. development

known as “Shifting the Burden to the norm says that says if a person wants Identifying problem symptoms such as
Intervener.” Over time, the role of the to handle complex, technically chal- high stress, falling revenues, energy
intervener increases, until it becomes lenging claims, she has to either join shortage, or bank failures (see
an essential part of the system. In the central office or move to a differ- “‘Shifting the Burden’ Examples” on
Helen’s case, her parents’ actions rein- ent firm (R6). Gradually, the most tal- p. 22) is probably the easiest way to
forced the underdevelopment of her ented people take either of the two begin filling out a “Shifting the
abilities and therefore strengthened options. Unless these people can be Burden” template.
their role as “protectors.” replaced by equally capable adjusters, Keeping in mind that the “right-
Another very common side-effect the talent of the branch office gradu- ness” of a solution depends on one’s
that occurs in “Shifting the Burden” ally erodes, making it even more perspective, it can be helpful to ask
situations is that the person may reliant on central support (R7). The whether we are seeing the situation
become addicted to the symptomatic cycle is reinforcing—as the central from the parents’, Helen Keller’s, or
solution. For example, a person who staff becomes better at intervening, the Ann Sullivan’s point of view.
turns to alcohol or drugs to boost his branch seeks their help more often. Examining a problem or issue from
self-esteem or deal with stress may these different viewpoints can help us
end up developing an alcohol or drug USING THE ARCHETYPE understand why a “Shifting the
dependency. Templates—causal loop diagrams that Burden” archetype is operating and
trace out generic dynamic structures— point us toward a fundamental, not
CENTRAL VS. LOCAL serve as useful guides for mapping out symptomatic, solution. •
The “Shifting the Burden” archetype archetypes. The basic “Shifting the
and its variants—“Addiction” and Burden” template is a good starting
“Shifting the Burden to the point, but templates are not meant to CENTRAL SUPPORT VS.
Intervener”—comprise perhaps the be rigid structures in which we must B R A N C H C A PA B I L I T Y
single most pervasive systems struc- “fit” a specific case. Tracing out the
ture. “Central Support vs. Branch fundamental solution in the Central
Central Staff
Capability” illustrates a classic exam- vs. Branch situation, for example, s Experts’ lay
Intervention De
ple of this dynamic. requires more than a single variable— s
A claims office in a local branch of “Branch attempts to settle claims,” B5 Expectation of
a large insurance company is faced “Learning,” and “Branch ability” are Central
R6 Intervention
with a large, complex claim that all part of the fundamental solution. Complex o
Claims Crunch
requires more expertise than it pos- In theory, any one of the four ele- o
s
sesses. The central office responds by ments of the template—problem Branch o
lay
Branch Attempts De
sending out its corps of experts, who symptom, symptomatic solution, side- Capability B4
to Settle
take care of the complex claim while effect, and fundamental solution—can s
o s
the branch office goes about its other, help us identify a “Shifting the Learning s R7 Migration of
Talent to
more routine business (B5). Although Burden” structure at work. Side- Central/Outside
the occurrence of large claims may be effects, however, are usually very sub-
infrequent—making it hard to justify tle and difficult to detect from inside
In this example of a “Shifting the Burden”
keeping such experts in every the system. Solutions such as alcohol
branch—over time the interventions use, increased marketing, oil imports, archetype, the symptomatic problem is a
complex claim that the branch cannot handle
alone. Experts from the central office help
can result in deteriorating branch or federal insurance are more readily
out, but over time the branchʼs ability to han-
capability. identified, but there may not be com-
dle difficult claims atrophies.
The reason is that, after a while, an plete agreement on whether they are
implicit operating norm develops. The “symptomatic” or “fundamental.”
T O O L B O X
“SUCCESS TO THE SUCCESSFUL”:

