Executives today are constantly seeking to predict how their organizations and the marketplace will behave. But because many leaders continue to use traditional reductionist methods to understand organizational behavior ones that focus more on symptoms than on causes of a company’s success they fail to gain real insight into how to build and sustain that success. The result is often reactive, crisis driven management with unanticipated side effects and unforeseen outcomes.

Contrary to this rigid perception of organizations as predictable machines, some management thinkers have come to view them as complex and evolving organisms. Accordingly, the tendency in the business world to define companies in terms of simple formulas and numerical results is slowly being replaced by the recognition that, to be effective in leading organizations, we must think of them in terms of the underlying structures and dynamic patterns of behavior that produce those results. In other words, we must begin to complement or replace linear thinking about how our businesses work with nonlinear approaches by applying the principles and tools of system dynamics.

System Dynamics Theory

Why do so many brilliant management strategies lead firms directly into decline or not produce the anticipated results?

In his classic 1961 book Industrial Dynamics, Massachusetts Institute of Technology professor Jay Forrester originated the ideas and methodology of system dynamics. He pointed out that the traditional approaches of the management sciences could not satisfactorily explain the causes of corporate growth or decline because they focused on simply explaining behavior. He believed that a system’s behavior is actually a product of its structure and that leaders should seek to identify where changes in structure might lead to significant, enduring improvements. They could then design organizational policies and processes that would lead to even greater success.

In order for managers to undertake this design process, Forrester advocated that they must analyze their organizations using dynamic models. For this purpose, he developed tools such as causal loop and stock and flow diagrams. These tools serve to illustrate the interconnected feedback loops that form a complex system. By identifying these feedback loops, management can figure out a system’s basic patterns of behavior, which include growth(caused by positive feedback), balance(caused by negative feedback), oscillations(caused by negative feedback combined with a time delay), and further complex interconnections.

Applied to organizations, this way of thinking challenges the notion of measuring success only through financial results. Because people can see financial results, they think they have control over them. But these results are actually produced by the organization’s underlying structures. These structures consist of:

• Organizational Architecture: the basic organizational design (such as the functions or divisions that the company includes) and the governance system (such as the planning and control system)
• Organizational Routines: standard operating procedures, decision making processes, behavioral archetypes
• Tangible and Intangible Resources: financial capital, human resources, buildings, machinery, land, brands
• Organizational Knowledge and Value Base: patents, core competencies, cultural beliefs, attitudes

When we focus on systemic structures and behavioral patterns, we gain the knowledge to design our organizations to produce desirable day-to-day results in areas such as profits, employee motivation, customer satisfaction, and so on (see, “Structure, Behavior, and Results”). The basic idea of the dynamic approach is that, although people shape their organizations, their behavior is ultimately influenced, and therefore limited, by the organizational framework in which they operate. Consequently, leadership means much more than optimizing businesses for short-term outcomes; it involves creating and cultivating structures and enabling organizational behaviors that guarantee the viability of the whole firm. Therefore, in order to manage their organizations successfully, leaders must realize that the best way to achieve sustainable results is not by relying only on what they see or measure but by:

• Describing and assessing the observable behavior of the system;
• Understanding the interdependencies between a system’s behavior and its underlying structure;
• Making assumptions about and modeling these interdependencies using system dynamics tools; and
• Finding and implementing policies to redesign the structure of the system in order to improve its performance.

Building on this system dynamics foundation, we propose to take leadership one step further, to what we call evolutionary leadership. The natural process of evolution offers a compelling model of how leaders might intentionally design and guide growth and balancing processes to create a viable organization. Evolutionary leadership involves the deliberate interplay of two management functions: strategic management (designing structures and processes that stimulate growth) and management control (guiding the external and internal factors that regulate growth). But before we explore the synergy between these two functions, we need to talk about how evolution works in nature and in organizations.

Evolutionary Theory in Organizations

Evolutionary theory has been the predominant paradigm in natural sciences for more than a century. Recently, theorists and practitioners in the social and management sciences have begun to adopt the ideas of evolutionary theory as a framework for describing and analyzing organizational development. The basic concept these pioneers have set forth is that processes of variation, selection, and retention as well as the struggle for scarce resources trigger the evolution of an organization.

