By Michelle Holliday
Here in Quebec, we are fortunate to have thousands of lakes. The tradition is to spend summer vacation splashing in the water at a 
lakeside cottage. Tragically, this tradition has been threatened in the past several years. Household use of phosphate-based lawn fertilizers and cleaning products has stimulated massive growth of blue-green algae in the lakes, which has choked out all other forms of aquatic life and turned the water toxic. It's poisonous enough to kill a dog.
It struck me one day how closely this situation mirrors the state of our financial system. We've over-stimulated growth to the point that all other forms of life are being choked out, and our biosphere has become toxic to us.
This isn't simply to say that we need to aim for zero-growth, as many in the sustainability movement propose. Physicist and author Fritjof Capra points out that, “Growth, of course, is characteristic of all life.” But he goes on to offer an important qualification: “[I]n the living world, it has not only a quantitative but also a qualitative meaning. For a human being, for example, to grow means to develop to maturity, not only by getting bigger, but also qualitatively through inner growth. The same is true for all living systems.”
How, then, do we develop an economic model that includes an appropriate level—and type—of growth?
Part of the solution may be found in a model called the Adaptive Cycle. Developed by Buzz Hollinger and elaborated by Frances Westley, the model shows that natural systems exhibit a continuous four-part process (typically depicted as a figure eight) of:
- Germination followed by
- Growth followed by
- Consolidation followed by
- Death and renewal, returning to germination, and so on.
In our economies, we have plenty of germination, growth, and consolidation. What our system generally lacks is sufficient death and renewal, with resources returned fully into the germination stage. The solution, then, may not be the total absence of growth—it may instead be a proportionate increase in economic death and renewal.
Getting more comfortable with the concept of death and renewal may not be as bad as it sounds. Some options might include:
- Producing only those goods that can be returned into the system fully and relatively quickly as germination (cradle-to-cradle manufacturing); making such “good” products cheap and “bad” products very expensive.
- Increasing the proportion of economic value generated by intangibles, which can germinate, grow, and consolidate without taxing the living system. This trend is already underway, both with the expansion of the technological and service sectors of the economy and with the individual shift toward meaning, experience, and connection.
- Reducing the pressure on companies to grow rapidly and incessantly (removing their legal obligation to do so, encouraging new forms of governance, such as cooperatives, and revising the general understanding of the purpose of organizations).
- Allowing failing companies to die so that the diversity of the economy is preserved—and so that society is not obligated to prop up companies that are “too big to fail.”
- Fundamentally reforming the financial industry (the debt and speculative markets, in particular) so that: (a) it no longer overstimulates growth unnaturally and faster than that growth can be processed through to renewal, and (b) it no longer jeopardizes an economy's resilience with excessive debt-to-GDP. See www.slowmoney.org for one example of how we might make this shift.
With changes of this sort, economic value could continue to grow without limit, but material production would ideally net out to zero growth, in what some economists refer to as “dynamic equilibrium” or a “steady-state economy.”
This vision raises the challenge of determining just how much growth would bring us to an equilibrium state. And it may be that the Earth will give us the answer. As it stands, when consumer spending falls, it triggers the US Federal Reserve Bank to lower interest rates in order to stimulate more spending. Instead, perhaps we'll need a system in which any reduction in the health of the biosphere would trigger a tightening of financial stimulus to growth.
Michelle Holliday has 20 years of experience in brand strategy, with particular expertise in authentic marketing. She founded Cambium Consulting after observing that the predominant organizational concepts and ways of working are neither optimal nor sustainable. And she is driven by the desire to help usher in an expanded set of beliefs and practices based on a view of organizations as living systems.
lake photo: Ian Britton
By Gregory Hennessy
There’s been a lot of media coverage lately about an apparent dispute between meteorologists and climatologists regarding the evidence of climate change (here's an example). Precipitating the most recent storm of opinion has been the release of a survey by the Center for Climate Change Communication at George Mason University. Of the nearly 600 members of the American 
Meteorological Society who completed at least part of the survey, nearly half responded that they did not believe global warming was happening (25%) or that they did not know whether it was happening (21%). Given the visible role that meteorologists play in informing the public (they are largely TV weather forecasters), their perspective plays an important role in how the public forms its opinions on climate change.
