Flow Charts Understanding and Communicating How a Process Works

How to use flow charts with James Manktelow & Amy Carlson.

Flow charts are easy to understand diagrams showing how ste!s in a !rocess fit together. "his makes them useful tools for communicating how !rocesses work# and for clearly documenting how a !articular $o% is done. Furthermore# the act of ma!!ing a !rocess out in flow chart format hel!s you clarify your understanding of the !rocess# and hel!s you think a%out where the !rocess can %e im!ro&ed. A flow chart can therefore %e used to'

(efine and analy)e !rocesses. *uild a ste! %y ste! !icture of the !rocess for analysis# discussion# or communication. (efine# standardi)e or find areas for im!ro&ement in a !rocess. Also# %y con&eying the information or !rocesses in a ste! %y ste! flow# you can then concentrate more intently on each indi&idual ste!# without feeling o&erwhelmed %y the %igger !icture. How to Use the "ool Most flow charts are made u! of three main ty!es of sym%ol'

+longated circles# which signify the start or end of a !rocess.

,ectangles# which show instructions or actions.

(iamonds# which show decisions that must %e made

Within each sym%ol# write down what the sym%ol re!resents. "his could %e the start or finish of the !rocess# the action to %e taken# or the decision to %e made. -ym%ols are connected one to the other %y arrows# showing the flow of the !rocess. "i!' "here are many other flowchart sym%ols that can also %e used. Howe&er# remem%er that an im!ortant use of flow charts is in communication' .f you use o%scure sym%ols that only !art of your audience understands# there/s a good chance that your communication will fail. As e&er# kee! things sim!le0 "o draw the flow chart# %rainstorm !rocess tasks# and list them in the order they occur. Ask 1uestions such as 2What really ha!!ens ne3t in the !rocess42 and 2(oes a decision need to %e made %efore the ne3t ste!42 or 2What a!!ro&als are re1uired %efore mo&ing on to the ne3t task42 -tart the flow chart %y drawing the elongated circle sha!e# and la%eling it 2-tart2. "hen mo&e to the first action or 1uestion# and draw a rectangle or diamond a!!ro!riately. Write the action or 1uestion down# and draw an arrow from the start sym%ol to this sha!e. Work through your whole !rocess# showing actions and decisions a!!ro!riately in the order they occur# and linking these together using arrows to show the flow of the !rocess. Where a decision needs to %e made# draw arrows lea&ing the decision diamond for each !ossi%le outcome# and la%el them with the outcome. And remem%er to show the end of the !rocess using an elongated circle la%eled 2Finish2. Finally# challenge your flow chart. Work from ste! to ste! asking yourself if you ha&e correctly re!resented the se1uence of actions and decisions in&ol&ed in the !rocess. And then 5if you/re looking to im!ro&e the !rocess6 look at

the ste!s identified and think a%out whether work is du!licated# whether other ste!s should %e in&ol&ed# and whether the right !eo!le are doing the right $o%s. "i!' Flow charts can 1uickly %ecome so com!licated that you can/t show them on one !iece of !a!er. "his is where you can use 2connectors2 5shown as num%ered circles6 where the flow mo&es off one !age# and where it mo&es onto another. *y using the same num%er for the off !age connector and the on !age connector# you show that the flow is mo&ing from one !age to the ne3t. +3am!le "he e3am!le %elow shows !art of a sim!le flow chart which hel!s rece!tionists route incoming !hone calls to the correct de!artment in a com!any'

7ey Points Flow charts are sim!le diagrams that ma! out a !rocess so that it can easily %e communicated to other !eo!le. "o draw a flowchart# %rainstorm the tasks and decisions made during a !rocess# and write them down in order. "hen ma! these out in flow chart format using a!!ro!riate sym%ols for the start and end of a !rocess# for actions to %e taken and for decisions to %e made. Finally# challenge your flow chart to make sure that it/s an accurate re!resentation of the !rocess# and that it re!resents the most efficient way of doing the $o%

*efore an aircraft takes off# its crew mem%ers must carry out hundreds of checks to ensure that it is safe to fly. Just one missed check could mean the difference %etween a smooth# successful flight# and a disastrous one. -o# how do they ensure that they don/t forget an im!ortant safety check4 "hey use an aide m8moire# in the form of a !re flight checklist.