Sociocultural evolution differs from biological evolution in that it allows for the intentional variation and selection of ideas. In this context, an organization’s fitness its “viability,” or ability to survive and thrive depends on how its decisions and strategies affect its position in product and resource markets and on its legitimacy from the point of view of important stakeholders. Chilean neurobiologists Humberto Maturana and Francisco Varela have deeply influenced thinking about viability with their theory that living systems are complex systems that can self-generate. A system dies when it loses its ability to renew itself. In the business world, a company that fails to renew itself by changing its strategic orientation and/or internal structure in response to shifting conditions will die. In contrast, a viable organization is one that can continually create its own future and there by assure its fitness in an evolutionary sense.

But how does a viable organism develop this capacity to self generate? According to Maturana and Varela, it happens when the organism

• Preserves its identify by repeatedly drawing system boundaries (i.e., defining what is “internal” and, “external”); and
• Maintains its ability to adapt to a changing environment.

Within ever-changing environments, external forces constantly threaten the existence of a species by altering its living space. To survive, a species must adapt to the changing conditions successfully without losing its identity. For example, in nature, many kinds of birds have adapted from natural to urban environments, but not all have managed to do so. In the banking industry, banks have profoundly shifted their strategies in the past decade in response to technology changes and new competitors. Many brick and mortar institutions have gone “virtual.” In doing so, they are able to maintain their existence by simultaneously preserving their identity while adapting their strategy and structure to a changing environment.

The key to an organization’s survival lies in mastering the trade-off between preserving its identity and adapting to a changing environment. Leaders do so through strategic thinking and acting, and by asking how they can maintain the fit of the organizational structure and its environment. There are two ways to achieve this goal:

• Maintain your identity and structure and avoid fundamental adaptations by changing the environment or searching for an appropriate new environment.
• Fundamentally change your structure and redefine your identity to reestablish a fit between the organization and its ever changing environment.

In reality, most organizations choose adaptation strategies that lie somewhere between these two extremes.

Organizations can only make alterations to the extent that their structures and resources make modifications possible. A firm has a good chance to successfully adapt to a changing environment when it has a strong learning capacity, that is, the ability to anticipate, influence, and quickly react to environmental changes, along with the ability to recognize, vary, and advance the underlying mechanisms of the learning process itself. For example, Shell Oil enhances its learning capacity by combining strategic planning and organizational learning through scenario planning. Scenario planning provides a mechanism for thinking in alternatives and making underlying assumptions explicit. This process reduces the company’s risk of encountering negative surprises and increases the speed with which it can implement changes. In short, organizational learning is a dynamic feedback process that can help organizations remain viable and therefore survive the external pressures of natural selection (see “The Evolutionary Cycle in Organizations”).

Growth and Balance

In addition to having the ability to adapt and learn, systems must be able to grow. Generally speaking, growing means incorporating more and more available resources like nutrients for a plant or natural or human resources for a company in order to become larger and larger. For a company, growth can mean an increase in market share or market value. But is growth in itself sufficient for survival? Clearly, the answer is no, because nothing grows forever. But where and what are the limits to growth?

In nature, reinforcing processes, such as population growth, are slowed by balancing processes, such as limited food supplies and the spread of diseases. If normal balancing processes aren’t blocked and assert themselves before a population reaches the limits of its habitat, that species can maintain a harmonious relationship with its environment. Such balancing processes ensure that the evolving system remains within a viable range of activities, in this case, healthy population density. Indeed, these balancing processes are more crucial than reinforcing processes, in that they keep the overall system alive. If, on the other hand, important balancing processes are missing, the species might become extinct by overtaxing the resources in its environment.

Are there similar natural boundaries to the development of social systems? The answer is yes. For example, a firm’s development can be limited by its production capacity, the size of its market, or the number of its competitors. The faster the company grows, the more rapidly it reaches these boundaries. From time to time, such limits to growth can change. For example, shifts in market conditions, such as those created by the Internet boom or the world oil crisis of the 1970s, can increase or decrease the time it takes an organization to reach a certain limit, unless people find ways to use their limited resources more efficiently.

We can say that an organization is evolving when its configuration, routines, tangible and intangible resources, knowledge, and value base develop in accordance with the changing external environment. Scientists now know that most healthy living systems follow a developmental path described as punctuated equilibrium periods of balanced growth that are interrupted by periods of exponential growth (see “The Stages of Organizational Evolution” on p. 4).

