INTRODUCTION TO SYSTEM Elements do not define the system

DYNAMICS
Changing the elements of the system has the
System least impact on the behavior. It is the
-​ Interaction of elements and their structure that determines how the system
interconnection that come together behaves
for a purpose
Interconnections
Dynamics -​ Relationships between that bind
-​ Behavior of movement or changes in elements together
system -​ Include physical flows, information
-​ Flow of resources in information or signals, and governing rules or
energy feedback mechanisms
-​ It has patterns and trends like
population growth, supply chain Changing interconnections often has a
greater impact on system behavior than
System Dynamics changing elements
-​ Methodology or framework for
understanding the behavior of system 1.​ Physical flows - movement of
materials
A system should be a group of things that is 2.​ Information flows - data or
organized and have a common goal instructions changed
3.​ Rules and Procedures - governing
A system’s structure causes its behavior. behavior through policy
Events may trigger change, but the system’s 4.​ Feedback loops - results that
design determines how it responds influence new actions

Do not blame external events. External Purpose of a System

events may start a reaction but the system’s -​ What it tries to achieve
internal rules, feedback loops, and delays -​ Strongest determinant of the system
determine how it behaves over time behavior
-​ Revealed through behavior over time

Elements Change the purpose, and you change the

-​ visible, tangible parts system even if all elements and
-​ Physical components, people, interconnections stay the same
institutions
The purpose of a system is not what it says,
it is what it does
The purpose can emerge from subsystem
goals. Systems can inherit purpose from SYSTEM DYNAMICS PROBLEM
their parts but sometimes those parts conflict
with others Iceberg
1.​ Events - occurrences that we
System purpose is not always intentional – it encounter on a daily basis
emerges from how parts interact 2.​ Patterns - accumulated memories of
events; when strung together, they
Systems Thinking can reveal recurring trends
-​ Understanding a system by 3.​ Systemic structures - ways in which
examining the linkages and the parts of a system is organized;
interactions between the elements this generate the patterns and events
that compose the entirety of the we observe; redesigning things at a
system systemic level that offers us more
-​ Understanding a world of leverage to shape the future than
interdependence and things simply reacting to events does
continually changing
-​ Enables people to look at problems A system dynamics problem is undesirable
persistent behavior pattern
Problems to consider in Systems Thinking
1.​ Interconnections failed Behavior Pattern
2.​ Conflicting sub purposes -​ Not individual or isolated cases
3.​ Ignored feedback -​ Sustained cases or events
4.​ Delayed responses -​ Apparent tendencies of data points
5.​ Incentive misalignment -​ Expected future direction
-​ Hidden, inherent, and implicit
Systems Thinker relationships of events and
1.​ Seeking to understand the big picture conditions
2.​ Seeing patterns or trends in systems
3.​ Recognize how system’s structure Problem Variable
causes the behavior -​ Main concern of the target audience
4.​ Identify cause and effect relationship
5.​ Surfacing and testing assumptions Historical Data Set
6.​ Finding unintended consequences -​ Represent or indicate the problem
7.​ Finding leverage points to change a
system Graphical Presentation
8.​ Resisting making quick conclusions -​ Indicate persistent behavior patterns

Behavior Pattern
-​ Basis for validation
Elements of System Dynamics Problem Qualitative Analysis
1.​ Dynamic Behavior - action turned -​ Involves system conceptualization
out to be more forceful or had a -​ Established the components and
certain lag that what it was intended boundary of the system
2.​ Time Horizon - period of time over -​ Foundation step of the structure of
which the problem plays itself out the system
3.​ Reference Behavior Mode - patterns -​ Identifies the relevant causal
over time that will be referred to variables (cause and effect of the
again and again system)
4.​ Unintended Consequences - provide -​ Established the direct relationships
long term view of the dynamic between variables
consequences -​ Provides the insight and rationale to
5.​ Delays - time lags or reaction time of the variables and their relationships
the decision with respect to its effect
on the system Causal Loop Diagrams must include only
6.​ Amplification - when action turned what you believe to be genuine causal
out be more forceful than what it was relationships, never correlations, no matter
intended how strong

