Key takeaways


  • Folks who do systems analysis have a great belief in “leverage points.” These are places within a complex system (a corporation, an economy, a living body, a city, an ecosystem) where a small shift in one thing can produce big changes in everything.
  • The systems analysts I know have come up with no quick or easy formulas for finding leverage points. When we study a system, we usually learn where leverage points are. But a new system we’ve never encountered? Well, our counterintuitions aren’t that well developed. Give us a few months or years and we’ll figure it out. And we know from bitter experience that, because of counterintuitiveness, when we do discover the system’s leverage points, hardly anybody will believe us.
  • PLACES TO INTERVENE IN A SYSTEM (in increasing order of effectiveness) 9. Constants, parameters, numbers (subsidies, taxes, standards). 8. Regulating negative feedback loops. 7. Driving positive feedback loops. 6. Material flows and nodes of material intersection. 5. Information flows. 4. The rules of the system (incentives, punishments, constraints). 3. The distribution of power over the rules of the system. 2. The goals of the system. 1. The mindset or paradigm out of which the system — its goals, power structure, rules, its culture — arises.
  • Insofar as this part of the system consists of physical stocks and flows — and they are the bedrock of any system — it obeys laws of conservation and accumulation. You can understand its dynamics readily, if you can understand a bathtub with some water in it (the state of the system) and an inflowing faucet and outflowing drain. If the inflow rate is higher than the outflow rate, the stock gradually rises. If the outflow rate is higher than the inflow, the stock gradually goes down. The sluggish response of the water level to what could be sudden twists in the input and output valves is typical — it takes time for flows to accumulate, just as it takes time for water to fill up or drain out of the tub.
    • Note: There is a slowness to change, even if we make drastic changes in input or output
  • Parameters are dead last on my list of powerful interventions. Diddling with the details, arranging the deck chairs on the Titanic. Probably 90, no 95, no 99 percent of our attention goes to parameters, but there’s not a lot of leverage in them.
  • Mostly, the numbers are not worth the sweat put into them.
  • Consider a huge bathtub with slow in and outflows. Now think about a small one with very fast flows. That’s the difference between a lake and a river. You hear about catastrophic river floods much more often than catastrophic lake floods, because stocks that are big, relative to their flows, are more stable than small ones. In chemistry and other fields, a big, stabilizing stock is known as a buffer.
    • Note: Buffer -> Mental model
  • You can often stabilize a system by increasing the capacity of a buffer.4 But if a buffer is too big, the system gets inflexible. It reacts too slowly.

New highlights added October 25, 2022 at 5:09 PM

  • If you’re trying to adjust a system state to your goal, but you only receive delayed information about what the system state is, you will overshoot and undershoot. Same if your information is timely, but your response isn’t. For example, it takes several years to build an electric power plant, and then that plant lasts, say, thirty years. Those delays make it impossible to build exactly the right number of plants to supply a rapidly changing demand.
  • One of the big mistakes we make is to strip away these “emergency” response mechanisms because they aren’t often used and they appear to be costly. In the short term we see no effect from doing this. In the long term, we drastically narrow the range of conditions over which the system can survive. One of the most heartbreaking ways we do this is in encroaching on the habitats of endangered species. Another is in encroaching on our own time for rest, recreation, socialization, and meditation.
  • This great system was invented to put self-correcting feedback between the people and their government. The people, informed about what their elected representatives do, respond by voting those representatives in or out of office. The process depends upon the free, full, unbiased flow of information back and forth between electorate and leaders. Billions of dollars are spent to limit and bias and dominate that flow. Give the people who want to distort market price signals the power to pay off government leaders, get the channels of communication to be self-interested corporate partners themselves, and none of the necessary negative feedbacks work well. Both market and democracy erode.
  • Anti-poverty programs are weak negative loops that try to counter these strong positive ones. It would be much more effective to weaken the positive loops. That’s what progressive income tax, inheritance tax, and universal high-quality public education programs are meant to do.
  • Missing feedback is one of the most common causes of system malfunction. Adding or restoring information can be a powerful intervention, usually much easier and cheaper than rebuilding physical infrastructure. The tragedy of the commons that is crashing the world’s commercial fisheries occurs because there is no feedback from the state of the fish population to the decision to invest in fishing vessels.
  • The rules of the system define its scope, its boundaries, its degrees of freedom. Thou shalt not kill. Everyone has the right of free speech. Contracts are to be honored. The president serves four-year terms and cannot serve more than two of them. Nine people on a team, you have to touch every base, three strikes and you’re out. If you get caught robbing a bank, you go to jail.
  • If you want to understand the deepest malfunctions of systems, pay attention to the rules, and to who has power over them.

New highlights added October 26, 2022 at 11:10 AM

  • Self-organization means changing any aspect of a system lower on this list — adding completely new physical structures, such as brains or wings or computers — adding new negative or positive loops, or new rules. The ability to self-organize is the strongest form of system resilience. A system that can evolve can survive almost any change, by changing itself.
  • The wildly varied stock of DNA, evolved and accumulated over billions of years, is the source of evolutionary potential, just as science libraries and labs and universities where scientists are trained are the source of technological potential. Allowing species to go extinct is a systems crime, just as randomly eliminating all copies of particular science journals, or particular kinds of scientists, would be.
  • I said awhile back that changing the players in the system is a low-level intervention, as long as the players fit into the same old system. The exception to that rule is at the top, where a single player can have the power to change the system’s goal.
  • But the thoroughness with which the public discourse in the U.S. and even the world has been changed since Reagan is testimony to the high leverage of articulating, meaning, repeating, standing up for, insisting upon new system goals.
  • Paradigms are the sources of systems. From them, from shared social agreements about the nature of reality, come system goals and information flows, feedbacks, stocks, flows and everything else about systems.
  • Whether it was Copernicus and Kepler showing that the earth is not the center of the universe, or Einstein hypothesizing that matter and energy are interchangeable, or Adam Smith postulating that the selfish actions of individual players in markets wonderfully accumulate to the common good, people who have managed to intervene in systems at the level of paradigm have hit a leverage point that totally transforms systems.
  • There is yet one leverage point that is even higher than changing a paradigm. That is to keep oneself unattached in the arena of paradigms, to stay flexible, to realize that NO paradigm is “true,” that every one, including the one that sweetly shapes your own worldview, is a tremendously limited understanding of an immense and amazing universe that is far beyond human comprehension.
  • Magical leverage points are not easily accessible, even if we know where they are and which direction to push on them. There are no cheap tickets to mastery. You have to work hard at it, whether that means rigorously analyzing a system or rigorously casting off your own paradigms and throwing yourself into the humility of Not Knowing. In the end, it seems that mastery has less to do with pushing leverage points than it does with strategically, profoundly, madly letting go.