This week I read an amazing work by Donella H Meadows called Thinking In Systems. Meadows wrote this book quietly over a period of many years during her career as a scientist at MIT and Dartmouth. After dying unexpectedly, her colleagues decided to publish her thoughts via a non-profit to honor her career and work.
Meadows takes the subject of systems – usually a highly mathematical and statistics-based subject – and breaks it down into a book that anyone can absorb and appreciate. Meadows is not advocating that systems are simple (quite the opposite). Her message is that all systems are inherently complex, but the first step in moving toward a world that thinks systematically is recognizing that systems exist and that they all share common, understandable attributes.
The relevance of systems becomes immediately clear on the first page of the book where Meadows defines them at their simplest level:
“…A system is an interconnected set of elements that is coherently organized in a way that achieves something..A school is a system, and a factory, and a corporation, and a national economy. An animal is a system. A tree is a system, and a forest is a larger system that encompasses subystems of trees and animals…“
The lessons that can be taken from this book are infinite, and I could quote from every page. But for the purpose of this week’s digest, I’ll share two powerful systems characteristics that appealed to my investor side, and I hope will appeal to you, too.
First is the subject of what Meadows calls “intrinsic responsibility”, or in simpler terms, ways in which a system can create its own behavior. As small business investors, my colleagues and I are always thinking about this idea as it relates to the sustainability of an enterprise, its employees, and its processes. Meadows offers some examples that illustrate the simplicity and power of this concept:
“…Designing a system for intrinsic responsibility could mean, for example, requiring all towns or companies that emit wastewater into a stream to place their intake pipes downstream from their outflow pipe. It could mean that neither insurance companies nor public funds should pay for medical costs resulting from smoking or accidents in which a motorcycle rider didn’t wear a helmet…It could mean congress would no longer be allowed to legislate rules from which it exempts itself..”
These are powerful examples of a system whose feedback loops continually govern and guide the system toward a better, more sustainable future. Reading these examples, it struck me how unnatural it is for humans to think and design systems in this way, and what a shame that is.
The second idea that stood out to me is what Meadows terms “Listening to the wisdom of the system”. Here, she is advocating for systems thinkers to make understanding the system their first goal, rather than the blind intervention that is so natural for most of us.
“…Aid and encourage the forces and structures that help the system run itself. Notice how many of those forces and structures are at the bottom of the hierarchy. Don’t be an unthinking intervenor and destroy the system’s own self-maintenance capacities. Before you charge in to make things better, pay attention to the value of what’s already there…”
Recognizing the wisdom in a system should be seen as a precursor for intruding upon, modifying, or re-designing it. Only after we understand a system’s true state can we improve it by improving feedback loops that allow it to prosper. Sometimes, it might behoove us to leave well enough alone.
On a personal note, I can’t remember having read a book with so many practical applications to different parts of my life. This one will sit on the ValueStreet shelf for a long time and I need to thank my associate Cody Patrick for bringing it to my attention.
See you next week,
James and the ValueStreet Team