SELF-FULFILLING PROPHECIES
magine you have two new doing adequately, but for some reason, (R1). As B gets fewer resources, its
I direct reports, Stan and Frank. you just don’t feel that he has that success diminishes, which further
Both seem equally qualified—a degree extra “umph.” Since you already have reinforces the “bet on the winner”
from a good school, a couple of years a “hot one” on your hands, you feel it’s allocation of resources (R2). The struc-
of solid business experience, and not as necessary to invest as much time ture continues to reinforce the success
youthful enthusiasm. You want to fill and energy in Frank. of one player, and the eventual demise
an upcoming opening in a manage- In time, you promote Stan into the of the other.
ment position, but you aren’t quite management position and pat yourself “Success to the Successful” is an
sure which one is the best candidate. on the back for having picked the archetypal case of self-fulfilling
You want to be as objective as possible right person from the beginning. prophecies. The outcome of a situation
in your recommendation, so you Frank, in your assessment, turned out is highly dependent on the initial con-
decide to encourage both of them and to be just an average performer. But is ditions (or expectations) and whether
see which one demonstrates the most that really the case? they favor one party or the other. If B
ability. had received more resources in the
SELF-FULFILLING beginning, the roles would be
After a couple of weeks, Stan has
PROPHECIES reversed: B’s success would increase,
gotten a jump start on the latest
assignment and is doing a stellar job. The “Success to the Successful” and A would suffer.
Frank was out with the flu, so when archetype suggests that success may In effect, our mental model of
he comes back, he’s a little bit behind. depend as much on structural forces as what we believe will determine suc-
You keep your eye on him and con- innate ability or talent (see “‘Success to cess shapes the very success we seek to
tinue to encourage him, but you really the Successful’ Template”). The per- assess. In the case of Stan and Frank,
start to focus on Stan. Before you formance of individuals or teams is you may not have had a strong feeling
know it, you’re giving him more and often the result of the structure they either way in the beginning. But initial
more responsibility, and he does are put in, which forces them to com- events—Stan’s success with the first
exceedingly well each time. Frank is pete for a limited resource such as a project and Frank’s illness—quickly
manager’s time, a became the shaper of your expecta-
company’s invest- tions and actions, reinforcing what
“SUCCESS TO THE SUCCESSFUL” ments, or training you later believed to be an objective
T E M P L AT E
facilities. assessment that Stan was “right” for
Assuming that the job.
both groups (or
Success s o Success BALANCING WORK AND
of A of B individuals) are
equally capable, if F A M I LY
s Allocation to A s
R1 R2
Instead of B one person or The tension between work and family
Resources Resources
group (A) is given is another example of the “Success to
s o more resources, it the Successful” archetype (see
to A to B
has a higher likeli- “Balancing Work and Family”). We
hood of succeeding each have a certain amount of time
The “Success to the Successful” archetype suggests that success than B. That initial
may depend as much on structural forces as talent. If one person or
and attention available. The more we
group (A) is given more resources, it has a higher likelihood of
success justifies devote to work, the more successful
succeeding than B (assuming they are equally capable). The initial
devoting even we may become, which fuels the
success justifies devoting more resources to A than B (R1). As B gets
more resources to desire to put more time into work
fewer resources, its success diminishes, further justifying more A and robs B of (R3). A similar result occurs if we
resource allocations to A (R2). further resources devote our energy to our family (R4).

