System Archetype: “Limits To Growth”

(Excerpted from the article “The System Archetypes” By William Braun, and annotated by the author)

The Systems Archetypes describe common patterns of behavior in organizations. As a diagnostic-tool they provide insight into the underlying structures from which behavior over time and discreet events emerge. As a prospective-tool, they alert managers to future unintended consequences. Collectively they challenge managers to consider the merits of fundamental solutions by making time an explicit variable in decision making. This is the first of the series of blogs on this subject – RHE.

Limits to Growth, or L2G for short, was introduced in the 1972 book of the same name by a group of MIT-scientists, under the direction of System Dynamics founder Jay W. Forrester, that was commissioned by the Club of Rome to undertake the classic study on the predicament of humankind.

The group was composed of Donella Meadows (Team-leader), Dennis Meadows, Jørgen Randers and William Behrens. The book, a by-product of their report to their Client, has spawned a generation of “World” models that critically examine the policies that deplete natural resources over long periods of time, arguing that we are sowing the seeds of our own future destruction.

The relevant variables and interactions of the L2G-archetype are presented in Figure 1 below.

Generic L2G Model

Fig. 1 – Causal Diagram of L2G Archetype

The theory is not without its challengers and detractors. Nevertheless, it does put forth the premise that growth cannot continue unabated in an unrestricted reinforcing dynamic.

In simple terms, the lesson from Limits to Growth is that something always pushes back. There is no such thing as unrestricted positive reinforcing behavior. There are always limits that eventually make themselves known and felt.

Dynamic Theory

This archetype states that a reinforcing process of accelerating growth (or expansion) will encounter a balancing process as the limit of that system is approached. It hypothesizes that continuing efforts will produce diminishing returns as one approaches the limits.

Behavior Over Time (BOT)

Efforts to grow an effect are successful in initial stages, perhaps exponentially so (Fig. 2). However, as the limits to growth are approached, the growth engine begins to
lose its effectiveness and the rate of growth begins to flatten. In the end, despite continued pressure from the growth engine, the rate of growth stops and then reverses.

BOT Graph

Fig. 2 – BOT Graph

Application – Planning

If we don’t plan for limits, we are planning for failure. This archetype shows that being successful can be just as dangerous to long-term health as being unsuccessful. By mapping out the growth engines and potential danger points in advance, we can anticipate future problems and eliminate them before they become a threat.

Example

America-On-Line experienced initial success on a fee-per-minute business model. Their competition offered a flat-rate for connecting and accessing the internet. In an effort to both recapture their eroding market share and grow subscribers, AOL began an aggressive marketing campaign, flooding the market with CDs designed to make subscribing and connecting easy and attractive. These dynamic interactions are modeled as in Fig. 3.

Example AOL

Fig. 3 – Example – AOL

The campaign was an enormous success, so much so that the demand completely overwhelmed their technical capacity to deliver service. Not only were new subscribers alienated, so too were existing subscribers who left in significant numbers.

Prescriptive Action

  • Focus on removing the limit (or weakening its effect) rather than continuing to drive the reinforcing process of growth.
  • Use the archetype to identify potential balancing processes before they begin to affect growth.
  • Identify links between the growth processes and limiting factors to determine ways to manage the balance between the two.

Seven Action Steps

  1. Identify the growth engines.
  2. Determine the doubling time of those processes.
  3. Identify potential limits and balancing loops.
  4. Determine change required to deal effectively with the limits identified.
  5. Assess the time needed to change. Is there a discrepancy between the doubling time and the changes required to support growth?
  6. Balance the growth. Identify strategies for achieving system balance.
  7. Reevaluate the growth strategy. Continuously challenge assumptions.

What Does This Really Mean?

Managers are encouraged to be “action oriented” and “proactive”, constantly engaged in the process of pushing on people and situations to make them change or move. Typically, they focus their attention on the sphere of activity in the organization that coincides with their title and job description.

The Limits to Growth archetype (or Limits to Success as it applies) reminds managers to take the time to examine what might be pushing back against their efforts. The counter-force may come, and most likely will come, from either (a) parts of the organization not under the control of the manager or (b) from the external environment. Expansionist thinking is a key competency for locating Limits to Growth. By focusing their attention on these limits, managers may find opportunities to either continue the improvement curve they were on, or identify the elements in the system that represent the counter-force and devise new improvement initiatives that would reduce or remove the limits.\\RHE

—end—

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About Ramon H. Enriquez MIE&M, RME

Ramon H. Enriquez is a retired business executive who now spends his available time sharing his more than 35 years of industry experiences in the Philippines and abroad as; an Independent Management Consultant for, and a Professorial Lecturer of leading Metro-Manila universities on the various value-creation and strategy-execution topics that he now specializes: Supply-Chains, Operations, Quality, Enterprise-Projects, and Decision-support---their system designs and management, in particular. His affiliations with relevant leading global industry associations (APICS, CSCMP, PMI, INFORMS, ASQ, ISM among others) keeps him updated on the current and future developments in these fields. He is a lifelong Systems Thinker/ Modeler, and an avid Micro-blogger. His hobby includes Digital-photography/ -graphics, Singing, Acoustic guitar playing, Songwriting, and Audio-recording/ -mixing. When not traveling, he normally spends his time at his Quezon City home-office with his wife, Gay; son, Dax; and dog, Brutus.
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