-wim 9ane (iagrams Ma!!ing and .m!ro&ing the Processes in :our ;rgani)ation

< i-tock!hoto=,*Fried When thinking a%out your organi)ation# ha&e you e&er said to yourself that the right hand doesn/t know what the left hand is doing4 Chances are you ha&e' (es!ite all the efforts !eo!le ha&e made to streamline %usiness o!erations and flatten organi)ation structures# there are still a great many acti&ities that in&ol&e more than one de!artment or team. Whether you organi)e your de!artment or teams %y function 5marketing# accounts# o!erations6# %y !ur!ose 5for e3am!le# cor!orate customer management6 or %y any other means# the fact is that a de!artment or team needs to work with other de!artments or teams. "his means connections# communications and hand offs %etween de!artments and teams. And these create the risk of !rocessing ga!s# inefficiencies and du!lications# which can contri%ute to reduced !erformance or higher costs. +&en well designed !rocesses and interactions are at risk of inefficiency cree!ing in' .t/s a fact of human nature> and so# it/s something that needs to %e managed. *y ha&ing a formal method for identifying and integrating !rocesses %etween de!artments and teams# you can ensure the connections# communications and hand offs are well designed and well managed. ;ne such a!!roach uses 2-wim 9ane (iagrams#2 also known as 2,ummler *rache (iagrams.2 -wim 9ane (iagrams were !ro!osed %y ?eary ,ummler and Alan *rache in their %ook .m!ro&ing Processes 5@AAB6. "his method of diagramming allows you to 1uickly and easily !lot and trace !rocesses and# in !articular# the interconnections %etween !rocesses# de!artments and teams. 9ike other !rocess diagramming techni1ues# with the ,ummler *rache method# you ma! !rocesses linearly as a series of tasks across the !age. 9ines and arrows %etween tasks re!resent the flow of information# goods or work in !rogress# and also re!resent changes in res!onsi%ility. "he identifying feature of ,ummler *rache is the use of 2swim lanes2# hori)ontal rows across the diagram !age. "hink of a swim meet where each com!etitor has his or her own lane to swim' .n this diagramming method# each 2swim lane2 may %elong to an indi&idual# a team# a de!artment# or any other organi)ational unit you choose. Process diagrams# in general# are a great tool to hel! s!ot !rocessing ga!s and inefficiencies. "he added ad&antage of the ,ummler *rache or -wim 9ane (iagram a!!roach is that it focuses on the high risk interconnections %etween de!artments and teams# and hel!s you s!ot more clearly issues and risks associated with these. +3am!le Here is a sim!le manufacturing e3am!le' C:D Cor!. makes ?rommels. ?rommels are made of three !ieces of metal two of which are welded together and then $oined with the third. Click here for figure @ E the current swim lane diagram for C:D Cor!oration# showing what the swim lane diagram for the manufacturing !rocess currently looks like. .m!ro&ing the Process ;nce the diagram is com!lete# it is easy to see who is res!onsi%le for what and it is also easy to start identifying !otential inefficiencies. "he diagram techni1ue hel!s you %reak down your !rocess so you can s!ot the %ottlenecks# redundancies# and other causes of inefficiency# and so get on with im!ro&ing your %usiness !rocess. For e3am!le# when you look at the ?rommel manufacturing !rocess# there is !otential redundancy in the raw material ins!ection. .f the ,ecei&er were to ins!ect the raw material %efore sending it on to Welder or Joiner# then %oth of those guys could concentrate on their main acti&ities' welding and $oining.

Click here for figure F E the re&ised swim lane diagram for C:D Cor!oration# showing this !rocess im!ro&ement. Creating and Using ,ummler *rache (iagrams "he first ste! to s!otting inefficiencies and making im!ro&ements is to %reak down your organi)ation/s !rocesses into managea%le !ieces. .f you tried to look at e&erything at once and in detail# you/d %e o&erwhelmed. -o %efore you get started# it/s im!ortant to clarify what you are trying to accom!lish with the ,ummler E *rache method# and so determine the right areas of focus and le&el of detail. .f you are trying to find strategic inefficiencies# then analy)ing e&ery !rocess in detail is unnecessary and cum%ersome. Here you might assign each main functional area to a swim lane and look at the interchanges in and %etween them. "his would hel! you s!ot disconnects %etween functional areas of the %usiness. .f you were trying to diagnose inefficiencies in your hiring and recruitment !rocess then you would look at s!ecific roles# de!artments and !erha!s some key indi&iduals and assign these to the swim lanes. For a com!rehensi&e a!!roach# you may start %y analy)ing the !rocesses and organi)ation using high le&el swim lane diagrams. "hen# once you ha&e s!otted areas you need to focus on# you can drill down there using more detail diagrams.

@. (etermine what you aim to accom!lish. What %usiness !rocess do you want to analy)e4 .s it o!erational# strategic# functional# etc.4 What organi)ation units are in&ol&ed and what le&el of detail do you want to analy)e these to s!ot inefficiencies4 F. Clarify the !rocesses you are focusing on. A !rocess is defined for this !ur!ose as a series of tasks that ha&e a s!ecific end result# such as hiring a staff mem%er# !roducing a !roduct# ac1uiring a new customer. For each !rocess you are analy)ing# what is the end result4 G. .dentify all !artici!ants in the !rocesses you are analy)ing. "hese include all the organi)ation units !artici!ating in the !rocesses# and anyone who !ro&ides in!uts or recei&es out!uts from it. (e!ending on the le&el of detail you ha&e chosen# these may %e %y de!artments# teams or indi&idual !eo!le> or e&en a com!uter system that !erforms certain !arts of the !rocess. Which organi)ation units !artici!ate4 Where do the in!uts to the !rocess come from4 Who recei&es the out!ut of the !rocess4 H. Iow it/s time to start creating the diagram. 9ist the !artici!ants in the far left column of the diagram. Assign each of these !artici!ants to a hori)ontal %and 5swim lane6. .t is hel!ful to assign the swim lanes in se1uence# with the first column assigned to the !artici!ant who !ro&ides the first in!ut. 5For customer facing !rocesses# this is often the customer.6

5. List the step or activities required at each stage of the process: Follow through the !rocess se1uentially. ,emem%er you are ma!!ing how the !rocess is currently %eing done E not how you think it should %e done. "he key to creating a useful diagram is to kee! it as sim!le as !ossi%le. "ry not to include too many loo! %acks 5unless you are focusing on e3ce!tions6 E and kee! the !rocess ma!!ing mo&ing forward. J. Analy)e the diagram for !otential areas of im!ro&ement. Are there any ga!s or ste!s missing4 .s there du!lication4 Are there o&erla!s# where se&eral !eo!le or teams !erform the same task or acti&ity4 Are there acti&ities that add no &alue4 ;nce you ha&e identified !otential areas for im!ro&ement# the ne3t ste! is to decide how to address the issues and make changes. ,ummel *rache diagrams can also %e used at this stage to ma! out the !ro!osed !rocess changes. As with any !ro!osed changes in the organi)ation# the !ros and cons need to %e analy)ed# and any change that follow must %e carefully !lanned. For e3am!le# if you are considering remo&ing du!licate !rocesses# you must first look at whether there is a legitimate need and also what would %e the im!act of remo&ing the du!lication' A du!licate !rocess may e3ist 2legitimately2 to

