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The Building Blocks of Systemic Behavior: Reinforcing and Balancing Processes
Feedback is just one piece of the picture when we’re thinking about how systems behave. To fill out the picture, let’s consider some examples of systemic behavior that we’ve all experienced. For instance, maybe you’ve worked in a company that was initially growing exponentially in sales, only to collapse a few years later. Or, maybe you’ve engaged in one of America’s favorite pastimes—dieting—where you kept losing the same 15 pounds over and over again. Or, you may recall that, when you were first learning to ride a bicycle, you wobbled down the street trying to stabilize yourself and eventually fell down (wondering what was wrong with three wheels anyhow).
All of these examples might seem completely unrelated on the surface; however, if we take a closer look at them, we can identify some very basic things that they have in common. In fact, all systemic behavior can be described through just two basic processes—called reinforcing and balancing processes. Both of these “building blocks” of systemic behavior involve distinctly different feedback. And, it’s the combinations of these processes that give rise to the vast variety of dynamic behavior in the systems we see all around us.
Reinforcing Processes: The Engines of Growth and Collapse. Reinforcing processes arise from what’s known as positive feedback. No, this isn’t praise for a job well done. In systems terminology, it means information that compounds change in one direction with even more change in that direction. In other words, successive changes add to the previous changes and keep the change going in the same direction.
Let’s take a simple example of a savings account. If you have a positive balance, each time there is an interest payment calculation, the amount will be slightly bigger than the preceding payment period. This is because the balance has grown since the previous calculation. The time period after that, the interest amount will be bigger still, because the balance has grown a little more since the time before. Of course, all this is assuming that you are not making withdrawals during this time (which may be a big assumption for many of us!).
Another example is the wonderful growth engine that every marketer knows about: the word-of-mouth effect. As you increase the number of customers using your products, there are more “mouths” to tell others about your products. The resulting awareness leads to more sales, which leads to even more happy customers telling others. (Of course, this scenario is based on the assumption that your customers have nice things to say about your product!)
In the bank-account and word-ofmouth scenarios, a reinforcing dynamic drives change in one direction with even more change in the same direction. You can detect this kind of loop at work simply by sensing exponential growth or collapse (such as the rapid spread of an exciting new idea, or a company that suddenly goes out of business).
You can also think of reinforcing processes as “virtuous circles” when they produce desirable behavior. You may have encountered virtuous circles when you heard people talking about coming down the learning curve (the compounded increase in rate of learning as we learn more) or increasing economies of scale (the higher the production volume gets, the lower our unit costs become).
When reinforcing processes produce behavior we do not want, they are called “vicious cycles.” Oftentimes, a virtuous loop can become a vicious loop when something kicks it in the opposite direction. In our word-of-mouth (WOM) example, the loop can turn “mean” if what people have to say about our product is negative. The negative WOM effect leads to lower sales, fewer customers, less WOM effect, even lower sales, etc.
These reinforcing processes are already embedded in our everyday language, which speaks to their pervasive presence. You’ve probably heard or used expressions such as “we were caught in a death spiral” or “things just kept snowballing.” Mapping such processes explicitly onto feedback loop diagrams (or causal loop diagrams, as they are called in the systems thinking field) lets us see and talk about them collectively so that we can respond more effectively to them.
BEHAVIOR OVER TIME GRAPHS
Throughout the rest of this volume, you’ll notice a few diagrams that look like this:
These are called behavior over time graphs. They’re valuable because they show how certain variables that may be of interest to us—such as our savings balance, the number of customers we have, or our weight—are changing over time. They also provide clues to the kind of systemic processes that may be at work. A rapidly rising or falling graph, for example, indicates a reinforcing process, whereas an oscillating graph suggests what’s called a balancing process.
Balancing Processes: The Great Stabilizers. We know there must be more to systems than just reinforcing loops, because our experience tells us that nothing grows forever (well, okay, except for taxes). We need something else to describe other kinds of behavior that do not look like continual exponential growth or decline. When we look around us, we see a great deal of stability, despite all the talk about the era of rapid change we are in. For example, despite the rising or falling fortunes of individual companies or industries, the world of commerce continues to thrive around the globe. The world does change, but it does so on a platform of great stability. What accounts for all this constancy? It is balancing loops, the other “building block” of systemic behavior
Balancing loops are continually trying to keep a system at some desired level of performance, much as a thermostat regulates the temperature in your house. Whereas the snowballing effect of reinforcing loops destabilizes systems (that is, puts them out of equilibrium), balancing loops are generally stabilizing or goal seeking. They resist change in one direction by producing change in the opposite direction, which negates the previous effects. (This is why they are also called negative feedback loops.) For example, when the thermostat in your home detects that the room temperature is higher than the thermostat setting, it shuts down the heat.
There is always an inherent goal in a balancing process, and what “drives” a balancing loop is the gap between the goal (the desired level) and the actual level. As the discrepancy between the two levels widens, the system takes corrective actions to adjust the actual level until the discrepancy decreases. In the thermostat example, gaps between the actual room temperature and the temperature setting of the thermostat (the goal) prompt the thermostat to adjust the heating or cooling mechanisms in the house to bring the actual temperature closer to the desired temperature. In this sense, balancing processes always try to bring conditions into some state of equilibrium.
It would not be a gross exaggeration to say that balancing processes are everywhere. They are far more ubiquitous than reinforcing loops. However, they’re a lot less visible, because they quietly function to keep things as they are. We tend to notice things that have changed much more than things that remain the same. For example, think about the times when you are aware of your body temperature. Most likely, you notice it only when it has “grown” beyond your normal level in the form of a fever, or when it has fallen below normal owing to hypothermia. Similarly, when do you notice how your car engine is running? Most likely, only when it quits running. In both cases, there is a massive number of balancing processes at work to keep the system running smoothly. (Quick, which system —you or your car—has more loops? Hint: One is made by humans; the other by nature.)
Balancing loops show up in organizations most often in the form of control loops. The balancing “language” is everywhere you look: “damage control,” “inventory control,” etc. We could say that all managerial responsibilities can be viewed, in one way or another, as balancing processes. Just think: All you really need to do to be a great manager is understand how to manage balancing loops! Sound far-fetched? That is actually the great secret to becoming a good general manager—having the ability to rise above the distraction of the details and see the underlying systemic structures that are producing the results. Seeing the world through the lenses of reinforcing and balancing loops will help you develop these skills.
YOU TRY IT: REINFORCING PROCESSES
Now that you have a feeling for what reinforcing loops are like, try your hand at drawing a few of them. They could be from your personal life (falling in love, making an investment) or professional setting (launching a new product, learning a new skill). The main point is to depict a clear and compelling story of how things mutually reinforce change in one direction in a complete circle.
