Lecture 3 –

Causal Loop Diagrams (CLDs) and Feedback

IE2141 Systems Thinking and Dynamics

Dr. LI Haobin, Senior Lecturer

Department of Industrial Systems Engineering and Management (ISEM)
College of Design and Engineering
National University of Singapore

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
 Let's protect the environment
Lecture notes are subject to change before
the class for further improvement
(Ver. 27 August 2023)

Acknowledgement
The preparation of this module has been made possible by the support from IE2141
teaching team, and the past teaching materials developed by A/Prof. Aaron Chia.

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 2
 3.1 Introduction to CLDs

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 3
 reconstruct ->
structure (what
Preh netted ofanalysing system ste)
qualitate conceptual
modeof system
I analysionte
freedquantitative Simulated Lads
What is CLD? -
system , need use
Stock for dregram Estem Dynemin

▪ A causal loop diagram (CLD) is a causal diagram

that aids in visualizing how different state variables
in a system are causally interrelated.
▪ The diagram consists of a set of words and arrows.
Causal loop diagrams are accompanied by asnally Lea
narrative which describes the causally closed setof closed -

De
situation the CLD describes. lap drags .

describe stemtal
I

▪ Closed loops, or causal feedback loops, in the causality & feeds ac

-

diagram are very important features of CLDs.. relationstip Hesystem

↳
7
in

means causal relationships in the system non-liter beharbours inte

are interrelated , not unidirectional Dynamic

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
sassemPresented ofeltedtfeedbac Lansponding
by test
closed loops

names
adjust entereste
make
I

4
systembehander dy
 ⑧ Findgeaktrabte variables in system
currentwater feel
Examples of CLDs desired water be
waterbend
gap betaet desild
water flow
Gawelt position
▪ Filling a glass of water
Entoolflorrt
W offamet

peentoflow

elet means
to

obsee
e
I

↑ Jere
re ~
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 5
 Examples of CLDs

▪ Love Relationships

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 6
 canuse othercolours to mark system vars
causal relationshiparrows symbols signs for loops
,

forhighlighting purposes

Causal Loop Diagram Notations

represent Arrows drection ofamsalvationship
that
state variables when vor startend of arrow changesS
words in blit ->System cancause var. pointed by head ofarrow

get changesenerenter
to to change

C.g
.

change fametpos Will causewaterflow

,
to be changed
The words indicate state
The arrows tell the
variables with values
sweep
cutter change over time
direction of causality
between two variables.
Indicates that the surrounding circle of carsal relationships
form a closed -to circuit Usethe letter in the middle to
op
I
.

Indicate if cans al relationship Typically

of let e
letter/grp
uninyuelyreferatte loop inclu this
,
.

represented arrowers positi or reg pirofarrow --> Indicate direction of this causal loop ((N/A(N)
↑
tre means when 'Causelvarchange ,
The sign for a loop tells
effect' var will change in same direction
-e-'cause verchange, effect' vor whether it is a positive (+) or
-
change Mop die The +/- signs tell whether negative (-) feedback loop.
-

increases declase ofHe the variables at the two

variables to positivel
But Cr
only mark those delays
, in the
negative influenceofthe
effect ends move in the same (+)
g Minwater key impact onsystem their behaviour,
e cause gap
.
.

futu ,utversa
or opposite (-) directions. that have a
The sign indicates & ignose
I subtle delays , treating
other

↓ important delays causalimpactas instantaneous response

Representation of He causal A
relationship has a delay
certain time

↳ When "cause" varchanges "effect" ,

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
vor need 8 awhite to change 7
 Causal Loop Diagram Notations
▪ Draw CLDs in Stella Architect Remarks: In IE2141 assignments / project,
▪ All CLDs shall be drawn using Stella Architect

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 8
 3.2 Principles in Drawing CLDs

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 9
 both varforbetteI onetottert

can be tell-re

Correlation
Deg
vs. Causation
of relationship bet Zer more ver - Hendof variables similar can
say there is a correlation
↑

P
. ,

**
.

causation implies correlation

-
change in /var that can be reasoned into change in anotherwar (aereng ranother)
.
-
sooner arlate ,
Tcomlation
causation
doesn necessarily lead backto
▪ Causation: the act or process of causing something to happen or exist.
▪ Correlation: Correlation is a statistical measure that expresses the extent to which two
variables are linearly related (meaning they change together at a constant rate). It's a common
tool for describing simple relationships without making a statement about cause and effect. correlation
deduce
cam
only help us

onestanding
▪ Causal Loop Diagrams must include only causation, i.e., causal relationships.
setze
bt

Patternsobsend from historical data

I bet .

