Source: Continuous Improvement Associates
http://www.exponentialimprovement.com/cms/freedom.shtml

Systems Thoughts
On Freedom
By Bob Powell, 2/16/05

There's been much recent talk of "freedom" and spreading "freedom throughout the world." But true freedom is about more than the ability to take action; it's more accurately about the ability to take effective action

Jay Forrester, the founder of the field of system dynamics, points out that we are typically very good at determining the levers to pull to modify system behavior. Unfortunately, most of the time, we pull the lever in the wrong direction and make the situation worse.

Donella Meadows noted this tendency:

The systems community has a lot of lore about leverage points. Those of us who were trained by the great Jay Forrester at MIT have absorbed one of his favorite stories. "People know intuitively where leverage points are. Time after time I've done an analysis of a company, and I've figured out a leverage point. Then I've gone to the company and discovered that everyone is pushing it in the wrong direction!"

If what we do does not yield the results we desire, how free is that? Not very.

The "Beer Game" illustrates the problem for a simple production-distribution system. I included the question below on the final exam of my "Systems Thinking and Problem Solving" course (more on the Beer Game at the end):

People are free in the beer game, but are helpless and unable to take effective action because, in this dynamically complex situation, it only takes one person to panic and over-order for the system to go into large amplitude oscillations. It does so even though all other players make locally logical decisions. So freedom is more than the absence of external controls on our behavior; it also includes a deeper and more insidious form of bondage.
A. Organizational bureaucracy that limits our options for action.
B. Having only one way of looking at the world that limits our options for action.
C. Governmental rules, regulations, and reporting requirements that limit our options for action.

As you might expect from what's written above so far, the answer is "B." They want a well-behaved system, but their actions don't produce it ... just the opposite.

In situations like this we are actually powerless. In effect, as Peter Senge has observed in The Fifth Discipline, we're captive to a more insidious form of bondage:

We are "prisoners of our own thinking."

In fact, when systems are dynamically complex, we're not equipped to know what action to take without systems thinking. And in many cases, if not most, what's required is system dynamics modeling and simulation because our human brains are simply not equipped to do the simulation in our heads any more than we are capable of driving safely when drunk.

There are so many examples of pulling the lever in the wrong direction that it shouldn't be difficult to believe. Here are a few:

  • To save money in manufacturing, companies have cut back on preventive maintenance only to find equipment downtime and equipment repairs increasing to bring on crisis after crisis.
  • Companies have cut back on customer service to save money, only to find that they're losing their most valued customers. It's much more profitable to keep our steady customers than it is to try to attract new ones.
  • To deal with increased work pressure, companies have cut the "target time per order." As "time per order" goes down, management interprets this as learning and cuts back even more on service capacity. But this is "false learning," because what's really happening is that they're just providing poorer customer service, which leads after some delay to losing customers more rapidly. This Service Quality Erosion is an industry-wide problem.
  • Insurance companies have management policies that result in systematic, long-term underinvestment in claims adjusting capacity that largely cause rising settlement costs and increased litigation.

It's been observed by many that the rate of change is accelerating. For example:

"Change isn't what it used to be." Charles Handy

As change accelerates, dynamic complexity increases. This means these kinds of effects become more prevalent. Therefore, it's more important than ever that we recognize this requirement for freedom and use systems thinking when it's needed.

A systems thinking or system dynamics approach is appropriate for problems that

  • are dynamically complex … there are feedbacks with long delays.
  • are chronic … they have existed for some time and defied corrective action.
  • have well-understood reference modes of behavior … we can draw or plot behavior over time charts.
  • can be explored with those with the power to act … to explore and share their mental models.
  • are important … because it requires an investment.
  • are clearly-defined … we don't "model the system," we model a problem.
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Excerpts from The Fifth Discipline by Peter Senge, Chapter 13, in the section on Freedom:

<<
... in the beer game ... people can run their local operation any way they want. Yet, ironically, the results they produce, in almost all cases, are contrary to what they intend. Because of this they often feel helpless, trapped with a set of forces they cannot control, despite being free to make their own decisions. ...

This is the great irony of freedom of action; by itself, it can result in helplessness, in feeling trapped and impotent. ...

"People think they are free because of the absence of external controls," says O'Brien. "But, in fact they are prisoners of a deeper and more insidious form of bondage ... they only have one way of looking at the world." ...

"Freedom to" (rather than "freedom from") is the freedom to create the results we truly desire."
>>

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