A Very Short Introduction to Systems Thinking

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2020-11-25

The way we typically perceive the world, is through events. This happened here, and over there, something else happened. However, nothing ever happens without having been caused by something else. Once we understand the causes of events, we can better understand why they happened, and we can also better understand how to influence future events.

Systems Thinking is the method that is used to understand how components of a system influences each other.

Systems modeling is always done in diagrams, because there are too many things happening simultaneously to be able to describe it in words.

Let me illustrate using a very much simplified example, our water supply. A major component of a systems diagram, is a store. In the example, the dam. A special kind of store could also be described as a source, in the example rain and the river. The next important idea is that of a flow, either an inflow from the river and the rain into the dam, or the outflow from the dam through the tap.

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At a glance it can be seen that as long as the inflows are larger than the outflows, the water level in the dam will increase. If the inflow from the river always exceeds the outflow to the taps, then the system will always be ok. However, if the outflow exceeds the river inflow, the level in the store (dam) will decrease. As long as the rain in the rainy season is enough, it will restore the store of water in the dam.

Systems form identifiable archetypes - actions that re-appear often in different systems.

Example 1 - Limits to growth

In limits to growth, there is some constraint in the system that inhibits the growth. In our dam example, the size of the dam is the limit to growth.

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Example 2 - The reinforcing loop.

In this example the store is a bank account, and we add to new elements, a variable - the interest rate, and an action - the payment of interest. As interest payments are made to the bank account, the bank account grows, and as the bank account grows, so does the interest payments.

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Example 3 - Tragedy of the commons

In this very common archetype, we string together a few archetypes. The stock/source of fish in the sea is a common good, not owned by any entity. It seemed vast, and fisheries kept on growing in a reinforcing loop - as demand for fish grew, more fisheries joined, technology and catches kept on increasing. But there is a limit to growth - the rate at which the fish stock can replenish itself. Once the catches exceed the replenishment rate, the stock will dwindle, until it collapses. This tragedy of the commons occurs very frequently, not only in fishing, but we are now seeing it in climate change on a very large scale. In history we saw it in the overgrazing of the commons, hence the name.

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If the reduction in overharvesting happens soon enough, the stock can recover. However, once the stock declines below a certain level it is very difficult, and sometimes impossible for the stock to recover. We saw that in sardines - what we nowadays buy in stores as sardines are mostly pilchards, sardines have been fished out.

Using systems thinking allows us a much better understanding of complex systems in the world, like the economy, or politics. Once you take into account the fact that the West, in its fight against communism after the second world war, overthrew a democratically elected government in Persia/ Iran, it becomes suddenly much more easy to understand Iran’s distrust of the west in general. Add to that the fact that Iran’s Muslims are mostly Shia’s, and Saudi’s Muslims are mostly Sunni’s, and Saudi Arabia and America are staunch allies, their specific disdain of America also becomes much clearer.

Example 4 - Systems are hard to change

This is not an archetype, but it is a very important characteristic of systems. And it manifests in two different ways.

First, changing intrinsic system behavior is difficult. E.g. management continuously adjust their businesses to improve. I will refrain from getting into details here, but I think off the cuff everybody will agree, changing the behaviour or outcomes of a system is very hard..

Second, changing a system to the extent that it is completely replaced, is extremely difficult. And this is readily apparent to anybody that is paying attention to the current attempts to move the world from a fossil fuel energy based economy (system) to a renewable energy based system.

The problems come in different ways, and I’ll illustrate using the above example, but the principles apply in general across all systems, especially larger systems.

The old system has been fine tuned for a long time. In the fossil fuel economy, it covers improvements to the extraction of fuels, the generation of fuels, the distribution of fuels and the consumption of fuels. Consumption includes cars, trucks, trains, ships and planes for transportation, buildings for heating and cooling, and the myriads of by-products produced and consumed in this system.

The investment in any non-trivial system is usually large, and in the case of the fossil fuel based system, it is unbelievably large. This include bricks and mortar, intellectual property, computer systems, a trained workforce and system to train them, and many other components.

Changing one part of the system, affects all other parts of the system. Introducing electrical vehicles into the system, requires replaces the refuelling system with a recharging system. But you cannot put in place a recharging system, if you do not have the vehicles to make use of them. And people will not buy the vehicles, until there is a recharging solution in place. This is why the hydrogen valleys being implemented in Europe and elsewhere in the world is such an important idea. It gets several role players in the supply chain together, ensuring that the demand and supply for products grow in tandem.

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