System variables)

rely on experimential knowledge

micepte resich experiments ,

Not conflations excluding offer possible

I factors
influencing
Doesn imply
ice-cream sales
caused by sunburn

from pastdata
It patterns summarised to
correlation need
Sobtaining experimentral knowledge
doesnfir ,

cannotdetermine cantation
re-examine if
catation obtained
*Thrsause-uronstruct
office
me =

experients
->
som own exp /interviews reading
im
.
N

to
from exp erience Way
become most imp .

determine causation 10
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
is correct
 Itrantstrefaster cost
rises
,

fasterHe pri wil use

Naming Variables -
rateof
rate of
& price
ostrising rising
▪ Variable names should be nouns or noun phrases
▪ The action (verbs are captured by the causal links)
▪ The causal diagram captures the structure of the system.

Est , precsof

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 11
 Positive Directions in Variable Names
▪ Choose variable names with a positive normal sense of direction
▪ Avoid variables names indicating negation (non- , un- , etc)
morequares press
need Austin
thinking Bommended
maybe
-
-

&
umbersome
- Quarrels imply a
Quanesimply negative
positive cansal relationship causal relationship to
↳ unhappiness happiness

Forsome commonly accepted

terms (unemployment rate)
,
Canstil
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 2 use negative prefixes 12
 Unambiguous Polarity
▪ Causal Links should have a clear polarity
▪ If the polarity (+ / -) is unclear, it usually indicates the presence of multiple causal
pathways
Bret , morproft untproffe
,

affect total profit by affecting

& unt proft

/
positie
(+ or -) ? causal
relationship
-
Bre e
↳esspat wi
choose/beableto Iffect total proft
buy , sales by affecting
number

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore of sales 13
 How much we can simplify
of intermediate
A description
Level of Aggregation
steps
in causal relationship
a

▪ Use of intermediate variables for easier and clearer communication

overlooks intermediate steps - Ambiguity missing interactions
urgnaggregation
->

in causal relationships
I
bet intermediate variables
Highly aggregated
water

dunnid sommel
explaination for
causalimpall &
econs students

Iftlereader
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 14
 Level of Aggregation
▪ Use of intermediate variables for easier and clearer communication fo
farmerchoose retain
stock tha sell unz net

the sell more

↑

peele
futerpust
uppor E creatE
prices shortage
a
perio
large
into market -> push do on
stophup might
, port pries
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
Linderings I things dift . 15
 Making Feedback Loops
▪ Close a system, do not leave it open
in the CLD
Each system variabl can only appler ONE -

-Vinorders -> tinsales

↑insales leadto

winmarketse

causal feedbad'tops- building blocks of as

discover seedback loops

# Wien plotc, actively book for &
UD without feedback tops> meaning los onz reflect ↓ vinsales-> backlog insales

inter invertible system

Bendentre causal
chain into the shape
E Repeatedly referenced systemvariable
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore of errat for
as connection points 16
seedback loops
 Tips for Layout
▪ Use curved lines for your links
▪ Make important loops follow circular or oval paths
causal corrections dun
▪ Organize diagram to minimize crossed paths I cross each after so
I
▪ Avoid circles, hexagons or other symbols around the causal diagram
symbols
▪ Build and iterate
▪ Use commercial software
-
Ahangs retur porder explor
Dravlg need to be progressive
-

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 3.3 Feedback Loops with Delays

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 ligsnonball use "R" to represent

S
or
~einfaring" loo

Reinforcing Loops
&
or self-reinfaring loop
tre feedback loop
↑
▪ Reinforcing Loops
▪ Positive feedback
acts ▪ Engines of growth or collapse
▪ Loops with all positive or an even number of negative causal links
hulasfordeclass thr series of changes in feedbackloop affected by vara
system var a

will be intensified in
,

of its
orginalchange
Tordentity sinfaring samedrection
treinforcing top

Performance
Performance

Gopor acij Exponential Growth Exponential Collapse

bunt number of
causal relationships Increasing at an Decreasing at a
regate
each feedback
on loop increasing (faster and increasing (faster and
-entie feedback lar faster) rate exp growth/collapse
.
faster) rate
at trecausal
relationships or
Time indicates Time
recantal
usually hu reinforcing
of
even number
-

relationships Her s a reinforcing lo mesence of such Munstable system" I ↳opisode it

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
veinfaring loop 19
 or
= Use "" to
present

self-balancing /negativefeedback loop

seesaw
balancing "loop
~

↑ graphic

Balancing Loops
Wher
system ver changes , if itaffects itself
loop in the opposite direction of its Mitral change -balancing roop

