Each approach has tradeoffs and benefits. This resource can be governed by community standards, privatization or effective regulation. The common, defined as community space – such as a town common, is a shared resource. The tragedy of commons: This is classic economic theory, described in terms of system thinking. Turn around times are on the order of 10 years, so there’s little historic data on fund manager’s performance. Shifting the burden: Notion that risk is shifted to someone else, while success is reaped by the actor.Įxample: venture capitalists and hedge fund managers work under a model where they get a nice base salary, a nice bonus if their fund performs well, but there is no downside for them. Pursuit of wrong goals will cause the system pursue these goals, capturing wrong or insignificant metrics, leaving the illusion of progress, while heading toward system collapse.Įxample: startups seeking to increase vanity metrics such as registered users and bookings instead of engagement and profits.
Many systems suffer from the fact that original goal don’t make any sense in the current context, or never did. Seeking wrong goals: Sometime goals change. The root cause for this sustained drift to low performance seems to be that soccer is used as a way to channel money from the government to private individuals, ie. All this even though the hungarian government is investing large amounts into the sport. Hungary used to have a very strong soccer culture, but over time quality decayed to the point where today, a draw or only getting defeated by 1 goal is considered a good result. Such resistance can cause inevitable collapse to be more dramatic, sometime even catastrophic.Įxample: US citizens resisting Obama’s gun control changes.ĭrift to low performance: The notion that prolonged failures causes acceptance of the new state of things, “new normal”.Įxample: a great example is soccer in Hungary. People would rather live with a flawed system that is familiar then to allow changes that might cause uncertainty and instability. Policy resistance: The inherent resistance of the establishment to allow changes to affect the system.
Here’s a list of the most interesting system traps from the book, with some examples. It’s really interesting to read about system traps and then notice and observe them in action: in micro environments such as a company and in macro environments such as an industry or a country. System traps are ways a system can go wrong. The gem of the book is the part about system traps. The book is conceptual, there’s not a single equation in it, it's not about differential equations or control theory. A system can be anything from a heating furnace to a social system.
Thinking in Systems, written by the late Donella Meadows, is a book about how to think about systems, how to control systems and how systems change and control themselves.