Archiv der Kategorie: Interconnected thinking

In this area it is all about systemic thinking, chaos and complexity.

Input-Process-Output versus Causal loops

The following text provides some examples for a discussion on Linkedin ( http://ow.ly/xQAJl ). The discussion is turning around the following example http://ow.ly/xQBE6 .

1)       Input-Process-Output Diagram (IPO)

The IPO is focused more on the What-is-needed than the How-to-do-it. For this purpose, the diagram consists of three elements: Input, Process, and Output.

The Input provides all aspects that are required to do the Process. This can be information, controls, resources and other things. In the example these are controls (recipe), resources (teapot, water heater, and cook), and other things (water, tea bags, and energy).

The Process defines the functions. In this case, on the highest level the ‘Tea making’ function.

The Output documents the results of the Process. The outcomes are tea, dirty tools and unused energy.

Based on this diagram, it is possible to set up a process with all relevant elements. Usually this diagram is drilled down to an operational level with various diagrams.

teapotIPO e

2)       Causal loop

The causal loop is focused on What-is-happening. For this purpose, the system is described with variables and links.

The variables are indicators of states (usually revenue, qualities, costs, acceptance). In our example availability and amounts. These parameters are affected by the links.

The links document dependencies of two kinds. These can be increases or decreases. The resulting affect is defined as a change of the receiving indicator in the same direction as the sender (+) or on the opposite direction (-). In our example the more water that is available, the more water can be boiled (+). The more water that is boiled, the less water is available (-).

Based on this diagram, the behavior over time of the system can be examined.

teapotsys e

Bottom line: The purpose of the IPO is more likely the implementation of the process. The intention of the causal loop is to understand the behavior over time. You cannot swap functionality.

P.S.: Systems Thinking is an established way to look at systems of all kind. Here are some pioneers – Fritjof Capra, Peter Senge, Daniel Kim, Donella Meadows, Frederic Vester, Harmut Bossel.

Growth happens at the expense of others

Growth evolves in enterprises towards the one, determining key figure. All efforts serve only to increase profit, revenue, market shares, and productivity. The system is part of an environment, has defined borders and exchanges energy with other systems. Within the system, the subsystems also exchange energy.

Where does the energy for growth actually come from?

Wachstum

Examples of systems are:

  • Living organisms that need food;
  • Machines that require fuel;
  • River systems that swell with tributary rivers and rains;
  • Families that become larger through offspring;
  • Enterprises that expand.

In principle, any growth is created by adding energy from the outside. Creatures have their energy through wining and dining. If food is missing for a long time, the organism dies. The car that is not refueled stops. As soon as creeks and other rivers dry up and the rain is absent, a river drains. Families without descendants become extinct. Enterprises enlarge by opening up new markets, by pushing competitors out of the market or by purchasing enterprises. Within the system, the energy likewise shifts, i.e. gets rearranged. Thereby individual subsystems grow. However, the total energy of the system does not increase. The reallocation even leads to a loss of energy that results from the efforts for the change.

In the enterprise, this shift of energy appears in many places.

  • With the takeover of enterprises the revenue, the profits, the market penetration, the procurement volume and the number of employees grow at the expense of the related investments and the employees that do not ‘survive’ the fusion.
  • The reorganization of processes costs the energy of the change efforts and the employees, who are loosing their tasks.
  • New technologies come from the outside and produce drain of energy in the form of cash flow. Beyond that, the employees again pay part of the bill with the loss of their tasks, either if they are transferred or dismissed.

Bottom line: For growth, you need energy form outside. Any growth happens at the expense of others. Internal growth yield no results to the overall system, because energy moves only from the right into the left pocket or gets simply lost through the efforts.