Systems Thinking and System Dynamics


Systems thinking has developed out of the work of Jay Forrester and more recently Peter Senge. There are seven key principles which are at the centre of Systems Thinking. An understanding of these is developed in the education phase of the consulting assignment. A systems perspective sees the world as a complex net of interactions. Some elements of the net are more closely inter-connected than others. An understanding of these relationships leads to the ability to see how activities in any one part of the system will impact on other parts.

All events are ultimately connected. Nothing ever happens that does not have an impact in other parts of the system. “When a butterfly flaps its wings in Siberia, it snows in Darwin.” Systems Thinking is an intellectual (and computer based) technology which provides the tools to understand the complex inter-relationships that exist in any system.

Systems Thinking leads to the examination of the “mental models” through which people view the world and upon which they base their actions. It is only through a rigorous examination and re-alignment of mental models that lasting and significant change can be brought about. Systems Thinking provides a methodology and syntax for this process. The core concerns of Systems Thinking are examination of long term behaviour over time and an appreciation

The key concepts are:


Causation is the key element, hence Causal Loop Diagrams. Unlike flow charts which seek to set events out in order, Systems Thinkers explain systems in terms of sequences of cause and effect.


Systems are non-linear, so their performance today is a result of feedback from what happened yesterday. Populations of rabbits are a result (amongst other things) of the size of the previous generation.

Variation Over Time.

Systems Thinkers measure accumulations and vary over time. These accumulations (called stocks) can be money, goods, motivation, customers. Understanding what causes changes in the levels of these stocks is central to Systems Thinking.

Balancing and Re-inforcing Loops.

When building the causal loops it becomes clear that some loops tend to bring the system into balance while others re-inforce or accelerate the conditions they describe.

 Leverage Points.

These are the points in the system where the greatest leverage for change can be achieved. They are what the economists would call the “Policy Levers”


There are always lags in any system. Often the implications of a policy decision will not become obvious for a long tome. The CFCs released today will not impact the ozone layer for 15 years. Thus, the effect of today’s policy decisions (or non-decisions) will have a 15-year lag.

Policy is often Counter-Intuitive.

Policy decisions do not always work in the way policy makers expect them. Often they work in quite the opposite or different way. Policy can be “Policy in Action” or “Espoused Policy”