We regularly underestimate the tremendous power of exponential, or reinforcing, growth. We tend to assume that growth is linear and increases consistently over time. However, exponential growth happens much more precipitously. If we observe the two over a short period of time, exponential growth approximates linear growth. Over a longer period, however, the gap between the two becomes enormous.

Because human beings tend to perceive short term rather than long-term changes, we often reach the boundaries of exponential growth faster than we anticipated, often completely unexpectedly. We see this happen to companies when booming success is followed by equally dramatic failure. For example, cellular telephone companies experienced this phenomenon when they projected that their sales would continue to increase at a high level. But they eventually saturated the market and experienced declining sales. For this reason, unless we understand and anticipate the impact and boundaries of exponential growth, we will have a distorted perception of the evolutionary process, leading to unpleasant surprises and even to an existential crisis for the whole enterprise.

Organizations sustain themselves when they attain a balanced evolution off setting reinforcing growth action with timely balancing impulses. Sustaining this balance is the only way to ensure that companies remain in the realm of “sound growth” as they develop and that they don’t exceed the limits of their environment or resources. Balanced evolution plays an especially critical role during periods of exponential growth, when the organization is at a much higher risk of losing its viability than in periods of balanced growth, when the stakes aren’t as high.

For example, when a leap in growth occurs for a limited time(through external factors such as deregulation or new developments in technology, or through internal factors such as changes in top management or a merger and acquisition), leaders need to off set that growth by intentionally introducing balancing feedback loops. They can do so through control and coordination systems as well as productivity enhancement programs. These loops keep the organization’s growth from consuming the company.

Leadership in Organizational Evolution

But how can leaders help firms achieve the balanced growth they need to evolve? Through strategic management, leaders expand the business; through management control, they regulate the growth process, making sure that it remains within a sustainable range. Together, the two functions form a balanced leadership cycle for guiding and controlling the company’s evolution.

Strategic Management. Through strategic management, leaders cultivate the conditions for a company’s sustainable growth. Specifically, they perform the following three functions:

1. Set Direction. As mentioned earlier, leaders need to preserve or redefine the organization’s core identity and develop its structures in ways that lead to lasting success. They do so by communicating the company’s values and beliefs to employees and external stakeholders through shared vision and mission statements, and by strengthening internal rein forcing processes such as employee morale. They also formulate and implement strategy, not by detailing a map of action but rather by defining a corridor of learning opportunities.
2. Build Resources. Leaders need resources to support entrepreneurial activity. They can acquire them externally (such as machinery or capital) or develop them internally (such as people or policies). From a resource based perspective, only internally built resources can provide the basis for competitive advantages and above average returns, because they are specific to the company and therefore more difficult to imitate. On the other hand, resources that are available on the open market are available to all competitors.
3. Create Infrastructure. Leaders must not attempt to drive growth but rather to influence the factors that can block or support it. As such, they need to design an organizational context that eliminates barriers to company development (such as fear, distrust, centralized decision making, too tight control, and insufficient resources) and develop processes to promote learning (such as organizing flexible teams, supporting communities of practice, creating incentive systems for transferring knowledge, and creating learning spaces).

From a system dynamics perspective, these three functions combine to form a reinforcing process called the “Strategic Management Loop,” which strengthens the company’s growth(see “The Balanced Leadership Cycle”). But for the organization to remain viable, this reinforcing loop must be reined in by balancing processes, such as those that make up the “Management Control Loop.”

Management Control. Management control acts to bring equilibrium to the expanding system. To do so, leaders must perform three central functions:

1. Assure Internal Consistency of Infrastructure, Resources, and Direction. Leaders need to maintain the coherence of a system, particularly in large companies where management functions often get split among different organizational units or departments. To handle this specialization of functions, they must synchronize the development of strategy, resources, structure, and systems. They do so by working with others to develop a shared view of the system, which acts as a basis of companywide activity. However, this model is necessarily a subjective simplification of complex reality, so it can easily become selective and distorted.
2. Compensate for Selective Perception. Therefore, leaders and their teams must compensate for their selective perception by continually enriching their assumptions with relevant new information and challenging their mental models. For example, they might use management information and decision support systems, which provide comprehensive data and make blind spots of organizational perception visible. Management control thus leads to more informed decision making and better anticipation of the consequences of those decisions.
3. Appropriately Limit Developmental Dynamics. Designing appropriate limits on developmental dynamics involves two realms: content and time. Leaders must analyze whether the firm’s expansion exceeds the limits set by its internal conditions (for instance, the number of staff with expertise in certain areas) and the external forces of its environment (for example, the size of the market), thus endangering its boundaries. They also must regulate how fast the firm grows. They do so by pacing the speed of growth so it doesn’t over tax the current management capacity (resources and infrastructure) or environmental limits (size and growth of the market).