!ro&ide# for e3am!le# !ro!er financial or safety controls. 5"echni1ues like Brainstorming and Impact Analysis can hel! you think through the conse1uences of a change.6 7ey Points ,ummler *rache diagrams are useful tool for identifying sources of inefficiency within# and %etween# !rocesses and organi)ation units. *y using structured !ictures to show how !rocesses achie&e their aims# you can see at a glance who is res!onsi%le for what# and whether there are !otential areas for im!ro&ement in the !rocess. "his is $ust one of the techni1ues within Mind "ools that can hel! you think a%out the ways in which things ha!!en within an organi)ation. .f you en$oyed this article# you/ll also lo&e our articles on Flow Charts # ystems !iagrams and "alue Chain Analysis -tory%oarding Planning and Checking a Process as a "eam

9ook at the ste!s in your !rocess. < i-tock!hoto ;7# you/&e $ust finished a long !lanning session for a new initiati&e. :ou/re on your way home# %ut you can/t get rid of the feeling that you/&e forgotten something im!ortant. (oes this sound familiar4 "hen it hits you' "here/s a critical flaw in the !lan# meaning that you/ll ha&e to call your team %ack in tomorrow# and start the !rocess all o&er again. .t/s a terri%le feeling# and one that we/&e !ro%a%ly all e3!erienced. We might ha&e a&oided this !ro%lem# howe&er# if we had used a sim!le !lanning tool that the film industry has relied on for decades' the story%oard. What Are -tory%oards4 .n the film industry# story%oards are sim!ly a way of looking at the mo&ie# laid out camera shot %y camera shot# with still !ictures E %efore filming actually %egins. For e3am!le# the story%oard for -cene ;ne o!ens with an image of what that first shot# or camera angle# will look like. "he ne3t shot# from a different angle# shows in the ne3t !icture on the story%oard. With each new camera shot or action# a new !icture is added. .n a %usiness en&ironment# it/s the same idea. *ut instead of making a mo&ie# you might %e

Un%locking *ottlenecks Fi3ing Un%alanced Processes

Where/s the %ottleneck in your area4 < i-tock!hoto Consider this scenario' :ou own a trucking com!any# and you/&e recently had !ro%lems in the deli&ery !rocess for one of your clients. "he loading at their factory goes smoothly# %ut once your trucks arri&e at the client/s warehouse# efficiency seems to fall a!art. "he trucks ty!ically wait si3 to eight hours %efore workers unload the cargo. +&ery minute that your trucks are !arked and waiting costs your com!any re&enue. :ou in&estigate to find out why the trucks are forced to wait# and you disco&er something sur!rising' "he reason they wait is %ecause no one notifies the warehouse in ad&ance of their arri&al. As a result# when a truck arri&es# the forklift that/s needed for unloading is often %eing used for another task. -o your truck has to wait until the forklift is free. Iow you %egin to wonder why the warehouse isn/t notified# as it should %e# that trucks are on their way. :ou in&estigate more and learn that the !erson who used to call the warehouse left the com!any a few months ago# and the task wasn/t reassigned. -o you delegate the !hone call to another team mem%er# and you !ersuade the warehouse to !urchase a second forklift E and your !ro%lem is sol&ed. "his %ottleneck was !retty easy to fi3. *ut ha&e you e&er disco&ered a %ottleneck in your %usiness !rocesses4 "hese can %e harder to resol&e# mostly %ecause they/re harder to identify. What is a *ottleneck4 A %ottleneck in a !rocess occurs when in!ut comes in faster than the ne3t ste! can use it to create out!ut. "he term com!ares assets 5information# materials# !roducts# man hours6 with water. When water is !oured out of a %ottle# it has to !ass through the %ottle/s neck# or o!ening. "he wider the %ottle/s neck# the more water 5in!ut=assets6 you can !our out. "he smaller# or narrower# the %ottle/s neck# the less you can !our out E and you end u! with a %ack u!# or 2%ottleneck.2 "here are two main ty!es of %ottlenecks'

@. F.

hort#term $ottlenec%s E "hese are caused %y tem!orary !ro%lems. A good e3am!le is when key team mem%ers %ecome ill or go on &acation. Io one else is 1ualified to take o&er their !ro$ects# which causes a %acklog in their work until they return. Long#term $ottlenec%s E "hese occur all the time. An e3am!le would %e when a com!any/s month end re!orting !rocess is delayed e&ery month# %ecause one !erson has to com!lete a series of time consuming tasks E and he can/t e&en start until he has the final month end figures. .dentifying and fi3ing %ottlenecks is highly im!ortant. "hey can cause a lot of !ro%lems in terms of lost re&enue# dissatisfied customers# wasted time# !oor 1uality !roducts or ser&ices# and high stress in team mem%ers. How to .dentify *ottlenecks .dentifying %ottlenecks in manufacturing is usually !retty easy. ;n an assem%ly line# you see when !roducts !ile u! at a certain !oint. .n %usiness !rocesses# howe&er# they can %e harder to find. -tart with yourself. .s there a routine or situation that regularly causes stress in your day4 "hese frustrations can actually %e a significant indicator that a %ottleneck e3ists somewhere.