On several occasions, I have heard a meteorologist defend denial of climate change through some variation of the argument “I know all too well that beyond four or five days out, our forecast models are meaningless . . . how on Earth am I supposed to believe a model that goes 40 or more years into the future?” For example, see CNN’s Chad Myers. (In this particular clip, Mr. Myers goes so far as to accuse climatologists of inventing climate change for their own personal financial gain). And in a sense they are right—it would be foolish to use a short-term local forecast model to evaluate what might happen 40 or more years into the future. But that doesn’t mean that NO model can be used to forecast 40 years out.
The factors that go into modeling long-term trends and dynamics are different from those of modeling short-term dynamics. Different relationships are important. Different trade-offs matter. Different models are needed.
Consider business models. The model needed to manage a business over the next two weeks is different from the one needed to manage the next two months, which in turn is different from the one needed to manage the next two years. Over a two-week period, cash flow may be the most important consideration, and a good model is going to track expenses and income in meticulous detail. If my horizon is two months, finances still matter, but operational concerns are likely a more important element of the model. And while finances and operations will make an appearance in a strategic model looking at the next two years, competition, market changes, and technological evolution are bound to play a much more central role.
The two-week cash flow model will be largely worthless for forecasting cash flow two years out. Too much will have changed. But that does not negate the value and validity of a two-year model that focuses on long-term concerns.
We already know this, though. Even the climate change deniers know this. And here’s how. Suppose someone is a motor sports fan. Ask her to forecast the winner of the next big race. See if she thinks her forecasted winner is guaranteed to win. “Well, no, there are no guarantees” will be the likely answer. Then ask her to forecast the season champion. She will have no trouble identifying a small number of likely champions, maybe even just one or two. But how can she predict who will win the championship, if she can’t predict the winner of the next race?
You can do the same thing with any sports. Can you predict with certainty who the winners will be for this week’s baseball (or football or basketball) games? No. But does that stop you from predicting who will make the playoffs?
Card games, board games . . . you can use most any situation that plays out over time to highlight the fact that short-term forecasting is fundamentally different from long-term forecasting, and that limitations related to a short-term forecast in no way negate the ability to forecast over the longer term. Other factors might, but mere shortcomings of short-term models are not among them.
I don’t know about you, but I’m not going to listen to climatologists tell me about the weather over the next few days, and I’m not going to listen to meteorologists tell me about climate change.
Greg Hennessy is a consultant with Forio Business Simulations in San Francisco, CA. He has previously been an Engagement Manager at McKinsey & Company and was on the faculty of Shell Oil’s Learning Center. Greg earned an MS in management with a concentration in system dynamics and applied economics from MIT’s Sloan School of Management and an MS in social science from the California Institute of Technology.
Global Warming Predictions Map was prepared by Robert A. Rohde from publicly available data.
by Colleen Ponto
I went to see the movie Avatar Sunday night with my husband--a rare event for me on two counts: (1) seeing a movie, and (2) being with my husband without our kids. According to my three children,
this was a "Mom, you have to see this movie" movie. So I went.
Even though I am not an appreciative fan of science fiction, violence, or special effects, Avatar may just be one of those transformational films, a film that shifts human consciousness. There were so many systems principles embedded in Avatar. Concepts such as "everything is interconnected," "every solution creates new problems," "nothing exists independent of its relationships," "waste = food," "there is no 'away,'" and "information (or feedback) is the fuel of life" were key messages of this film. And one final systems principle came to mind as I left the theater--"you can never direct a living system to change, you can only disturb it." Avatar certainly was a "disturbing" movie.
During the car ride home, I asked my husband lots of questions about James Cameron, the director of the film (since I am not a moviegoer, I know very little about anyone in the film industry)--about who he is, his character, his political views, etc. He didn't know. And then in yesterday's Seattle Times, I found the following quote from James Cameron, a statement he made at the Annual Golden Globes Awards that addressed some of my questions:
"Avatar asks us to see that everything is connected, all human beings to each other, and us to the Earth. And if you have to go four and a half light years to another made-up planet to appreciate this miracle of the world that we have right here, well, you know what, that's the wonder of cinema right there, that's the magic."
Another systems thinking educator has successfully landed on center stage. Bravo, James Cameron, Bravo!
Colleen Ponto, Ed.D., teaches at Seattle University, where she is a core faculty member of the Organization Systems Renewal Graduate Program, which specializes in helping adult learners to become designers and leaders of systemic organizational change. Colleen is also an independent educational and organizational consultant. One of her current passions is teaching systems thinking to learners of all ages.
By Janice Molloy
"I suspect that all it would take would be some well-placed user-friendly feedback to change the world." --Donella Meadows
Think about the last time you undertook a change initiative, whether in your work or personal life. How did you measure progress toward your goal? How did you know when to make adjustments?