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Leaders put these functions into action using different diagnostic tools, such as the balanced score card and budgeting. The balanced scorecard helps them see the inter connections among the key measures of the business, for instance, between employee capacity and customer satisfaction, or between customer satisfaction and market share. Executives can then ensure that key measures stay in balance. Through the budgeting process, they translate strategic direction into financial objectives, setting the frame work for the allocation of resources and the utilization of infrastructures to assure internal consistency. By limiting and balancing developmental dynamics as well as by assuring internal consistency, these tools contribute to the fulfillment of the management control function in the balanced leadership cycle.

In order to avoid survival threatening oscillations between growth and decline, leaders need to take into account the time delays that occur before balancing impulses take effect. Working properly, the interplay of strategic management (growth actions) and management control (balancing impulses) assures a synergistic rhythm of a company’s evolution, a characteristic of particularly successful firms in dynamic environments.

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1) Working on a range of actions to achieve some long-term outcome, for example, “in order to reduce urban poverty, we are going to start a microlending program, provide mentors to young people, and advertise to external investors,”

or

2) Implementing a policy that they believe will have broad, positive effects, for example, “by improving the efficiency of energy use, we can reduce air pollution, save money for businesses, and reduce greenhouse gas emissions.”

They look to systems thinking for some specific help in addressing questions such as, How can our team test our thinking about the best way to achieve our goals? How can we strengthen our strategy and achieve more success with less energy? And how can we avoid unintended consequences or “push-back” from the system?

To help a group respond to those queries, we lead them through a structured process that we are calling “action-to-outcome” mapping. We have found this approach particularly useful in situations where a team has already chosen a set of actions intended to achieve specific outcomes within an uncertain environment. This process can stand alone or lead to a more expansive effort to map, understand, and formally model the system in which the group is operating.

While we have used several variations, the core of our action-to-outcome mapping process involves five steps:

1. Exploring the existing causal theory,
2. Adding feedback,
3. Uncovering critical mindsets,
4. Accounting for external forces, and
5. Looking for opportunities for learning and action.

1. Exploring the Existing Causal Theory. The existing causal theory is the set of assumptions — explicit or implicit — that group members have about how their actions will lead to desired outcomes. The first step in the mapping process is to articulate those actions and outcomes and create a map connecting the two. By creating this kind of diagram, the group maps out the chain of cause-and-effect that would need to happen to achieve the desired outcome.

WATER CONSERVATION EFFORTS

This simplified causal map shows a proposed water conservation strategy in a particular region, including actions, intermediate indicators of success, and longer-term outcomes. Intermediate indicators are critical in situations where progress toward the ultimate goal happens very slowly and is influenced by many factors.

For example, “Water Conservation Efforts” shows a simplified causal map of a water conservation strategy in a particular region. In this case, the group was considering various actions to improve water management. Team members figured that writing and sharing case studies of urban water utilities with successful water conservation programs would encourage local utilities to follow suit. They hoped these companies would use conservation technologies to reduce water use and create a host of long-term benefits such as higher water levels in rivers.

We have also found it important to identify intermediate indicators that the group can use to measure progress. These are short-term changes in the system that show if the effort is on track. In the example described above, because water levels in rivers are difficult to connect to conservation efforts, the group’s intermediate indicator was “Per-Capita Water Use.” Such indicators are critical in situations where progress toward the ultimate goal happens very slowly and is influenced by many factors.

Reflection questions: Looking at the set of assumptions that link actions to outcomes, what causal connections do you have confidence in? Which are the most uncertain or unknown? Considering these questions helps target the rest of the discussion and identifies research that might be useful to improve the group’s confidence in the overall strategy.

2. Adding Feedback. By starting with the simple, one-way causal chain created in the first step, we can begin to identify important reinforcing or balancing feedback loops that the group’s actions may trigger. We start by looking for ways that the actions or results may get amplified through reinforcing loops. For example, as shown in the reinforcing loop in “Water Conservation Efforts,” success in a water conservation program could lead to public awareness of that success and positive word of mouth in the community, building public support and boosting the water utility effort even more. We then look for ways to strengthen that loop, for example, by writing editorials to the local newspaper to build the public’s awareness of the effectiveness of the water conservation program.