Most of us struggle to maintain a bal- the two protégés, the goal might be to the Successful” archetype is to get rid
ance between the two. provide an environment in which the of its competitive structure and find
Suppose, however, that a large pro- full potential of both employees can be ways to make teams collaborators
ject forces you to put in long hours at developed. Without the guidance of a rather than competitors. Many
work for an extended period of time. larger goal, the structure will continue Japanese companies, for example,
The time away from the family begins to dictate your actions. often have multiple project teams
to create tension at home. Your family working on the same design. Unlike
complains that you are never around. C R E AT I N G E N V I R O N M E N T S American companies, however, the
But when you do come home, you get FOR SUCCESS goal is not to compete against each
hit with all of the problems that have At the heart of the “Success to the other and have one team’s design win.
been accumulating. So you withdraw Successful” archetype lies the competi- All of the teams are seen as part of the
further from your family, devoting tive model of Western economies, same larger effort to develop the best
yourself even more to the work pro- which is characterized by a win-lose design for the company. The teams
ject. Your effort on the project is start- philosophy. An implicit assumption of collaborate with each other, sharing
ing to generate interest throughout the the competitive model is that whoever ideas and information, and produce a
company. At the same time that praise wins must, by default, be the best. In design that may feature a combination
at work is building, the complaints at reality, however, it may not be the of innovations from each of the
home are piling up, driving you even individuals, but the structure they are groups.
further from your family. The two sit- in, that determines the “winner.” The The “Success to the Successful”
uations—the downward spiral of one, assumption here is that you need a archetype highlights the need for cre-
and the upward spiral of the other— competitive environment to bring the ating a win-win environment where
mutually feed each other. best candidates to the surface. cooperation replaces competition and
A fundamental question that the where creating an environment for
REWRITING THE Archetype begs us to ask is, Why put success is more important than trying
PROPHECIES two groups or individuals into the to identify successful individuals. In
The “Success to the Successful” structure in the first place? If we want fact, that’s what good academic insti-
archetype highlights how success can a single “winner,” why not put our tutions provide, and ultimately what
be determined by initial chance and energy toward understanding what it good corporate environments should
how the structure can systematically takes to develop such a winner? We provide—an environment in which all
eliminate the other possibilities that can then focus our energy and members can thrive and contribute
may have been equally viable (or even resources on that person or project their unique talents. •
superior). If we are not conscious of from the beginning, rather than waste
being in this archetype, we become a time, money, and morale by stringing
victim of its structure, which continu- along multiple people
ally pushes us to do whatever has been and projects. We can,
B A L A N C I N G W O R K A N D FA M I LY
successful in the past. After a while, the in effect, lop off the
choice between work and family does- other half of the
n’t seem like a choice anymore—the “Success to the
Success s o Success
structure has determined the outcome. Successful” archetype. at Work with Family
As in most of the archetypes, man- Instead of diverting s Desire to Spend s
R3 R4
aging a “Success to the Successful” sit- resources and system- Time at Work Instead
of with Family
uation requires looking at it from a atically letting other
Time Devoted s Time Devoted
more macro level and asking ourselves groups fail, we can o to Family
to Work
“What is the larger goal within which focus all our efforts
the situation is embedded?” In the and resources on find- If not carefully managed, the allocation of time between work and
case of work vs. family, a larger goal ing ways to build a family can fall into a “Success to the Successful” trap. Extended
time away from the family (due to a large project, for example) can
create tension at home, making it more desirable to spend time at
that includes both of them, such as “I supportive environ-
work. As job success and time at work continue to build, family
seek a balance between my success at ment for success.
relationships can suffer.
work and time with my family,” must A way to break
guide the daily decisions. In the case of out of the “Success to
T O O L B O X
“TRAGEDY OF THE COMMONS”:

ALL FOR ONE AND NONE FOR ALL
o you recall any hot summer INDIVIDUAL GAIN, driver brings about a decrease in the
D days when you and your family C O L L E C T I V E PA I N average speed of everyone. Eventually,
decided to spend a relaxing day at the At the heart of the “Tragedy of the there are so many drivers that traffic
local swimming pool? You loaded up Commons” structure lies a set of rein- crawls at a snail’s pace. Each person
the car and arrived at the pool, only to forcing actions that make sense for seeking to minimize driving time has
discover that every other family had each individual player to pursue (see in fact conspired to guarantee a long
the same idea. So instead of the relax- “‘Tragedy of the Commons’ drive for everyone.
ing outing each family anticipated, Template”). As each person continues This structure also occurs in corpo-
everyone ended up spending a nerve- his individual action, he gains some rate settings all too frequently. A com-
wracking day dodging running chil- benefit. For example, each family head- pany with a centralized sales force, for
dren and trying to cool off in a pool ing to the pool will enjoy cooling off in example, will suffer from the “Tragedy
filled with wall-to-wall people. In the swimming area. If the activity of the Commons” archetype as each
many similar situations, people hoping involves a small number of people rela- autonomous division requests that
to maximize individual gain end up tive to the amount of “commons” (or more and more efforts be expended on
diminishing the benefits for everyone pool space) available, each individual its behalf. The division A people know
involved. What was a great idea for will continue to garner some benefit. that if they request “high priority”
each person or family becomes a col- However, if the amount of activity from the central sales support, they will
lective nightmare for them all. grows too large for the system to sup- get a speedy response, so they label
port, the commons more and more of their requests as
becomes overloaded high priority. Division B, C, D, and E
“TRAGEDY OF THE COMMONS” and everyone experi- all have the same idea. As the net
T E M P L AT E
ences diminishing result, the central sales staff grows
benefits. increasingly burdened by all the field
s
Net Gains Traffic jams in requests, and the net gains for each
s division are greatly diminished. The
for A Los Angeles are a
classic example of same story can be told about central-
R1 B5
how a “public” good ized engineering, training, mainte-
gets overused and nance, etc. In each case, either an
A’s o implicit or explicit limit is keeping the
s Activity lessened in value for
Resource
s Limit everyone. Each indi- resource constrained at a specific level,
R3 or the resource cannot be added fast
Total Gain per vidual wishing to get
Individual enough to keep up with the demands.
y
Activity to work quickly uses

