Thinking in Systems

November 20, 2017 P Thaz, Cory Sarver Appreciation of Systems 3 minutes, 29 seconds

Thinking in Terms of Systems

In our last post, we described the attributes of a system and gave a few examples. In this post, our goal is to show you how to think in terms of systems. Once you start practicing this mode of thought, you realize how ubiquitous systems are.

Events are Rarely Disconnected

One of the characteristics of systems is the impact of feedback and loops. Every event has primary, secondary, and tertiary effects. There is an entire field of study (and folk philosophy) dedicated to the combinatorial explosion of consequences that arises from a single event (chaos theory). Realizing every event (E) has precursors (P) and subsequent effects (S) helps, but this could still trap the observer in linear thinking. P → E → S (linear thinking)

The key is realizing that S influences P, which in turn triggers similar E, which in turn triggers S, which influence P, ad infinitum. This is simple enough to understand. So why are we often so bad at recognizing these systems?

One answer is most systems are balancing systems. If nothing changes, it is harder to notice. If your car keeps running, you rarely consider the systems inside it. Only when it ceases to function properly do we look at the systems and determine which component caused the problem. In larger systems, we might even take them for granted. When we turn on the water to take a shower, we rarely think about the long journey that water has taken from a water source to our bathrooms. Only when dirty or polluted water flows from the faucet, perhaps after a natural disaster, do we start to think about whence the problem arises.

Delays

The other main contributor to humans’ poor recognition of systems is delay. If the delay is short, then the system is much easier to identify. However, if the delay is weeks or months, the effects are far more difficult to notice. The real world is messy and there are countless variables also affecting states. When all this noise obscures the main drivers of an effect (i.e., precursors of events), it certainly is difficult to realize P → E.

There are four types of delays: physical, transactional, informational, and perceptual. Let’s say the furnace for your property fails. How do these delays manifest?

Type Manifestation
Physical Time for physical parts to arrive
Transactional Time to negotiate prices, make phone calls, and settle the purchase
Informational Time from the actual failure until you know of it
Perceptual The change in tenant views of your management capabilities (especially if the problem is recurring)

Regarding perceptual delays, a combination of sayings might best describe it: bad news spreads like wildfire, but good news flows like molasses.

Short and Long Delays in Action: An Example

Due to economic decline, robberies are on the rise in your residence’s area.

Due to new reports about the crime in the area, fewer potential tenants are interested in your property. Not realizing the system, you see falling interest and, using basic economic theory, you reduce the rent. The informational delay is short, because the information is almost immediately updated on the rental websites.

Another article is published decrying crime in the area. The informational delay is short – everyone reads the report in the local paper. As people move out due to crime or other reasons and spread the word of the problem, the low price you advertise is associated with a struggling landlord saddled with property in a crime-ridden area. Again missing the systems at work, you lower the price further, but this only strengthens the public’s beliefs about the danger of the area. Perhaps the low price even attracts gang members looking for cheap storage or meeting places, further exacerbating crime rates in the area.

As one can see from this simple example, noting lower interest and reflexively lowering the price caused a downward spiral, possibly even contributing to the growing crime problem in the area. Even if decisions are the same, it is important to be cognizant of the systems present in any situation, how components influence each other, and what the timeframes the delays occur within.