It is equally important to understand how the system can resist change or push back on the group’s effort through balancing loops. The balancing loop in “Water Conservation Efforts” shows how endeavors to introduce water conservation technologies in the Southwest of the United States were undermined by their own success. The implementation of conservation technologies for landscaping, indoor plumbing, and industry actually reduced water use. But because water availability was the primary limit to residential construction, reduced withdrawals meant that there was more water available to supply new development. New homes boosted the number of total water users, consuming most of the saved water and increasing total water use. This “compensating feedback” undid the positive effects of the overall effort and frustrated many advocates for water conservation.

Thus, the mapping revealed not only a possible problem that the team needs to address in the strategy, but also an important disconnect between the intermediate indicators — the amount of water saved through conservation efforts—and the long-term goal of improved stream flow and ecosystem health. In the Southwest, leaders have started to advocate for dedicating some fraction of saved water to increasing water levels in rivers.

Reflection questions: Are there any reinforcing loops that would amplify the effects of your actions? Can they be strengthened? Are there any balancing loops that cause the system to resist your efforts? Can they be weakened? Are there any feedback processes that are already trying to shift the system in the same direction that you are? Can you build on these?

3. Uncovering Critical Mindsets. People make decisions by evaluating information and incentives through the lens of their own assumptions and goals. Therefore, good strategies for changing systems must address both structures and mindsets in ways that reinforce each other. We have found it helpful to uncover relevant mental models in action-to-outcome mapping sessions by asking two questions:

• What are some assumptions that impede your actions from achieving the desired outcomes? (For example, “Water conservation means wimpy showers and half-flushed toilets!”)
• What are the mindsets that support your actions? (For example, “Wasting water is bad.”)

In the case of water use, many people hold the powerful mindset that “conservation is depravation.” The water policy movement thus worked to distance itself from “conservation” and instead spoke of improved “efficiency” in their marketing efforts.

Reflection questions: Are there ways to strengthen the supporting mindsets? Weaken the impeding ones?

4. Accounting for External Forces. Next we ask the group to think of other forces that may have an impact on outcomes. By doing so, we ensure that they work on the most important factor that may help or hurt their initiative. For example, in the water case, if overall environmental health is the goal of the water conservation effort, then the analysis in step 2 suggests that addressing regional population growth might be a high-leverage area to target. Other forces include agricultural water use, the policies of other regions, and global climate change. This listing of external forces, while sobering, helps the group see how its actions fit into a larger picture and prompts members to consider how they might influence any of the external factors. This step offers the chance to evaluate strategy with the widest possible lens.

Reflection questions: Should you be trying to influence any of the external forces that might affect your outcomes? If an external force seems to overwhelm your actions, is there a different set of actions you could take that could be more effective?

5. Looking for Opportunities for Learning and Action. Throughout the session, we keep running lists of questions and insights. The final step is to review the two lists and other notes to see what questions have cropped up and what potential supporting actions, new areas of focus, and further exploration are needed.

Our experience with the action-to-outcome process is that it helps an intact team explicitly map its thinking about how various actions will lead to desired outcomes, while taking into account the important feedback effects that can accelerate or slow progress. One client said that this methodology “sort of backs into system dynamics” by beginning with a team’s current strategies rather than with the behavior of the system. While action-to-outcome mapping does little to initially address the dynamic complexity in the system or uncover root-cause drivers of problems, it is effective in:

• Surfacing a team’s assumptions;
• Maintaining a focus on strategy;
• Explicitly including feedback and multiple effects in strategic thinking;
• Building causal maps when you don’t have extensive experience in diagramming.

Having seen groups use action-to-outcome mapping to improve their strategies on challenges ranging from urban sprawl to sustainable agriculture to air quality to inner-city poverty gives us hope that systems thinking can fulfill its promise of helping overcome the complex challenges of creating a more sustainable world.

Andrew Jones (apjones@sustainer.org) and Don Seville (dseville@sustainer.org) are project managers at Sustainability Institute, a consulting, training, and research center focused on social, economic, and environmental issues. 