For e3am!le# imagine that you/re res!onsi%le for re&iewing a re!ort that another team mem%er creates each week. ;nce you/re done# you gi&e it to another team mem%er# who has to !ost the re!ort on your com!any/s intranet. (ue to your workload# howe&er# the re!ort often sits on your desk for hours E so the ne3t !erson down the line sometimes has to stay later at the end of the day to !ost it on time. "his causes a lot of stress for you as well as your colleague. .n this scenario# you/re the %ottleneck. Here are some other signs of %ottlenecks'

9ong wait times E For e3am!le# your work is delayed %ecause you/re waiting for a !roduct# a re!ort# or more information. ;r materials s!end time waiting %etween ste!s of a %usiness or manufacturing !rocess. *acklogged work E "here/s too much work !iled u! at one end# and not enough at the other end. High stress le&els. "wo tools are useful in hel!ing you identify %ottlenecks' @. Flow Charts Use a flow chart to hel! you identify where %ottlenecks are occurring. Flow charts %reak down a system %y detailing e&ery ste! in the !rocess in an easy to follow diagrammatic flow. ;nce you ma! out a !rocess# it/s much easier to see where there might %e a !ro%lem. -it down and identify each ste! that your !rocess needs to function well. For e3am!le# in the trucking scenario we mentioned earlier# a flow chart might look like this'

-te! @ E ?oods are manufactured at the factory. -te! F E ?oods are loaded onto the truck. -te! G E "he warehouse is notified a%out the truck/s arri&al time. -te! H E "he warehouse schedules a forklift for the e3!ected arri&al time. -te! K E "he truck arri&es at the warehouse# and unloading starts. .n this case# the delay occurred %ecause -te!s G and H were missing# and this led to a long wait %etween -te!s F and K. Creating the flow chart %efore in&estigating the !ro%lem would ha&e hel!ed you 1uickly see where your !rocess %roke down. F. "he Fi&e Whys "echni1ue "he Five &hys techni1ue can also hel! you identify how to un%lock your %ottleneck. "o start# identify the !ro%lem you want to address. "hen# working %ackward# ask yourself why this !ro%lem is occurring. 7ee! asking yourself 2Why42 at each ste!# until you reach the root cause. Consider our trucking e3am!le again. ?o %ack to the %eginning# and imagine that you ha&e no idea why the trucks are delayed. "rucks are forced to wait for hours at the warehouse. &hy' *ecause the forklift isn/t ready to unload the trucks when they arri&e. &hy isn/t the forklift ready4 *ecause there/s only one forklift# and it/s used for other things. "he warehouse doesn/t know the trucks are arri&ing# so the forklift isn/t scheduled to unload cargo. &hy doesn/t the warehouse know the trucks are coming4 *ecause no one has called to tell them. &hy has no one called the warehouse4 *ecause the team mem%er whose $o% was to call the warehouse left months ago# and no one else was assigned to make the calls. And there/s the solution. :ou/&e identified the root cause' a missing team mem%er. "he easy fi3 is to delegate the task to someone else. *y working %ackward and identifying the root cause# you can clearly see what you need to change to fi3 the !ro%lem. How to Un%lock *ottlenecks :ou ha&e two %asic o!tions for un%locking your %ottleneck'

@. F.

.ncrease the efficiency of the %ottleneck ste!. (ecrease in!ut to the %ottleneck ste!.

.n our trucking e3am!le# the clear solution was to increase efficiency %y notifying the warehouse. How you might increase efficiency in other situations will de!end greatly on the nature of the !rocess concerned# %ut here are some general ideas'

+nsure that whate&er is %eing fed into the %ottleneck is free of defects. *y doing this# you ensure that you/re not wasting the &alua%le %ottleneck resource %y using it to !rocess material that will later %e discarded. ,emo&e acti&ities from the %ottleneck !rocess that could %e done %y other !eo!le or machinery. Assign the most !roducti&e team mem%ers and technology to the %ottleneck !rocess. Add ca!acity in the %ottleneck !rocess. For more on how to increase the efficiency of !rocesses# see our article on (ai)en: *aining the Full Benefits of Continuous Improvement . "he other o!tion# decreasing in!ut# may at first sound silly. *ut if one !art of a !rocess has the !otential to !roduce more out!ut than you ultimately need or can manage# it/s an a!!ro!riate res!onse. :ou may ha&e a situation where you kee! increasing the amount of work in !rogress in&entory immediately after a ste! that/s working too efficiently. For e3am!le# s!eed cameras can 2catch2 a large num%er of dri&ers who e3ceed the s!eed limit. Howe&er# each s!eed &iolation has to %e !rocessed# and this incurs a cost. "he cameras can catch far more dri&ers than the !rocessing de!artments can handle. -o# many cameras are !rogrammed to identify only those dri&ers who go a certain amount o&er the s!eed limit# or to o!erate only at certain times of day or certain days of the week. As a result# the num%er of in!uts to the system is reduced to the le&el that it can !rocess. 7ey Points *ottlenecks can cause ma$or !ro%lems for any com!any# and identifying their root causes is critical. 9ook for the ty!ical signs of %ottlenecks E such as %acklogged work# waiting 5%y !eo!le# materials# or !a!erwork6# and high stress relating to a task or !rocess. "o make sure you identify the root cause 5and not $ust one of the effects6# use a Flow Chart or the Fi&e Whys techni1ue. "o e3!lore !rocess %alancing and resol&ing %ottlenecks in more detail# read 2 +he *oal2 %y +liyahu M ?oldratt and Jeff Co3. A!!ly "his to :our 9ife Are there %ottlenecks in any of your !rocesses at work4 (o you !roduce things that sit in a colleague/s in%o3 for hours or days %efore they/re !rocessed4 (o things sit in your in%o3 for days %ecause you/re too %usy4 (o you often wait to recei&e materials# re!orts# or !ieces of information from colleagues# and do these delay tasks that you need to com!lete4 ;r are you always late sending things to your colleagues4 For each %ottleneck situation# identify who E or what E the %ottleneck is. .s it you# or someone else# or e&en an automatic !rocess4 "hen determine if the !rocess would flow %etter if in!uts to the %ottleneck ste! were reduced# or if efficiency were increased. .f the !ro%lem is efficiency# how can you im!ro&e4 ,ead our article on leverage - See more at: http://www.mindtools.com/pages/article/newTMC_76.htm#sthash.HhO t!H".dp#$

;!timi)ing -er&ice and ,esources

,educed wait times increase customer satisfaction. < i-tock!hoto=Ieustockimages .t/s K'GB !m# it seems like e&ery%ody has $ust left work# and you/re stuck in a long checkout line at the grocery store.

