Have you ever thought, why no matter how much money rich countries pour to the poor countries, the poor countries are still poor? One of the possible answers is because money is not the most limiting factor of those poor countries. Maybe education is. Maybe human resource quality is. Maybe even the geographical location is.

Limiting factor is a concept that we are aware, been using for ages, but we rarely think about it deliberately. That was one of the many concepts that I learnt when I read Thinking in Systems: A Primer, by Meadows et al.

Money, education, human resources, rich vs. poor, geographical location are interconnected, and they are part of a system. They behave in such a way that produce their own patterns and behaviour over time. When we are thinking in system, we don’t think linearly. We consider the surrounding areas. We think broader. We eliminate the boundaries as much as we can.

Here I handpicked a few concepts that are worth noting…

Stock, inflow, and outflow

Think of a bathtub as a system. The water inside the tub is the stock. Inflow is the water in, and outflow is when you drain the water out. A lot of things in this universe (system) follow this mode.

Delays or lags or buffer

Imagine you planting a seed. There’s a delay between seeds to sprouts. This delay/lag is a buffer in a system where changes do not show immediately.

Balancing vs. reinforcing feedback loop

Balancing feedback loop is something like thermostat. Keep adjusting to hit the desired temperature. Whereas reinforcing feedback loop is something like snowball rolling down hill. It gets bigger as it rolls down. It amplifies changes in one direction.

Universe is organised into hierarchies

Everything in system is organised into hierarchies. In a company, we have CEO at the top, then a few department heads (marketing, finance, sales, engineering, etc) reporting to CEO. City is a collection of suburbs. Our body is a collection of cells.

The world is continuum

Boundaries are non-existent. Boundaries are there only to facilitate discussions. They are our own making, and should be continuously re-considered depending on the problem/discussion. Our invention of “adult” vs. “teenager” are simplification of something complex and continuous.

Limiting factor

Apart from the example at the beginning of the article, here’s another analogy. Imagine you are baking cookies. You might have plenty of flour, sugar, and eggs. But, you run out of butter. In this case, butter is the most limiting factor. Limiting factor is the resource or condition that, when used up, stops the growth or progress of the entire system.

Bounded rationality

People can make decision based on the information that they have. It is determined by incentives, disincentives, goals, and constraints. For example, you are in a supermarket shopping for groceries. You make decisions on what you buy based on what’s available on shelves, constrained by the time that you have, and your memory of prices. You make decision based on those limited information and resources that you have in hand.

Policy resistance

Imagine the local council installs traffic light in an intersection to reduce the number of accidents happening. Instead of reducing the accidents, the traffic light now increases the number of speeding of people trying to beat the red lights, which potentially increases the number of accidents. The policy (traffic light installation) is resisted by the system (driver behaviour), leading to unintended consequences.

Eroding goal (aka. “boiled frog syndrome”)

Your department was allocated a certain amount of budget for this year. Entering Q4, you only spend 40% of the allocated budget. Due to the fear that you will be allocated less budget next year if you don’t finish the budget, now you are trying to spend as much as you can to finish the budget the end of the year. This behaviour is an eroding goal. The goal shifts from its original purpose, “efficient use of resource”, to unintended goal, “maintaining budget level”.

Personally, learning to think in systems makes me stay humble as a learner. Keep learning, acknowledge that I won’t be able to understand everything that the universe has to offer.

If I could, I would add an eleventh commandment to the first ten: Thou shalt not distort, delay, or withhold information. You can drive a system crazy by muddying its information streams. You can make a system work better with surprising ease if you can give it more timely, more accurate, more complete information.