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It was going well—on average, each family and business was using less water. But one day I received a letter from an environmental activist:, “Dear Mr. Jones, you are making things worse!” he wrote. He acknowledged the improvements in efficiency, but asked us to look at the effects on rivers and aquifers, where total withdrawals had actually gone up. Our programs had helped people be more efficient, so something else was going on, but what? The writer argued that population in the area was growing, and that we were helping to drive the boom.

Consider how things worked in a desert city like Tucson before water efficiency improvements. What was the main limit to population growth? Water. So after the water-efficiency programs helped people and local businesses use less water, developers were able to build more houses. Growth in population wasn’t just an external force over which city officials and environmentalists had no control; it was something that we were helping to spur. So, as the letter writer said, our efforts didn’t bring any improvements in rivers and aquifers.

It didn’t stop there. The writer argued that when people and businesses are inefficient in their use of water and a drought occurs, they can cut back on their water use to make up for the lack of rainfall—shorter showers, less lawn watering, and so on. But in a high–efficiency setting, that kind of buffer doesn’t exist anymore. During a drought, the city makes up for the shortfall by taking water from rivers and aquifers. Nature carries the extra load, not the old buffer of wasted water (see “How the System Actually Behaved”). Ouch! At best, we didn’t help much. At worst, we hurt this system. What was going on?

MY MENTAL MODEL

My vision of how to keep more water in rivers and aquifers involved promoting conservation efforts such as water-saving toilets and showerheads. But this linear approach failed to take into consideration the system’s interconnections.

As preservationist John Muir said, “When we try to pick out anything by itself, we find it hitched to everything else in the Universe.” This story of increasing water efficiency is an example of an approach to change that goes back 3,000 years.

Reductionist View

We can trace the reductionist view back to around 500 B. C., when the Greek philosopher, Parmenides, made the case that the universe is composed of divisible parts. Flash forward to Newton and Descartes in 1700s and 1800s, describing the universe as a collection of separate, distinct parts that all fit together like a big, orderly clock. This kind of thinking served us just fine in many ways. And yet at some level, it has led us to think of our world as unconnected, so, for example, we spew untested toxins into the atmosphere to the point where mother’s milk contains dozens of unnatural chemical compounds. Our blindness to such interconnections reminds me of a Buddhist saying:, “The illusion of separateness is the source of all suffering.”

Systems View

Back 3,000 years ago, a second line of thinking was also at work: a systems view, consisting of ideas that didn’t fit within the reductionist paradigm. Roughly contemporary to Parmenides was the Greek philosopher, Heraclitus. Heraclitus said that everything was transformation and change. One of his metaphors was that people and all living creatures are like flames—the transformation of matter from one state to another. From this perspective, we are never the same or static, contradicting Parmenides’ assertion.

Biology seems to support Heraclitus. Consider that the matter in our skin exchanges itself with the rest of the world every month. Our liver, every six weeks. Our brain, every year. The cells in our body transform into air and earthworms and dogwoods and plankton and tigers and the woman standing next to us in the check-out line. As Lily Tomlin said:, “We all timeshare the same atoms.” We are a pattern through which matter passes.

HOW THE SYSTEM ACTUALLY BEHAVED

After water-efficiency programs helped people and businesses use less water, developers were able to build more houses, which boosted overall water usage. The shift toward low-flow toilets and other forms of conservation meant that, when a drought occurred, water users couldn’t cut back their usage any further, and the city had to make up for the shortfall by taking water from rivers and aquifers.

The ideas of Heraclitus and others have evolved through the centuries, sustained by thinkers such as Goethe. Since the 1940s, the field of systems understanding has blossomed with the work of Ludwig von Bertalanffy, Norbert Wiener, Jay Forrester, and others. At the heart of it, this perspective focuses on the interaction of the parts rather than the individual elements. For example, ecologists focus on how a tree interacts with soil, microbes, fungi, air, water, and animals. Therapists don’t focus just on an individual’s troubles, but also on his or her relationship with parents, siblings, children, and friends. Holistic doctors and healers, seeing a person as the interaction of mind, body, and spirit, look beyond symptoms to examine the underlying causes. Policymakers and business leaders consider multiple interactions as they design strategy.

What We Do

So, how would we think and act if we knew that we were truly interdependent? First, we wouldn’t see ourselves as victims of some unconnected external source. We see our actions and others’ as interdependent in what some Buddhist writers call “mutual co-arising.”