(o you wonder why store management hasn/t figured out how many cashiers they need during the e&ening rush4 .f you do# you !ro%a%ly ha&e an intuiti&e a!!reciation for the im!ortance of 1ueues. Whether workers wait to use the office co!ier# air!lanes wait to land# or !arts wait on an assem%ly line# 1ueues are an ine&ita%le# and often frustrating# !art of life. Waiting lines affect !eo!le e&ery day# which is why a !rimary goal in many %usinesses is to !ro&ide the %est le&el of ser&ice !ossi%le. Minimi)ing those waiting lines is a key !art of creating a !ositi&e e3!erience for the customer. How can you achie&e that in your organi)ation4 Well# there/s a whole %ody of mathematical knowledge dedicated to studying# simulating# and analy)ing wait times. .t/s called 1ueuing theory# and it can hel! minimi)e the cost to your %usiness of waiting lines. .t does that %y hel!ing you determine the %est way to use your staff and other resources# while reducing customer wait times. Lueuing models show you how to make sure you ha&e enough staff working# at any gi&en time# to !ro&ide a good le&el of ser&ice E without hurting !rofita%ility %y ha&ing !eo!le standing around doing nothing. Lueuing models consider the following'

(ata and .nformation Management Protecting an .m!ortant ;rgani)ational Asset

?ood data management can %e im!ortant for your !roducti&ity# and for your organi)ation/s success. < i-tock!hoto=Mars*ars A client has $ust contacted you with a %illing 1uestion. Although you can &iew her %ill# you can/t access her order# %ecause it/s held on a sales data%ase that isn/t synced with yours. "o hel! her# you need to s!eak with someone on the sales team. Howe&er# he/s out in the field# and three days !ass %efore you ha&e the information you need to resol&e the issue. *y this time# the customer is understanda%ly u!set. (ata and information management isn/t $ust the res!onsi%ility of your ." de!artment> it affects e&eryone in an organi)ation. .t can determine how well you communicate with your customers# how safe and secure your data is# how safe your customers are# and how efficiently e&eryone can meet their goals and achie&e !erformance metrics. .n this article# we/ll look at why data and information management can %e so im!ortant# and we/ll e3!lore ways that you can organi)e data more effecti&ely in your organi)ation. Iote' "his is highly im!ortant in many %usinesses 5for e3am!le# in %anking6# %ut is not as rele&ant in others 5for e3am!le# in a design agency6. Use your own %est $udgment when thinking a%out data and information management within your own organi)ation. What is (ata and .nformation Management4

"he !ata ,anagement Association 5(AMA6 defines data and information management as 2M the de&elo!ment# e3ecution# and su!er&ision of !lans# !olicies# !rograms# and !ractices that control# !rotect# deli&er# and enhance the &alue of data and information assets.2 (ata management has e3isted in some form since the @AKBs. .t emerged in the late @ANBs as a distinct disci!line when information %egan to mo&e from !a!er to ta!e# and then to disk. ;&er the !ast decade# data management has %ecome im!ortant for organi)ations of all si)es# in many different industries. "he .m!ortance of (ata Management +ffecti&e data and information management is a concern for many organi)ations. "he amount of digital information in the world is increasing tenfold e&ery fi&e years# and organi)ations are ha&ing a difficult time managing this data and kee!ing it secure. .n a study conducted %y Oirginia Commonwealth Uni&ersity# fewer than @B !ercent of organi)ations use documented !rocesses to manage their data# and fewer than one in three organi)ations claim confidence in their own data. "he conse1uences of !oorly managed data can %e significant. Consider the following e3am!les'