la
o s
De
Activity
s R4 the freeway because
B R A Z I L’ S I N F L AT I O N
B’s
it is the most direct
s GAME
Activity o route. At first, each
R2 additional person on When the shared commons is a small,
R2 B6 the highway does not localized resource, the consequences of
slow down traffic, a “Tragedy of the Commons” scenario
Net Gains s because there is are more easily contained. At a
for B
s enough “slack” in the national level, however, the “Tragedy
In a “Tragedy of the Commons” structure, each person pursues

system to absorb the of the Commons” archetype can
actions that are individually beneficial (R1 and R2), but that eventu-
extra users. At some wreak havoc on whole economies.
ally result in a worse situation for everyone (B5 and B6).
critical level, how- Take inflation in Brazil, for example.
ever, each additional That country’s inflation reached 367

percent in 1987, 933 percent in 1988, to keep doing what he is doing. of the Commons” scenario involves
1,764 percent in 1989, and 1,794 per- Debates at that level are rarely pro- reconciling short-term individual
cent in 1990. With prices rising so ductive, because effective solutions for rewards with long-term cumulative
rapidly, each seller expected inflation a “Tragedy of the Commons” situation consequences. Evaluating the current
to continue. Therefore, seller B would never lie at the individual level. reward system may highlight ways in
raise his price to keep up with current In the sales-force situation, for which incentives can be designed so
inflation and hedge against future example, as long as each division that coordination among the various
inflation. With thousands of seller B’s defines the commons to include only parties will be both in their individual
doing the same thing, inflation its performance, there is little motiva- interest as well as the collective inter-
increased and reinforced expectations tion for anyone to address the real est of all involved. Since the time
of continued inflation, leading to issue—that the collective, not individ- frame of the commons “collapse” is
another round of price increases (R5 in ual, action of each division vying for much longer than the time frame for
“Brazil’s Inflation ‘Tragedy’”). more sales support is at the heart of individual gains, it is important that
Inflation also led to indexation of the problem. Only when there is gen- interventions are structured so that
wages, which increased the cost of eral agreement that managing the current actions will contribute to long-
doing business. In response to rising commons requires coordinating every- term solutions. •
business costs, Seller A raised her price, one’s actions can issues of resource allo-
which fueled further inflation (R6). cation be settled equitably.
Since there were thousands of Seller A’s
doing the same thing, their collective MANAGING THE
action created runaway inflation. The COMMONS
underlying health of the economy Identifying the com-
steadily weakened as the government mons is just the begin- B R A Z I L’ S I N F L AT I O N “TRAGEDY”
and businesses perpetuated endless ning. Other questions
cycles of deficit spending to keep up that help define the A’s Prices s
with escalating costs. Over time, every- problem and identify s
one grew increasingly preoccupied effective actions include: Cost of Doing
with using price increases to make What are the incentives Business
profits rather than investing in ways to for individuals to persist R6 s
be more productive. Eventually, such in their actions? Who, if B8
Indexation
an economy can come close to collapse, anybody, controls the Capacity to
owing to high debts and loss of global incentives? What is the Absorb Debt
s s
competitiveness. Dramatic price adjust- time frame in which Inflation Underlying
Health of
y
la
Rate s
ments can result (B7 and B8).
De
individuals reap the s o Economy