The answer in most cases is through feedback. When a company launches a new product, they monitor sales data and customer comments; this information, in turn, influences their marketing efforts and guides them in tweaking the product to better meet people's needs. Without data about the results of our efforts, it's impossible to evaluate performance, fine-tune improvement efforts, and gauge the success of different actions.
In one of my favorite columns by pioneering systems educator Donella Meadows, she recounted learning to drive more efficiently based on the feedback provided by the instrument panel of her gas-electric hybrid car (in "To Make Better Decisions, We Need Better Information," The Systems Thinker, V11N7, September 2000). By watching the indicator lights, she discovered that jackrabbit starts and stops ate away at her miles-per-gallon average; driving at the speed limit had the opposite effect. Meadows concluded, "Three weeks of information I never had before have changed 40 years of ingrained driving habits. I didn't have to be coerced or rewarded; I didn't have to change my values. I just had to see how my actions did and did not conform to my values."
Feedback also plays a vital role in change efforts that take place on a larger scale. In his latest book, Ecological Intelligence (Broadway Books, 2009), Daniel Goleman dedicates a chapter to "The Virtuous Cycle." He recounts how trans fats came to permeate the Western diet throughout the 20th century--and became an unknown contributor to heart disease. But once researchers discovered the dangers of hydrogenated oils, within the span of a decade, trans fats virtually vanished.
What caused this food revolution? According to Goleman, "The federal government never banned hydrogenated oils. No one told food companies they had to stop using trans fat. The crucial shift was in the information available to consumers." Once purchasers understood the dangers of trans fat and were able to use nutritional information on food labels to avoid it, they shifted their buying habits. Food manufacturers quickly responded by removing trans fat from their products and broadly advertising that fact. Consumers spoke, and the food industry listened.
These lessons about feedback continue to resonate today, especially as we head into the negotiations at the Copenhagen climate summit. Our friends at Climate Interactive have created the "Climate Scoreboard," a widget to help monitor the long-term consequences of policy proposals. It shows, in a simple visual form, the expected temperatures in 2100 if curre
nt proposals in the global climate negotiations were fully implemented and indicates how close those proposals bring us to achieving climate goals. When negotiating positions change, a team in Copenhagen will immediately update the analysis.
As in the case of driving more efficiently, this kind of dashboard allows us to see the results of our actions--and then modify them to achieve our goals. And as in the case of eliminating trans fats, the Climate Scoreboard gives us a tool for pressuring others--our elected officials, world leaders, the media, and so on--to ensure that any agreements they make are adequate to the challenges we face. As Daniel Goleman says, "All it takes is a bit of radical transparency."
Janice Molloy is content director of Pegasus Communications, managing editor of The Systems Thinker newsletter, and program director of the annual Systems Thinking in Action conference.
By Nalani Linder
How can we live well within the means of nature?
How can systems thinking support the kinds of teaching and dialogue necessary to inspire shifts away from unsustainable behavior?
These were two of the compelling questions I considered with a group of educators during the Sustainability Education Summer Institute (SESI) held a few weeks ago on Bainbridge Island, near Seattle.
About 175 people gathered for this inaugural event, which was based on a similar East-coast institute held earlier through the SoL Education Partnership. K-12 sustainability educators, pri
marily from the Pacific Northwest, came together to learn from each other and discuss how they've been implementing curricula and programs in their schools. It was a diverse group; the common bond was their passion for integrating sustainability in their classrooms.
I was there neither as a teacher nor as an expert in sustainability matters. I was there to present on systems thinking "basics," based on the workshop my colleagues and I present as "New Habits of Mind for New Solutions."
Because I'm used to having to "sell" the value of systems thinking to others, it was a treat to scan the agenda and see systems thinking and system dynamics offered side-by-side with resources for sustainability education. Event coordinator Gilda Wheeler shared the reasoning for the design: "We think that people don't need to understand all there is about sustainability issues to be a systems thinker, but it helps to understand basic ideas of systems thinking to really understand issues of sustainability." I knew this wasn't a new connection--after all, the original Limits to Growth was published nearly 40 years ago, and climate change simulations have been around for years. But it was still exciting to be a part of the SESI group, most of whom were learning about ST and SD for the first time.
One highlight for me was the first keynote, by Jaimie Cloud of The Cloud Institute for Sustainability Education. She talked about people's experience of her Fishing Game, an adaptation of Dennis Meadows's Fish Banks. Over many rounds of play, players try to catch fish to support their family while others are doing the same. A classic "Tragedy of the Commons" ensues, with everyone fishing more and more until the lake runs out of fish. Sure enough, Jaimie reported that whenever she facilitates the simulation, people regularly run out of fish before the game ends.
