How do you identify and avoid reinforcing and balancing loops that hinder your goals?

I started a habit reading during my commutes to work. I started with fictional content (The Legendary Moonlight Sculptor) and have now added economics and corporate finance to my reading lists. The transition was easy thanks to the positive reinforcing loop of finishing a really (really) long book that had already touched upon economic considerations.

The whole idea of creating a dynamic model (any model in general) is to address an issue, so we are not modeling the whole system. It means also identifying the positive and negative feedback loops is relative to the goal of the system. Contrary to a common belief, positive loops don't mean positive results, but they mean any impact on the system reinforces the initial impact due to the feedback loop mechanism. That is the reason identifying loops is common for analysis the impact of any system intervention such as introducing a new strategy or policy. The important point is that a single positive loop cannot exist forever as the resources to fulfill it in the system are limited, and at some point negative or balancing loops emerge.

We all get the results of the system we create (either on purpose or unconsciously). Identifying reinforcing loops therefore comes back to the results you are getting. Good results = positive loop Bad results = negative loop The key to assessing this impartially is having the data in the first place. You need a baseline and a desired direction. Only then can you see whether your system is working or not.

A reinforcing feedback loop (sometimes called a positive feedback loop because it increases the quantity in a stock) results from information about a stock that drives the inflow to the stock. In this case, the more quantity of the stock, the more the reported information of the quantity in the stock, which increases the inflow to the stock, reinforcing (increasing) the quantity in the stock. A stock represents a quantity of a resource that accumulates over time. For example, a stock could be the money in your bank account. This money increases when you earn interest (inflow), creating a reinforcing feedback loop.

Think of reinforcing loops as your system's amplifiers. They're like echo chambers, where the initial signal gets louder and louder, for better or worse. → Positive loop: Learn a skill, gain confidence, learn more, shine brighter. → Negative loop: Procrastinate, stress out, slow down, repeat. Spot these cycles by watching for snowballs rolling downhill or balloons soaring up. Whether they're launching you forward or pulling you back, understanding these loops gives you the power to tune your system just right.

Balancing loops are also called goal-seeking loops. It means these are the ones which push the system towards some specific goals, and try to modify its behavior based on the gap between the existing system situation and the defined goals. The simplest mechanism is that when gap is large, more effort is needed, and more effort means more achievement towards the goal, which reduces the gap! A simple structure which starts from an increasing gap, and leads to a decreasing gap. Pay attention that in systems thinking, we identify the impact of all links in a single loop by assuming all the other effects are constant. The role of simulation is to analyze the combined impact of all loops.

In my opinion, balancing loops are essential to create positive or negative forces within a system to drive change in the right direction at the top system level. It is important to monitor the impact of these forces continuously through diverse monitoring channels.

A balancing feedback loop (sometimes called a negative feedback loop because it decreases the quantity in a stock) results from information about a stock that drives the outflow from the stock. In this case, the more quantity of the stock, the more the reported information of the quantity in the stock, which increases the outflow to the stock, balancing (decreasing) the quantity in the stock. A stock represents a quantity of a resource that accumulates over time. For example, a stock could be the money in your bank account. This money decreases when you withdraw (outflow) based on your information about the quantity of money in your bank account.

Balancing loops are your system's regulators, keeping things in check. Imagine a seesaw that's constantly moving to find its balance. That's what these loops do for your goals. → Positive loop: Set a goal, notice the gap, take steps, and get closer to your dream. → Negative loop: Encounter a hurdle, feel scared, freeze up, and face even more hurdles. Look for the rhythm of back and forth, the dance towards equilibrium, or the give-and-take in your processes. Identifying these loops helps you navigate the tightrope, ensuring you don't sway too far off your path.

Effective mapping with causal loop diagrams (CLDs) is crucial in understanding feedback loops. - Understanding CLDs: They depict relationships in a system, showing how changes in one element impact another. - Identifying Loops: Reinforcing loops amplify effects, while balancing loops stabilise them. - Interpreting Connections: Follow the arrows to see cause and effect. This reveals potential impacts across the system. - Applying Insights: Use CLDs to foresee outcomes and identify strategic points for intervention, aligning your actions with your goals.

Your choice of information to drive the inflows or outflows to the stock relating to your goal influences the feedback to accomplish the goal. For instance, if your goal is to ensure a positive bank balance, using information about the quantity of credit available on your credit card (stock) to drive your spending (outflow) will hinder your goal because, at the end of the credit period, the card payments will cause withdrawals (outflow) from your bank account (stock). However, if you choose information about the quantity of money in your bank account, you will spend less and less as the bank balance gets smaller and smaller after each withdrawal, ensuring you do not hinder your goal.

How you can turn feedback loops into strategic tools for achieving your goals: 1. Amplify Reinforcing Loops: Strengthen positive loops through effective communication, incentives, and actions. This boosts growth and progress. 2. Align Balancing Loops: Harmonise these loops with your goals. Use goal-setting, continuous feedback, and learning for coordination and harmony. 3. Adapt to Dynamic Loops: Respond to complex loops with flexibility. Implement experimentation, innovation, and regular evaluations to stay agile and responsive. By mastering these steps, feedback loops evolve from system components into powerful allies for success.

From a theoretical perspective, leveraging loops can happen through identifying and influencing the leverage points. These are the points that can trigger change in multiple loops, where the loops gains can be potentially high. It means that there are loops that when we start from a variable in the loop and do one round, the impact of the loop on the chosen variable is significant. If a specific variable has an important impact on this significant change - or ideally has an important impact on multiple loop gains, then it is the best candidate for policy actions to directly influence it. Of course it needs iteration, innovation and policy design.

In my experience, making the most of feedback loops really helps in reaching our targets. Think of it like this: if you have a garden, you'd want to boost the things that help your plants grow (that's like amplifying good feedback loops). You'd ensure everything in the garden works well together (aligning those loops), and you'd be ready to change your plan if, say, there's unexpected weather (adapting to new feedback). By doing these steps—boosting what works, making sure everything's in sync, and being ready to change—you can guide your projects or goals in the right direction, just like steering a boat with the wind in your favor.

Feedback loops provide valuable insights about the actors that drive them. To learn from them, we must first understand what they represent. The actor's choice of information about the quantity of some stock to drive the inflow or outflow of that (or another) stock creates the feedback loop. It reflects the actor's value for the stocks they choose to influence and the stock whose information they use to drive the flows. This has valuable insights about the actor's purpose in engaging with the stocks and the influence the actor may have. Feedback loops also help us to identify counterintuitive behavior and the inability to maintain intended outcomes because of unintended consequences resulting from feedback responses to intended outcomes.

The whole idea of modeling systems thinking loops and structures, which are formalized in causal loop diagrams and System Dynamics models is to help us understand the combined impact of positive and negative feedback loops that when combined with delays, can create patterns such as S-shape behaviors, oscillation, overshoot and collapse. Understanding the structure behind these common patterns helps us to be able to control them, steer desired behaviors and induce change in the system by identifying the leverage points and make intervention in terms of new strategies, policies and strategic decisions.

Say your ideas out lout to someone who isn't involved in the project. They can hear and see things that you are biased to (or missing) that you can't see yourself.