Tuesday, October 15, 2019

Two system archetypes and feedback loops

To understand this text, you should first read about feedback loops if you are not familiar with them.

Systems have the same principles and share common characteristics. Systems that have enough common characteristics can be described as archetypes. Systems that belong to the same archetype have a similar structure, goal, or purpose and their behavior is similar over time. Similar feedback loop behavior is the main common denominator in system archetypes. Reinforcing feedback loops produce archetypes more often than balanced ones. Reinforcing loops usually produce behavior that is too much for the balancing loops. It is a rare occasion when balancings loops produce archetypes.

Limits to success archetype

Sometimes success is too hard to handle. Most people are not prepared to handle it. Limits to success archetype usually have a self-reinforcing feedback loop and a balancing loop that keeps reinforcing loop stable. When the balancing feedback loop cannot handle the acceleration in the self-reinforcing loop, problems will start to occur. After a while, the reinforcing loop cannot produce growth and your balancing loop becomes the dominant one. Then your success starts to deteriorate.

For example, when you become suddenly famous and successful and you are not prepared to have a balancing feedback loop that is strong enough to handle your success. The demands for your success will increase. Your growth can be in danger because later some limiting factor that was not a problem before like time appears. This growth becomes less sustainable because maintaining the growing demands more of your time. Suddenly, growth disappears because the balancing loop begins to dominate the system and your time and other resources are tied to the wrong places.

You have to make changes to solve the problem, but you have to figure out the main cause of it. Did your priorities change? Did the problem of saying no to less important things become a real problem for you? What you have to do is to find the right limits for these activities that weren´t your problem before? When you have found them and you cannot limit the time used for them yourself, you might need to hire somebody else to manage your time and say no to less important things so that you can focus your efforts on the most important things.

Escalation archetype

Competition is usually a good thing. But it can go too far and produce some unwanted consequences and escalate into a full-blown war between two or more competing entities. Usually, the escalation archetype is consisted of limited stock, competitors, and balancing loops. Escalation is more or less a zero-sum game. If two competitors have limited shares of goods, one of them cannot have more than 100%. This means that these two can have a combined share of 100% of the goods. Usually, competitors fight from a slowly growing amount of goods. And this fight usually is pretty stable because of those balancing loops. When some variables in balancing loops change as things escalate, self-reinforcing loops inside the balancing loops are shaped. These loops create problems.

Before escalation, the shares of goods are almost or completely stable between the competitors. All their efforts go to maintain this balance in the shares of goods. Escalation begins when one competitor changes its behavior and another sees that behavior as a threat to their position. What happens is that the competitor who was interested in maintaining balance has to react to the first mover´s behavior. For example, this can result in a price war escalation. The first mover reduces the price of their goods and the other competitor has to follow. This can change into a self-reinforcing pricing war with several rounds of price reductions. It usually ends when both competitors are not able to reduce their prices or one/all competitors are destroyed.

Competition is good for society and actors in it. Even escalation can be a good thing. Positive goals are good. Many escalating competitions can produce good results for societies. For example, competition in developing new medicines can produce better ways to cure diseases. If this competition escalates, it helps others. It can even help companies if they develop faster processes to develop medicines. The best way to reduce the problems of this archetype is to avoid it. Collaboration is often the best way to manage things. It should be your first choice.

There are many other system archetypes and most of them usually are about feedback loops and their mismanagement. Changes in the variables in feedback loops can produce unintended effects and these can change system behavior in a completely different direction. Sometimes it is about changing goals or dominant interconnections that produce addictions.

There are many good books about systems and you can find more information about different archetypes from them.

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Until next time,

TT


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