What I found particularly interesting is that, instead of focusing on the archetype as the learning, Jaimie used the story to highlight a subtle but powerful message: Don't confuse the mental model of scarcity with the idea of system limits. That is, notice the difference between the conventional thinking that there's not enough resources for everyone, and the thinking when we understand that there's a finite supply of resources and that supply depends on many variables, including some we can control.
The simple fishing example with its profound lesson about worldview and system dynamics seemed to hit home with this group of sustainability educators, and set the stage for further thinking about systems during the rest of the Institute.
Learnings for Systems Thinkers
Considering that I was not the target audience for the SESI, I walked away with several great learnings that I'd like to share with the Pegasus community.
As an individual, I learned more about the depth of what "sustainability" can mean and about the common myths about the sustainability movement that still exist. (Others interested in this idea of myths about sustainability can read the March 2009 article from Scientific American, Top 10 Myths About Sustainability.)
As a parent and community member, I learned about the challenges schools face in incorporating "sustainability thinking" into the curriculum and programming within limitations of budget, time, and staff bandwidth. At the same time, I was encouraged by stories of creative teachers and administrators who have found points of leverage and are implementing inspiring changes.
As a relatively new systems thinking trainer/advocate, I learned that people who are passionate about sustainability are an easy audience for introducing the language, principles, and tools of systems thinking. They seem to have an intuitive understanding of the concepts of limits and circular causality, interconnectedness, and change over time. The systems thinking material that they were presented seemed to give a framework for what they already know to be true about living systems.
This event was the first of its kind in Washington State, and there's already talk about next year's conference. I'm heartened by the ever-developing connection between sustainability education and systems thinking, and how the growing work in the former will boost visibility of the latter. When I was leaving the Institute, one of the participants told me he thought that understanding systems thinking was a "critically important part" of the ongoing work of sustainability education. Now that's a promising piece of feedback, indeed.
Nalani Linder studied systems thinking in her Master's program, Organization Systems Renewal (now at Seattle University). She is active in a community of practice for ST trainers at The Boeing Company, and is co-leading the teams program at this year's Pegasus Conference. Nalani is also working on a research project about MBTI typologies and systems thinking aptitude.
photo of fern: Nancy Daugherty
By Greg Hennessy
The 2009 International Conference of the System Dynamics Society was recently held in Albuquerque, NM. I was a member of the Society throughout much of the 1990s and attended several of
the conferences. Work demands and personal considerations lead me to neglect the annual meeting for the last 10 years. But a renewed professional focus on system dynamics led me to signing up for this year's conference, and I felt both excitement and a bit of trepidation--the Society had been very "cliquey," and I had mixed feelings about my prior involvement.
Many of the old guard were in attendance, men from whom I learned so much. Some, like John Sterman and Dennis Meadows, I have worked with directly. Others, like George Richardson, Peter Milling, and Jac Vennix, have influenced me more than they will ever know, even though I've only met them briefly once or twice. I was reminded of what a truly amazing community the Society is.
There were also many new faces . . . a great many. The poster session, which at the 1993 conference in Cancun consisted of a handful of static presentations, ran fully down two sides of the plenary ballroom. There must have been at least 100 posters presenting the findings of roughly twice that many authors, spanning an amazing range of problems. And while the Society's conferences have always had an impressive international representation, it used to be weighted toward a handful of universities in the U.S. and Europe. In Albuquerque, I saw an inspiring range of affiliations. Every continent was represented, most amply. (To be fair, I did not see anyone with an "Antarctic" hometown listed on their badge. But I did overhear someone talking about time spent on the southern continent.)
It was also terrific to see the range of demographic diversity at the conference. Like every person I've ever met with a systems perspective, I firmly believe that diversity provides a means to polish our lens on the world. And the Society will only benefit from the breadth of perspectives that are being brought into the community.
The plenary sessions were by and large very good. A few speakers could have reduced their speed or bombast . . . or both. But most were well done, and several were truly inspiring. The conference was bookended by keynotes from Dennis Meadows and John Sterman. Both spoke about global climate change, but each with his own take on how to address it. Seemingly resigned to the inevitable, Meadows gave a sobering presentation that emphasized the need to help communities adapt to the oncoming changes. Sterman rallied the assembled troops, calling on the spirit of Dana Meadows, to insist that we have "exactly the right amount of time we need." His presentation of the C-ROADS model (a decision-support computer simulation model that allows policy makers to vary assumptions about carbon emissions and see the long-term results) provided hope to many that we might yet get the policy changes needed to avoid the worst effects of climate change. While some may debate which point of view is right or more useful, I plan to call upon each, as appropriate, to keep me focused on the job ahead.