Financial losses: :our organi)ation/s head1uarters are flooded une3!ectedly. :our %acku! system is outdated# and# as a result# you lose months of data# worth millions of dollars to your organi)ation. Litigation ris%: Hackers access your customer data%ase# which includes addresses and credit card num%ers. "hese customers are now at risk of identity theft# and they decide to sue you for &iolation of their !ri&acy. -.cess data storage costs: :our organi)ation has no !rocess for data cleansing E re!lacing or deleting inaccurate# incom!lete# or outdated information. Conse1uently# your data storage costs and ." resource needs dou%le each year. Inefficient wor%flow processes: :our team mem%ers can/t find the information that they need to do their work# %ecause each de!artment has its own data%ase# and none of these systems communicate with one another. ,issed opportunities: :our sales re!s struggle to access the in&entory data%ase# which informs them of !roduct a&aila%ility and deli&ery dates. Com!etitors win sales from you# %ecause they ha&e immediate access to this information. Brand/reputation loss: Customers are frustrated# %ecause de!artments can/t communicate effecti&ely with one another. As a result# your organi)ation/s re!utation and sales suffer. 0egative press/pu$licity: ;ne of your team mem%ers loses their la!to!# which contains information a%out a well known client. As a result# your organi)ation recei&es negati&e media co&erage and you lose a num%er of clients. Put sim!ly# when you can/t get your hands on the information you need# or when the information you ha&e isn/t !rotected a!!ro!riately# you can miss o!!ortunities# your !erformance dro!s# your !ro$ects and customers suffer# and you lose com!etiti&e ad&antage. -ecurity is a key element in data management. "he FB@G *lo$al tate of Information ecurity urvey re!orts that although more than NB !ercent of organi)ations sur&eyed are 2&eryP or 2somewhatP confident in their information security strategies# that confidence has declined steadily since FBBQ. (ata theft and security issues are increasing each year# leading to financial losses# intellectual !ro!erty theft# identity fraud# and com!romised re!utations. .m!ro&ing :our .nformation Management .f effecti&e data and information management is im!ortant within your industry# then it should %e gi&en serious# long term attention from e&eryone from the C+; and C.; down to the newest em!loyee on the team. 7ee! in mind that o&erhauling an e3isting system or syncing all of the data%ases in an organi)ation can %e an enormous# costly# and difficult !ro$ect that can take months or years to im!lement E this may make it im!ractical# !articularly if other !ro$ects will deli&er a %igger %usiness %enefit. Howe&er# you can take other ste!s to im!ro&e data management for your team# and for your organi)ation. @. .dentify Frustrations -tart %y listing the frustrations# $ottlenec%s # and inefficiencies that you e3!erience regularly with information and data a&aila%ility. 5"o do this# it can %e hel!ful to use Flowcharts and wim Lane !iagrams to ma! how information mo&es through your de!artment or organi)ation.6 Ie3t# ask your team mem%ers to descri%e their frustrations regarding data and information. 9ack of access or inefficiencies may %e affecting their work in ways that you are not aware of. ;nce you ha&e a list of current issues# !erform a 1oot Cause Analysis to trace each issue to its origin. "his analysis can hel! you determine whether these !ro%lems# errors# or inefficiencies are the result of technical# maintenance# or human issues.

F. ,e&iew -ecurity "he frustrations that you listed a%o&e could %e a result of &alid data security measures. For e3am!le# most organi)ations restrict access to !ersonal information# such as em!loyee salaries and &acation schedules# customer credit card data# or sensiti&e sales and financial data E clearly# you need to think carefully a%out who can access this information. -tart %y conducting a 1is% Analysis to identify any data security issues. "alk to other de!artments within the organi)ation E !articularly accounts# internal audit# com!liance# and legal E to see if there are any issues that you need to %e aware of. Ask your ." de!artment a%out information security. :ou and your team could %e !utting &ital information at risk unknowingly# es!ecially when you/re working offsite on a la!to!# smart!hone# or ta%let. Ask what you can do to kee! your organi)ation/s information safe and secure# and communicate these %est !ractices to your team. G. -treamline Processes and -ystems "alk to your ." de!artment a%out the !ro%lems# inefficiencies# and security !oints that you ha&e identified. "hey might %e a%le to fi3 some of these issues# or they might %e a%le to suggest new ways to access the data that you need. At a minimum# letting ." staff mem%ers know a%out your frustrations gi&es them im!ortant feed%ack that they can consider during system u!grades and redesigns. :our ." de!artment might ha&e a list of %est !ractices and guidelines that you can use to streamline information# a&oid du!lication# !rotect sensiti&e data# and use e3isting systems more efficiently. "alk to your team mem%ers a%out ste!s that they can take to im!ro&e their own data and information management. (o they ha&e files or software that they are no longer using that can %e deleted4 Are they taking unnecessary risks with sensiti&e information4 (o they kee! files and folders organi)ed# well maintained# and u! to date4 "hink a%out the ste!s that you can take to im!ro&e data 2housekee!ing.2 ,outinely going through your files and deleting old# inaccurate# or incom!lete documents and !rograms can hel! reduce data storage costs for your organi)ation> it/s also a smart way to manage your electronic files . "here may also %e a central data%ase that you could u!date# so that others in your organi)ation can access your de!artment/s information. H. Create *usiness Cases for -ystems .m!ro&ements For some organi)ations# data and information management may not %e a high !riority# and# for some# it may not seem rele&ant at all. .f data management isn/t as high a !riority as it should %e within your organi)ation# you might ha&e trou%le getting %uy in for your !ro!osed im!ro&ements. Brainstorm the ways that im!ro&ing data and information management could %enefit your organi)ation. .f a!!ro!riate# write a $usiness case outlining these ideas and !ro!osals# and e3!lain how your !ro!osed systems im!ro&ements will hel! the organi)ation and eliminate the conse1uences of !oorly managed data. 7ey Points (ata and information management is the de&elo!ment of !olicies and systems that !rotect and deli&er the information that your organi)ation needs in order to o!erate. .n de!th data and information management is crucial to the success of some organi)ations# %ut for others it may not %e a !riority. When data is inaccurate# inaccessi%le# lost# or incom!lete# your organi)ation can suffer from financial losses# missed o!!ortunities# low !roducti&ity# and a !oor re!utation. "o hel! your organi)ation manage its data and information more effecti&ely# list the frustrations# %ottlenecks# and inefficiencies that you and your team mem%ers e3!erience. "hen# re&iew the risks that you need to !rotect against. When you/&e identified the changes that you want to make# talk to ." !rofessionals a%out these issues# and find out what you can do to streamline !rocesses and systems within your organi)ation. Finally# write a %usiness case to outline how your !ro!osed im!ro&ements will %enefit the organi)ation. "his site teaches you the skills you need for a ha!!y and successful career> and thi

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.m!ro&ing *usiness Processes -treamlining "asks to .m!ro&e +fficiency