benefits of their actions? s
COMMON “COMMONS” What is the time frame
Inflation
B7
Perhaps the trickiest part of identify- in which collective Expectations
ing a “Tragedy of the Commons” actions result in losses R5
archetype at work is coming to some for everyone? Can the
agreement on exactly what is the com- long-term collective loss s
mons that is being overburdened. If no be made more real, B’s
Prices s
one sees how his or her individual more present? What are
action will eventually reduce every- the limits of the Brazilʼs runaway inflation shows how the “Tragedy of the
one’s benefits, the level of debate is resource? Can it be Commons” archetype can play out on a national level. As com-
panies raise prices in order to offset rising costs and inflation
expectations, they simply add more fuel to the fire of rising
likely to revolve around why individ- replenished or replaced?
inflation.
ual A should stop doing what she is The leverage in
doing and why individual B is entitled dealing with a “Tragedy
INDEX TO THE SYSTEMS THINKER
A Palette of Systems Thinking Tools V1N3, August 1990
Systems Archetypes at a Glance V3N4, May 1992
Organizational Addictions: Breaking the Habit V3N3, April 1992
Balancing Loops with Delays: Teeter-Tottering on Seesaws V1N2, June/July 1990
“Drifting Goals”: The “Boiled Frog” Syndrome V1N5, October 1990
“Escalation”: The Dynamics of Insecurity V2N9, November 1991
“Fixes That Fail”: Oiling the Squeaky Wheel—Again and Again V1N6, November 1990
“Growth and Underinvestment”: Is Your Company Playing with

a Wooden Racket? V3N5, June/July 1992
“Limits to Success”: When the “Best of Times” Becomes the

“Worst of Times” V1N7, December 1990/January 1991
“Shifting the Burden”: The “Helen Keller” Loops V1N4, September 1990
“Success to the Successful”: Self-Fulfilling Prophecies V3N2, March 1992
“Tragedy of the Commons”: All for One and None for All V2N6, August 1991
ABOUT THE TOOLBOX REPRINT SERIES
Systems Archetypes I: Diagnosing Systemic Issues and Designing High-Leverage Intervention is the first volume in the
Toolbox Reprint Series. Other volumes include Systems Archetypes II: Using Systems Archetypes to Take Effective
Action, Systems Archetypes III: Understanding Patterns of Behavior and Delay, Systems Thinking Tools: A User’s Reference
Guide, and The “Thinking” in Systems Thinking: Seven Essential Skills. All volumes are available for $16.95 each.
As these booklets are often used in training and introductory courses, volume discounts are available.
Call 1-781-398-9700 for details.
The Toolbox Reprint Series has been compiled from The Systems Thinker® Newsletter, which presents a systems
perspective on current issues and provides systems tools for framing problems in new and insightful ways.
The Systems Thinker includes articles by leading systems thinkers, case studies of systems thinking implementation,
software and book reviews, a calendar of workshops and events, and numerous other columns geared to different
levels of systems thinking ability. To learn more about The Systems Thinker or to subscribe, go to
http://www.thesystemsthinker.com.