The viability of a life-sustaining society depends on our ability to experience now the longterm effects of our actions and to innovate with new behaviors and new tools.

With this new systems lens, if someone were to propose widening a bridge to alleviate traffic congestion, we could predict that the flow of cars would increase to fill the new capacity. Traffic and congestion mutually co-arise. As Winston Churchill said, “We shape our buildings; thereafter, our buildings shape us.” In the same way, we shape the world; thereafter, the world shapes us.

Second, acknowledging our interconnectedness means recognizing that the CO2 that came out of my tailpipe as I drove this morning will warm the Earth, causing drought in Africa, producing floods in India, and intensifying hurricanes. The shirt I’m wearing was made in China, where I have no idea about the condition of the workers. How do we deal ethically with such a level of interdependence?

The viability of a life-sustaining society depends on our ability to experience now the long-term effects of our actions and to innovate with new behaviors and new tools. Our actions are in close connection with the world of reactions. This is what Martin Luther King, Jr., referred to as the “inescapable network of mutuality.”

These realizations open opportunities for us: gratitude and appreciation for the abundance of life, chances to respond to the pain of the world with effective action, and, in this unprecedented time when we live in each other’s backyards, we can pay attention to outcomes we are creating in the world.

It boils down to this: declaring each of us to be an intimate part of something—the holy, the universe, the web of all existence—anything greater than ourselves and then taking appropriate action. That is our work.

Andrew Jones (apjones@sustainer.org) is a Program Director for the Sustainability Institute. He consults with organizations, teaches system dynamics modeling and systems thinking, coaches leaders in organizational learning through the Donella Meadows Fellows Program, delivers public addresses, and writes columns and articles. Currently his primary efforts are creating system dynamics simulations on climate change strategy and with the CDC on chronic disease strategy.

Excerpted from a service delivered at the Unitarian Universalist Church of Asheville, North Carolina, June 24, 2007. The full service is available at www.sustainabilityinstitute.org/SIinfo/ AJones.html.

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New Yorker staff writer Malcolm Gladwell explores these and many other scenarios in his recent book The Tipping Point (Little, Brown and Company, 2000), in an effort to understand how and why some trends become “epidemics.” He writes, “The best way to understand the emergence of fashion trends, the ebb and flow of crime waves . . . the rise of teenage smoking, the phenomenon of word of mouth, or any number of the other mysterious changes that mark everyday life is to think of them as epidemics. Ideas and products and messages and behaviors spread just like viruses do.” By studying patterns of extreme boom or bust, Gladwell believes that we can learn how to more effectively start and control positive “outbreaks” of our own.

Epidemics and the Tipping Point

What causes health-related as well as productor idea-related epidemics? Gladwell outlines three basic principles that have an impact on this kind of escalation:

• Ideas are contagious—people can infect one another with intellectual “viruses” as well as physical viruses;
• Little causes can have big effects— we know through systems thinking that what goes into any transaction, relationship, or system is not necessarily directly related to what comes out;
• Change doesn’t happen gradually but at one pivotal moment— “the moment of critical mass, the threshold, the boiling point.”

The author says that these three concepts describe both how the flu or measles move through a grade-school classroom and how a few happy customers can turn a new, empty restaurant into a booming success. But Gladwell’s book is not just about epidemics—it explores in detail the notion that all epidemics have a “tipping point.” Gladwell defines the tipping point, which has been described in many classic sociology texts, as “that one dramatic moment in an epidemic when everything can change all at once.”

On a behavior over time graph, the tipping point is the instant when the line depicting a certain activity suddenly turns sharply upward or downward (see “The ‘Tipping Point’ for Hush Puppies”). And as Gladwell points out, there is more than one way to tip an epidemic. When an epidemic tips out of equilibrium, it is because some change has happened in one of three areas—the Law of the Few, the Stickiness Factor, and the Power of Context.