Ma! !rocesses carefully %efore making changes. < i-tock!hoto=sR$ohnNA :ou !ro%a%ly use do)ens of %usiness !rocesses e&ery day. For e3am!le# you may go through the same ste!s each time you generate a re!ort# resol&e a customer com!laint# contact a new client# or manufacture a new !roduct. :ou/&e likely come across the results of inefficient !rocesses# too. Unha!!y customers# stressed colleagues# missed deadlines# and increased costs E these are $ust some of the !ro%lems that dysfunctional !rocesses can create. "hat/s why it/s so im!ortant to im!ro&e !rocesses when they are not working well. .n this article# we/ll look at how you can do this. A%out *usiness Processes Processes can %e formal or informal. Formal !rocesses E also known as !rocedures E are documented# and ha&e well esta%lished ste!s. For e3am!le# you might ha&e !rocedures for recei&ing and su%mitting in&oices# or for esta%lishing relationshi!s with new clients. Formal !rocesses are !articularly im!ortant when there are safety related# legal or financial reasons for following !articular ste!s. .nformal !rocesses are more likely to %e ones that you ha&e created yourself# and you may not ha&e written them down. For e3am!le# you might ha&e your own set of ste!s for noting meeting actions# carrying out market research# or communicating new leads. "he .m!ortance of +fficient Processes "hese different kinds of !rocesses ha&e one thing in common' they/re all designed to streamline the way that you and your team work. When e&eryone follows a well tested set of ste!s# there are fewer errors and delays# there is less du!licated effort# and staff and customers feel more satisfied. Processes that don/t work can lead to numerous !ro%lems. For e3am!le'

Customers may com!lain a%out !oor !roduct 1uality or %ad ser&ice. Colleagues get frustrated. Work may %e du!licated# or not done. Costs increase. ,esources are wasted. *ottlenecks can de&elo!# causing you to miss deadlines. 0ote: .n this article# we focus on incremental !rocess change# aimed at im!ro&ing e3isting !rocesses. .f you need to start again from first !rinci!les# see our article on Business 2rocess 1eengineering . .m!ro&ing :our "eam/s Processes When you encounter some of the !ro%lems mentioned a%o&e# it may %e time to re&iew and u!date the rele&ant !rocess. Follow these ste!s to do this'

-te! @' Ma! the Process ;nce you/&e decided which !rocess you want to im!ro&e# document each ste! using a Flowchart or a wim Lane !iagram . "hese tools show the ste!s in the !rocess &isually. 5-wim lane diagrams are slightly more com!le3 than flowcharts# %ut they/re great for !rocesses that in&ol&e se&eral !eo!le or grou!s.6 .t/s im!ortant to e3!lore each !hase in detail# as some !rocesses may contain su% ste!s that you/re not aware of. Consult !eo!le who use the !rocess regularly to ensure that you don/t o&erlook anything im!ortant. -te! F' Analy)e the Process Use your flow chart or swim lane diagram to in&estigate the !ro%lems within the !rocess. Consider the following 1uestions'

Where do team mem%ers or customers get frustrated4 Which of these ste!s creates a $ottlenec% 4 Where do costs go u! and=or 1uality go down4 Which of these ste!s re1uires the most time# or causes the most delays4 First use 1oot Cause Analysis # Cause and -ffect Analysis # or +he 5 &hys to trace the !ro%lem to its origins. After all# if you only fi3 the sym!toms# the !ro%lems will continue. -!eak to the !eo!le who are affected %y the !rocess. What do they think is wrong with it4 And what suggestions do they ha&e for im!ro&ing it4 "hen look at other teams in your organi)ation. What tactics ha&e they de&elo!ed to deal with similar situations4 -te! G' ,edesign the Process :ou/re now going to redesign the !rocess to eliminate the !ro%lems you ha&e identified. .t/s %est to work with the !eo!le who are directly in&ol&ed in the !rocess. "heir ideas may re&eal new a!!roaches# and# also# they/re more likely to %uy into change if they/&e %een in&ol&ed at an early stage. First# make sure that e&eryone understands what the !rocess is meant to do. "hen# e3!lore how you can address the !ro%lems you identified in ste! F 5Brainstorming can hel! here6. Iote down e&eryone/s ideas for change# regardless of the costs in&ol&ed. "hen# narrow your list of !ossi%le solutions %y considering how your team/s ideas would translate to a real life conte3t. -tart %y conducting an Impact Analysis to understand the full effects of your team/s ideas. "hen# carry out a 1is% Analysis and a Failure ,ode and -ffects Analysis to s!ot !ossi%le risks and !oints of failure within your redesigned !rocess. (e!ending on your organi)ation/s focus# you may also want to consider Customer -.perience ,apping at this stage. "hese tests will hel! you to understand the full conse1uences of each !ro!osed idea# and allow you to make the right decision for e&eryone. ;nce you and your team agree on a !rocess# create new diagrams to document each ste!. -te! H' Ac1uire ,esources :ou now need to secure the resources you need to im!lement the new !rocess. 9ist e&erything that you/ll need to do this. "his could include guidance from senior managers or from colleagues in other de!artments# such as ." or H,. Communicate with each of these grou!s# and make sure that they understand how this new !rocess will %enefit the organi)ation as a whole. :ou may need to prepare a $usiness case to demonstrate this. -te! K' .m!lement and Communicate Change .t/s likely that im!ro&ing your %usiness !rocess will in&ol&e changing e3isting systems# teams# or !rocesses. For e3am!le# you may need to ac1uire new software# hire a new team mem%er# or organi)e training for colleagues. ,olling out your new !rocess could %e a pro3ect in itself# so !lan and manage this carefully. Allocate time for dealing with teething trou%les# and consider running a !ilot first# to check for !otential !ro%lems. 7ee! in mind that change is not always easy. Peo!le can %e resistant to it# es!ecially when it in&ol&es a !rocess that they/&e %een using for some time. :ou can use tools such as the Change Curve and (otter4s 5# tep Change ,odel to hel! o&ercome resistance to change. -te! J' ,e&iew the Process Few things work !erfectly# right from the start. -o# after you roll out the new !rocess# closely monitor how things are going in the weeks and months that follow# to ensure that the !rocess is !erforming to e3!ectations. "his monitoring will also allow you to fi3 !ro%lems as they occur.