PEGASUS PUBLICATIONS
The Toolbox Reprint Series

Systems Archetypes II: Using Systems Archetypes to Take Effective Action
Systems Archetypes III: Understanding Patterns of Behavior and Delay
Systems Thinking Tools: A User’s Reference Guide
The “Thinking” in Systems Thinking: Seven Essential Skills
The Pegasus Workbook Series
Systems Archetype Basics: From Story to Structure Systems Thinking Basics: From Concepts to Causal Loops
The Learner’s Path: Practices for Recovering Knowers
Learning Fables (available as soft-cover books or as e-books)
Outlearning the Wolves: Surviving and Thriving in a Learning Organization
Shadows of the Neanderthal: Illuminating the Beliefs That Limit Our Organizations
The Lemming Dilemma: Living with Purpose, Leading with Vision
The Tip of the Iceberg: Managing the Hidden Forces That Can Make or Break Your Organization
Listening to the Volcano: Conversations That Open Our Minds to New Possibilities
Newsletters (available electronically)
THE SYSTEMS THINKER® LEVERAGE POINTS® for a New Workplace, New World
The Innovations in Management Series
Concise, practical volumes on systems thinking and organizational learning tools, principles, and applications.
The “Billibonk” Series
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Other Titles
When a Butterfly Sneezes: A Guide for Helping Kids Explore Interconnections in Our World Through Favorite Stories
Anthologies
Managing the Rapids: Stories from the Forefront of the Learning Organization
Reflections on Creating Learning Organizations
The New Workplace: Transforming the Character and Culture of Our Organizations
Organizational Learning at Work: Embracing the Challenges of the New Workplace
Making It Happen: Stories from Inside the New Workplace
Essential Readings for the Innovative Organization (four titles, available individually in print as well as in PDF format)
Pegasus Communications, Inc. is dedicated to providing resources that help people explore, understand, articulate, and
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T O O L B O X R E P R I N T S E R I E S

Systems Archetypes I: Diagnosing Systemic Issues and Designing High-Leverage Interventions

Systems Archetypes II: Using Systems Archetypes to Take Effective Action

Systems Archetypes III: Understanding Patterns of Behavior and Delay

Systems Thinking Tools: A User’s Reference Guide

The “Thinking” in Systems Thinking: Seven Essential Skills

Systems Archetypes I: Diagnosing Systemic Issues and Designing High-Leverage Interventions

PEGASUS COMMUNICATIONS, INC.

e live in the world of events. Things happen and we respond—a machine

HOW TO USE THE ARCHETYPES

The archetypes can be used as templates for diagnosing vexing long-term

2 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

THE LANGUAGE OF LINKS AND LOOPS

BALANCING LOOP THE LANGUAGE OF

s A causal link between two variables,

in Y in the same direction, or where X

in Y in the opposite direction, or where

R A “reinforcing” feedback loop that

and the actual level, adjustments are made

4 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

Behavior Over Time Diagram Graphical Function Diagram Computer Model

Causal Loop Diagram Structure-Behavior Pair Management Flight Simulator

Provides “flight training” for managers

ARCHETYPE DESCRIPTION GUIDELINES

Drifting Goals • Drifting performance figures are usu-

6 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

The “Addiction” archetype is a special case

8 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

10 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

fueled a strong demand for airplanes.

may be lowered, thereby decreasing mixed results in terms of taxes, and,

12 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

new proposal aimed to reintroduce Gramm-Rudman

14 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

16 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

“GROWTH AND UNDERINVESTMENT”:

18 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

“LIMITS TO SUCCESS”: WHEN THE “BEST OF

20 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

ket competitiveness suffered even s o

more. Focusing only on the reinforc-

“SHIFTING THE BURDEN”: THE

“SHIFTING THE BURDEN” “SHIFTING THE BURDEN” EXAMPLES

Slow/Declining Increased away from R&D,

Prudent banking protecting

practices deposits is shifted

In the “Shifting the Burden” Template, a prob- Drug addiction;

22 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

“SUCCESS TO THE SUCCESSFUL”:

24 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

“TRAGEDY OF THE COMMONS”:

Activity to work quickly uses

In a “Tragedy of the Commons” structure, each person pursues

26 SYSTEMS ARCHETYPES I P E G A S U S C O M M U N I C AT I O N S , I N C . 781.398.9700

individuals reap the s o Economy

A Palette of Systems Thinking Tools V1N3, August 1990

Systems Archetypes at a Glance V3N4, May 1992

Organizational Addictions: Breaking the Habit V3N3, April 1992

Balancing Loops with Delays: Teeter-Tottering on Seesaws V1N2, June/July 1990

“Drifting Goals”: The “Boiled Frog” Syndrome V1N5, October 1990

“Escalation”: The Dynamics of Insecurity V2N9, November 1991

“Growth and Underinvestment”: Is Your Company Playing with

“Limits to Success”: When the “Best of Times” Becomes the