▪ Balancing Loop
thin a feedback

↓
▪ Negative feedback
acts causal
as ▪ Stabilizers or solution to target subsystem issue zoidently wuntno of negative
,
.

count
relationships eachfeedback loop If
.

is oddnumber Her its balancing loop

▪ Loops with an odd number of negative causal links
a
,

expodlay
goal-seeking

Performance
Performance
Performance

Performance

oscillatory observed
lice
bekannig
↓MBoThs
↳I balancing loop
in the
system Time Time Time Time
It systemdassifiedas stable system
20
↳ also contain balancing prop
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
a
 Infeedbackcontrol system, time delay can also reflect
feedballops cannot
trade offs between short term & long term responde strategie
inevery feedbacklop existina State system a g porkpie could 1st then suddtazof time
.
-

delay

Delays↑ in CLDs &

feedback loops
-

A pair of
Theoretically Senedday all west
but
-

system ver. Gy affecteach offer mutually ,

▪ Types of Delays not& the same time

-

▪ Physical (time needed forphysical displacements

▪ Transactional (tieforspecfictransactional processing Alwreview entire
* loop
,
(or2 causal
identify
▪ Informational Itine for mfo transmissions .
relationships a apparent
most

delay madethe tes

time

▪ Perceptual Ianeforpepton ofpl on

aroun

▪ Delays that give system inertia,

▪ Create oscillation
▪ Often responsible for trade-offs between
long and short term effects of policies
Generally largerdelay shows
down
womatter what land ,

Possible impactof of time delay , in a

-> system expogromte & collapse
Sessebehanbur
the delay on system reinforcing loop,
anaffect rateof
rate
Time
dely inbalancing ka ever

system grout/collapse most

imp more considerable delay delay ,
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
oscillations intensity 21
audresultinoscillatory behaviour ->
 3.4 Laws of Systems Thinking

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 1st Law of Systems Thinking
to solutions lead t emergence of
of the
impact
↑ might read
unforseen stant new issues
▪ Today’s problems come from yesterday’s “solution”.
Often we are puzzled by the causes of our problems, when we merely need
to look at our own solutions to other problems in the past.
Solutions that shift problems from one part of a system to another often go
undetected because, those who "solved" the first problem are different from
those who inherit the new problem.

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 23
 resulten racfiepushback
&

aggrdfeeful actions -> often

visible +re "action mechanism"
also her
asystem, spent from effect
,
I
-
Intervene
hidden mechanism for compensating
↳2nd Law of Systems Thinking
foretel actions
might tuggerthis

▪ The harder you push, the harder the system pushes back.
The phenomenon of "Compensating feedback": when well-intentioned
interventions call forth responses from the system that offset the benefits of
the intervention.

I
The more effort you expend trying to improve matters,
the more effort seems to be required, either through
an increasingly aggressive intervention or through
increasingly stressful withholding of natural instincts.
Yet, as individuals and organizations, we not only get
drawn into compensating feedback, we often glorify
the suffering that ensues. pay attr to hidden
this

as alpath gensetsete
i
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore interventory 24
 ->
Wen gotz , alw8tZ
3rd Law of Systems Thinking
combined resultof somedelay Compensating effect

▪ Behaviour grows better before it grows worse.

The better before worse response to many management interventions is
what makes decision making counterproductive, in the situations where
factors other than the intrinsic merits of alternative courses of action weigh in
making decisions – factors such as building one's own power base, or
"looking good," or "pleasing the boss.“

In complex human systems there are always

many ways to make things look better in the
short run. Only eventually does the
compensating feedback come back to haunt you.
Duncomplacent once thinking everything resolved
Stay vigilant 25
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
 usually reed more Compreheate profound long-term
& approach)
complex prob think ,

4th Law of Systems Thinking

~Stampantet
He
merosaurs,embedded&in
feedbackloop" constituted by probs
▪ The easy way out usually leads back in.
solutions I
effecte short-term,
often fals to address not caused
might intensity be issue

extligte We all find comfort applying familiar solutions to problems, sticking to what
of3 we know best. Very often, the keys are off in the darkness. After all, if the
solution were easy to see or obvious to everyone, it probably would already
have been found.
Pushing harder and harder on familiar
solutions, while fundamental problems
persist or worsen, is a reliable indicator of
nonsystemic thinking – what we often call
the "what we need here is a bigger
hammer" syndrome.
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 26
 5th Law of Systems Thinking the prob but face more severeconsciences
not fallbackinto
only

▪ The cure can be worse than the disease.