Other plenary standouts included an exploration of healthcare policy reform issues, presented by Bobby Milstein of the Centers for Disease Control and Prevention, Jack Homer, and Gary Hirsch; a pair of interesting presentations on psychology and social dynamics; and an exploration of pandemic influenza using agent-based modeling, by Robert Glass of Sandia Labs.
The parallel sessions were, perhaps naturally, a mixed bag. But the selection committee did a good job at sorting the presentations and presenters into cohesive hour-long sessions. It is simply amazing to catch one of the "rock stars" talking to a small group of 30 or 40, and probably more exciting to catch one of the up-and-comers.
Next year's conference will be in Seoul, Korea. I'm not sure if I'll be able to make it. But I bet it'll be worth the trip.
Greg Hennessy is a consultant with the Systems Thinking Collaborative and teaches at St. Edward's University in Austin, Texas. He studied System Dynamics at MIT and will be starting the doctoral program in Environmental Science at UNLV in January 2010.
By Janice Molloy
Our Spidey sense here at Pegasus tingles whenever anyone in the mainstream media hints at systems principles in action, but especially when it's someone like Nobel prize-winnin
g economist Paul Krugman. On Sunday, July 13, Krugman's weekly op-ed column in the New York Times appeared with the title, "Boiling the Frog."
The parable of the boiling frog is often used to illustrate the "Drifting Goals" systems archetype (see the recent blog post, "Keeping Performance Up to Speed"). According to the (likely apocryphal) story, if you toss a frog into a pot of boiling water, it will immediately try to jump out. On the other hand, if you put it in cold water and then gradually raise the temperature, the frog will happily swim around until it--there's no delicate way to put this--cooks. The frog's survival instincts are geared toward detecting dramatic changes, not incremental ones.
In his column, Krugman uses the boiling frog as a metaphor for "the difficulty of responding to disasters that creep up on you a bit at a time"--specifically with regards to the current complacency in the U.S. around the economy and the environment. With no dramatic meltdown imminent, policy makers and citizens seem to have lost the will for decisive action on either of these fronts, despite unemployment and sea levels that continue to rise. As Krugman goes on to say, "These are both areas in which there is a substantial lag before policy actions have their full effect--a year or more in the case of the economy, decades in the case of the planet--yet in which it's very hard to get people to do what it takes to head off a catastrophe foretold."
In Systems Archetype Basics, Daniel H. Kim and Virginia Anderson list a number of ways to manage the "Drifting Goals" structure, including:
- Identify what's drifting.
- Check for competing goals.
- Identify what's driving the setting of goals.
- Explore procedures for correcting gaps.
- Reestablish the organization's vision.
In the case of the economy and the environment, this last item seems to hold the highest leverage. It involves recommitting to the quality of life we want for our citizens and the legacy we intend to leave for our children and grandchildren. Once we are clear about our collective goals, the challenge becomes deciding what actions we need to take now--rather than waiting until it is too late for us to jump out of the pot.
Janice Molloy is content director of Pegasus Communications and managing editor of The Systems Thinker.
frog photo by Ren West
By Janice Molloy
Can a computer model help save the planet? The folks at Climate Interactive, an initiative out of Sustainability Institute, are counting on it.
System dynamicists have been spreading the word about sustainability since the publication of Limits to Growth in 1972. So it comes as no surprise that a group of MIT-trained modelers has teamed with experts from other fields to create an ever-growing set of user-friendly, scientifically grounded climate change simulators.
The goal of Climate Interactive is to provide fast, accurate answers to "what if" questions so that decision makers and others can see the results of different scenarios on carbon emissions, atmospheric carbon levels, and temperature. This information can then inform policy discussions at all levels--from U.N. negotiations to high-school classrooms. CI is also sharing their analytical tools using open source approaches so that others can adapt, incorporate, and build on them.
The online version of CI's primary simulator, Climate Rapid Overview and Decision-support Simulator (C-ROADS), was released today. Two other free simulators are already available: The Climate Bathtub Animation and MIT's Greenhouse Gas Simulator. CI also has a blog, written by long-time Pegasus contributors Drew Jones and Beth Sawin.
Try the "sims" and send the CI folks your feedback!