Purpose of the Model Variables

1.​ Gain clarity 1.​ Quantities that rise and fall
2.​ Capture mental model a.​ Population, inventory, blood
3.​ Policy analysis pressure, ideas, delay
b.​ Not: planning, culture,
QUALITATIVE ANALYSIS ergonomics, feelings
2.​ Quantities that are measured or are
System Dynamics Methodology theoretically measurable
1.​ Problem recognition and definition a.​ Savings, profit, temperature,
a.​ Dynamic problem distance
recognition b.​ Satisfaction, reputation, love
2.​ Qualitative analysis 3.​ Quantities with units or dimensions
a.​ Problem variables and a.​ Population
relationships and loops b.​ Inventory
3.​ Quantitative analysis c.​ Blood pressure
a.​ Stocks, flows, and equations d.​ Ideas (number)
4.​ Parameter sensitivity e.​ Effort (intensity)
a.​ Critical variables and insights f.​ Stress (scale)
5.​ Policy analysis and design g.​ Try (number)
a.​ Solution design and tests
Causal Relationships The feedback loops sees the world as an
1.​ Influence - major factor interconnected set of circular relationships,
2.​ Affect - minor factor where something affects something else and
3.​ Dictate - only factor is in turn affected by it
a.​ On and off of light
4.​ Govern - programmed reaction based Types of Feedback Loops
on selected factors 1.​ Reinforcing Loop - pushes the
system in one direction, often
Causal Variables leading to growth or decline
1.​ Empirical evidence - interviews or
literature -​ Form the building blocks of
2.​ Theoretical evidence - research the dynamic systems
theories, existing frameworks -​ Virtuous cycles
3.​ Logical evidence - facts and rational
connections 2.​ Balancing Loop - pushes the system
4.​ Mathematical evidence - additivity toward stability, aiming to maintain
equilibrium
For traffic:
-​ Balancing process
1.​ Empirical - get interviews from
customers why they avoid public Guidelines for Setting Up Relationships
transportation
2.​ Theoretical - search for theories Variable Names
about urban planning, road capacity, -​ Use nouns or noun phrases
induced demand, cognitive -​ Do not use verbs
3.​ Logical - parking availability, fuel -​ Refer to those quantities that can rise
price or fall, grow or decline, up or down
4.​ Mathematical - traffic flow, density, -​ Phrase the variables positively
speed -​ Identify the units of the variables. If
necessary, invent it
Feedback Loops
Loop Construction
Feedback -​ Watch out for unintended effects
-​ Transmission and return of -​ All balancing loops are goal-seeking
information processes
-​ When using actual values, look for
The key word is return which makes the corresponding “desired values”
feedback perspective different from other -​ Distinguish between actual and
perspective perceived values
 -​ Draw larger loops as they progress Escalation Archetype
from shot to long term process -​ Two or more parties compete in a
-​ Insert an intermediate term for way that causes them to continually
clarity raise the stakes—usually with
negative consequences for both
General Tips -​ “If they raise the bar, we must raise it
1.​ Count the number of “O”s or “-” in higher”
the loop. Odd = balancing, Even =
reinforcing Fixes That Fail
2.​ Be clear about the purpose of the -​ Situations where a quick solution
model temporarily eases a problem — but
a.​ Top level ends up making the problem worse
b.​ Strategic - long term in the long run
consequences and aggregated -​ “The fix works now... but causes
variables bigger trouble later”
c.​ Tactical - shorter term effects
and more specific variables Growth and Underinvestment
-​ How an organization or system may
System Archetype fail to grow—or even
collapse—because it doesn't invest
System Archetype enough in its capacity to support that
-​ Capture the common stories in growth
systems thinking -​ “We want growth… but we don’t
-​ Dynamic phenomena that occur invest to handle it. Then poor
repeatedly in diverse settings performance discourages future
-​ Repeated pattern or behavior investment.”
-​ Diagnose problems and identify high
leverage interventions that will Limits of Success
create fundamental change -​ A system initially experiences
successful growth, but then that
Drifting Goals growth slows down, stops, or
-​ A systems thinking archetype where reverses because it hits a limiting
a system’s performance standard or factor
target gradually lowers over time -​ “What got you here won’t get you
-​ Instead of solving the real problem, further—unless you address the
people adjust the goal downward to limits”
match poor results
-​ Lowering the goal immediately Shifting the Burden
closes the gap whereas corrective -​ A quick fix is used to relieve a
actions usually take time problem, rather than addressing the
 underlying cause. Over time, this fix
can weaken the system’s ability to
solve the real issue — making things
worse in the long run
-​ “Why fix the root cause when we
can keep patching the symptoms?”

Success to the Successful

-​ How initial advantages can lead to
compounding success for one
party—while others fall further
behind. This creates a positive
feedback loop where "the rich get
richer" and inequality grows over
time.
-​ “Whoever is winning keeps
winning—because they keep getting
more resources”

Tragedy of the Commons

-​ Situation where individuals, acting in
their own short-term self-interest,
overuse and degrade a shared
resource, ultimately harming
everyone — including themselves
-​ “If I don’t take more, someone else
will.”
-​ Leads to overconsumption