Sometimes the easy or familiar solution is not only (Cure) ve
- impact of

fam solution on
ineffective, but addictive and dangerous. The long-term,
,

long term
solution

most insidious consequence of applying nonsystemic

solutions is increased need for more and more of the
solution. The phenomenon is called "Shifting the Burden
-
to the Intervenor.“
-

Instead, any long-term solution must, strengthen the

ability of the system to shoulder its own burdens.
Sometimes that is difficult; other times it is surprisingly
easy. (Disease)

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 27
 6th Law of Systems Thinking
surpassingoptimal growth rathe lead to issies
nat Oman made
.
e hard systems development speeds &equi points
I

▪ Faster is slower. Tortoise Beats Hare

Virtually all natural systems, from ecosystems

to animals to organizations, have intrinsically
optimal rates of growth. The optimal rate is far
less than the fastest possible growth. When
growth becomes excessive, as it does in
cancer, the system itself will seek to
compensate by slowing down; perhaps putting
the organization's survival at risk in the largegrowth ratemight be powerless
I optimal
since margroute resultonly
leads to
process. -red grout rate/ .

ve compensating effect
decease compensating effect corresponding
-
,

achieved
try notachieving even
threatening the
growth rate
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 28
 7th Law of Systems Thinking
make changes take action I immediately see desired effect (mightintake somethe aofmanifestf
occur unexpected parts systems

▪ Cause and effect are not closely related in time and space.
“Effects" means the obvious symptoms that indicate that there are problems. “Cause"
means the interaction of the underlying system that is most responsible for generating
the symptoms, and it could lead to changes producing lasting improvement.
A fundamental characteristic of complex human systems: "cause" and "effect" are not
close in time and space. However, most of us assume, most of the time, that cause
and effect are close in time and space. There is a fundamental mismatch between the
nature of reality in complex systems and our predominant ways of thinking about that
reality.

X vs. V
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 29
 8th Law of Systems Thinking
verage port
si azkane
▪ Small changes can produce big results, but the areas of highest ->

reinforcing feedback
loops in
system
leverage are often the least obvious.
Some have called systems thinking the “new dismal science” because it
teaches that most obvious solutions don't work – at best, they improve
matters in the short run, only to make things worse in the long run.

* potential
But there is another side to the story. For systems thinking also shows that
long-term small, well-focused actions can sometimes produce significant, enduring
improvement improvements, if they're in the right place. Systems thinkers refer to this
effects
principle as “leverage”. often least obvious /overlooked sdiscover the
feedback loop that
2 / encompasses the matters itself enfand reinforcing loo
->
takesmallscat
,

I
Identify & exploiting terage points linkthatrea least effort to touch & change within
,

actions tochange
-

L
tresepts
achieve
can
lastingimprovements throughout +
system
dretcausal relationships
the matter
affecting
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 30
 9th Law of Systems Thinking
moment
Being avere of ontinuous
charges over time ratter thanjuzte state & specifie
,
a

▪ You can have your cake and eat it too – but not at once.
Sometimes, the knottiest dilemmas, when seen from the systems point
of view, aren't dilemmas at all. They are artifacts of "snapshot" rather
than "process" thinking, and appear in a whole new light once you think
consciously of change over time.

vs.

Vi
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 31
 10th Law of Systems Thinking
▪ Dividing an elephant in half does not produce two small
elephants.
Living systems have integrity. Their character depends on the
whole. The same is true for organizations; to understand the most
challenging managerial issues requires seeing the whole system
XX
that generates the issues.
Incidentally, sometimes people go ahead and divide
an elephant in half anyway. It results in a
complicated problem where there is no leverage to
be found because the leverage lies in interactions
that cannot be seen from looking only at the piece +
you are holding. Thus losing the properties Dinding system into
Vi
a

He had will autoff the

system originally independent parts U

diet those Stadbuck loops E

interconnected camsalfeedbackloops in
IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore
besystem 32
 11th Law of Systems Thinking
only excercebate prob making it worse
,

▪ There is no blame.
We tend to blame outside circumstances for our problems. “Someone else” –
the competitors, the press, the changing mood of the marketplace, the
government – did it to us.
Systems thinking shows us that there is no outside; that you and the cause
of your problems are part of a single system. The cure lies in your
relationship with your “enemy”.
matted back loop
Blaming only puts
us

↳
regate roults
R1 R2

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 33
 Let's protect the environment
Lecture notes are subject to change before
the class for further improvement

THANK YOU
The preparation of this module has been made possible by
the support from IE2141 teaching team, and the past
teaching materials developed by A/Prof. Aaron Chia.

IE2141 Systems Thinking and Dynamics – ISEM Department, National University of Singapore 34