Chapter 7

October 29, 2022 6:47 PM

What is Self Limiting?

Limit to Success: When the "best of times" becomes the "worst of times"
- A pattern of limited growth is the result of focusing on improving activities which focuses on
improving growth accelerating factors instead of reducing growth limiting factors

Principle of Leverage
- Leverage is the process of applying SMALL FORCE that multiples into LARGE effects
- It is hard to disagree with the principle of leverage. But the leverage in most real-life system is
not obvious to the most actors in those systems
- Because we don't see the structures underlying our actions, we focus on the symptoms where
the stress is greatest. We repair or ameliorate the symptoms, but such efforts only makes
matters better in the short run, at best, and often worse in the long run

When We Create our Own "Market Limitations"

WonderTech - Electronics company
- Yet the company, which began with meteoric growth, never sustained its rapid growth after its
first three years. Eventually, it declined into bankruptcy
- "Our computers are so good that customers are willing to wait fourteen weeks for them. We
know it's a problem, and we're working to fix it, but nonetheless they're still glad to get the
machines, and they love 'em when they get 'em."
- "Investment in products, investment in advertising, good word of mouth, all could have
reinforced past success into future success. But one especially evident in the WonderTech
story was the reinforcing process created by investing revenues in increasing the sale force:
more sales meant more revenues , which meant hiring salespeople, which meant more sales."

Balancing (Stabilizing) Process

- There was one factor which turned customers off: long delivery times. As backlogs rise relative
to production capacity, delivery time increases. A reputation for poor delivery service builds,
eventually making it harder for WonerTech's salespeople to make more sales. The limits to
growth structure, then, look like this:

In a limits to growth structure, the worst thing you can do is push harder to the reinforcing process

Seeing the Forest and the Trees

We all know the metaphor of being able to "step back" far enough from the details to "see the forest
for the tress." But, unfortunately, for most of us when we step back we just see "lots of trees." We
pick our favourite one or two and focus our attention and efforts for change on those

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