The Law of the Few

The first rule by which epidemics operate is that, in a given process or system, some people matter more than others. This principle explains why Paul Revere is famous for his midnight ride at the start of the American Revolution and William Dawes is not. Gladwell pinpoints three groups of people who are important in spreading an epidemic. Connectors—like Revere—have a special gift for bringing the world together and making friends and acquaintances. Paul Revere was not only a Connector, but he was also a Maven. A Maven is an information

THE 'TIPPING POINT FOR' HUSH PUPPIES

The “tipping point” for Hush Puppies shoes came somewhere between late 1994 and early 1995. Sales rose from 30,000 pairs a year, to 430,000 pairs in 1995, to four times that in 1996. The fad was inadvertently launched by kids in hip clubs and bars in down-town Manhattan, who wore the shoes precisely because no one else would wear them.

broker who accumulates knowledge about a lot of different products, prices, or places—and continually disseminates that information as needed. The third group of people important in an epidemic are Salesmen—those who have the skills to persuade others to take a certain course of action. All three kinds of people—Connectors, Mavens, and Salesmen—are crucial to launching any social epidemic.

The Stickiness Factor

The content of the message is just as crucial as the messenger. Is the message—or product—so memorable that it can create change by spurring someone into action? The book explores how the producers of some children’s television programs, such as Sesame Street and Blue’s Clues, continually conduct research into the “stickiness”—or appeal and memorability—of different episodes. They have found that when episodes are not “sticky,” children get bored and divert their attention elsewhere. Merely moving characters to different spots on the screen, combining various individuals in one segment, and repeating shows at certain intervals all influence the presentation of the ideas and the effectiveness of the final message. As Gladwell writes, “There is a simple way to package information that, under the right circumstances, makes it irresistible.”

He also points out that the line between a customer’s hostility toward and acceptance of an idea is sometimes a lot narrower than we might think. For instance, marketers have long known that small changes to a direct-mail package can dramatically affect results. Gladwell cites a series of integrated advertisements for Columbia Record Club that included a gold box on the order form, coupled with TV commercials that revealed the “secret of the Gold Box.” The combination made the promotion enticingly “sticky,” and the results of the campaign were unprecedented.

The Power of Context

The third and final rule in The Tipping Point is that “epidemics are sensitive to the conditions and circumstances of the times and places in which they occur.” One could argue that Paul Revere’s ride was successful because he made it at night—when people were at home in bed, not off working in the fields. When researchers studied the violent crime rate in New York City, instead of focusing on the crimes themselves, they focused on the context within which much of the crime was occurring—the subway, where minor offenses such as graffiti and fare-beating were prevalent. Police officers on the streets also cracked down on lesser offenses such as public drunkenness, quickly discovering that seemingly insignificant quality-of-life misdemeanors were tipping points for more violent crimes.

“Those who are successful at creating social epidemics do not do just what they think is right. They deliberately testtheir intuitions.”

What Gladwell calls the “150 Tipping Point”—the maximum number of people you can have in a group without experiencing structural impediments to the group’s ability to agree and act with one voice—is also related to this rule. Gore Associates, the multi-million-dollar high-tech firm that makes water-resistant GoreTex fabric, has designed its plants to include no more than 150 employees each for this reason. Essentially, “Gore has created . . . an organized mechanism that makes it far easier for new ideas and information moving around the organization to tip—to go from one person or one part of the group to the entire group all at once.”

“Tipping” Toward Change

What do the ideas in The Tipping Point mean for people who are trying to create dramatic changes in organizations? Gladwell advises that starting epidemics requires concentrating resources in a few key areas. “If anyone wants to start an epidemic, then—whether it is of shoes or behavior or a piece of software—he or she has to somehow employ Connectors, Mavens, and Salespeople . . . to translate the message of the Innovators into something the rest of us can understand.” Change agents ought to focus their efforts, then, on nurturing these groups.

The Tipping Point theory also demands that we reframe how we think about the world. Because of the limitations and peculiarities of the human mind and heart, the world does not operate in the way that we often assume it does. The author points out that, “Those who are successful at creating social epidemics do not do just what they think is right. They deliberately test their intuitions.” And while we like to think of ourselves as autonomous and inner directed, in reality, we are powerfully influenced by our surroundings, our immediate context, and the personalities of those around us. “That’s why social change is so volatile and so often inexplicable, because [it] is the nature of all of us to be volatile and inexplicable.”

Although it may seem like a long row to hoe toward significant change, Gladwell points out that simply by reaching the right people, we can shape the course of social epidemics. He writes, “Look at the world around you. It may seem like an immovable, implacable place. It is not. With the slightest push—in just the right place—it can be tipped.” Our challenge is to find that leverage point and to set the forces of change into motion.

Kellie Wardman O’Reilly is publications director at Pegasus Communications.

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