Make it a !riority to ask the !eo!le in&ol&ed with the new !rocess how it/s working# and what E if any E frustrations they/re e3!eriencing. Ado!t continuous im!ro&ement strategies such as (ai)en . -mall im!ro&ements made regularly will ensure that the !rocess stays rele&ant and efficient. 7ey Points A %usiness !rocess is a set of ste!s or tasks that you and your team use re!eatedly to create a !roduct or ser&ice# reach a s!ecific goal# or !ro&ide &alue to a customer or su!!lier. When !rocesses work well# they can significantly im!ro&e efficiency# !roducti&ity# and customer satisfaction. Howe&er# !rocesses that don/t work can cause frustration# delays# and financial loss. "o im!ro&e a %usiness !rocess# follow these ste!s. @. F. G. H. K. J. Ma! !rocesses. Analy)e the !rocess. ,edesign the !rocess. Ac1uire resources. .m!lement and communicate change. ,e&iew the !rocess. 7ee! in mind that you/ll need to im!ro&e most !rocesses at some !oint. Iew goals# new technology# and changes in the %usiness en&ironment can all cause esta%lished !rocesses to %ecome inefficient or outdated. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/impro*ing-+#sinessprocesses.htm#sthash.,mh-+.i/.dp#$ idening the -earch for -olutions

< i-tock!hoto=ryasick (ianne/s %oss has asked her to come u! with some ideas for lowering o&erhead costs in her office. .f she doesn/t come u! with %ig enough cuts# she may ha&e to start laying off staff. Clearly# she doesn/t want to ha&e to do this. Her only o!tion is to find more ways to reduce costs. Howe&er# after %rainstorming !ossi%le solutions# she hasn/t had many credi%le ideas. (oes this situation sound familiar4 We often ha&e to sol&e !ro%lems that ha&e no easy solution. "his can %e frustrating# es!ecially when we/re on a deadline# and when normal !ro%lem sol&ing a!!roaches ha&en/t worked. "his is where Conce!t Fans are useful. "hey hel! you widen your search for solutions if you ha&e e3hausted all o%&ious o!tions. ... for the complete article: - - See more at: http://www.mindtools.com/pages/article/newCT_&6.htm#sthash.l)0(112d.dp#$

Affinity (iagrams ;rgani)ing .deas into Common "hemes

?rou! similar items together.. < i-tock!hoto=mura .s it e&er a %ad thing to ha&e too many ideas4 Pro%a%ly not# %ut if you/&e e&er e3!erienced information o&erload or struggled to know where to %egin with a wealth of data you/&e %een gi&en# you may ha&e wondered how you can use all of these ideas effecti&ely. When there/s lots of 2stuff2 coming at you# it is hard to sort through e&erything and organi)e the information in a way that makes sense and hel!s you make decisions. Whether you/re %rainstorming ideas# trying to sol&e a !ro%lem or analy)ing a situation# when you are dealing with lots of information from a &ariety of sources# you can end u! s!ending a huge amount of time trying to assimilate all the little %its and !ieces. ,ather than letting the dis$ointed information get the %etter of you# you can use an affinity diagram to hel! you organi)e it. Also called the 7J method# after its de&elo!er 7awakita Jiro 5a Ja!anese anthro!ologist6 an affinity diagram hel!s to synthesi)e large amounts of data %y finding relationshi!s %etween ideas. "he information is then gradually structured from the %ottom u! into meaningful grou!s. From there you can clearly 2see2 what you ha&e# and then %egin your analysis or come to a decision.

Affinity diagrams can %e used to'

(raw out common themes from a large amount of information. (isco&er !re&iously unseen connections %etween &arious ideas or information. *rainstorm root causes and solutions to a !ro%lem. *ecause many decision making e3ercises %egin with %rainstorming# this is one of the most common a!!lications of affinity diagrams. After a %rainstorming session there are usually !ages of ideas. "hese won/t ha&e %een censored or edited in any way# many of them will %e &ery similar# and many will also %e closely related to others in a &ariety of ways. What an affinity diagram does is start to grou! the ideas into themes.

From the chaos of the randomly generated ideas comes an insight into the common threads that link grou!s of them together. From there the solution or %est idea often emerges 1uite naturally. "his is why affinity diagrams are so !owerful and why the Ja!anese Union of -cientists and +ngineers consider them one of the 2se&en management tools.2 Affinity diagrams are not the domain of %rainstorming alone though. "hey can %e used in any situation where'

"he solution is not readily a!!arent. :ou want to reach a consensus or decision and ha&e a lot of &aria%les to consider# conce!ts to discuss# ideas to connect# or o!inions to incor!orate. "here is a large &olume of information to sort through. Here is a ste! %y ste! guide to using affinity diagrams along with a sim!le e3am!le to show how the !rocess works. How to Use the "ool (escri%e the !ro%lem or issue

@.

@.

?enerate ideas %y $rainstorming . Write each idea on a se!arate sticky note and !ut these on a wall or fli! chart. ,emem%er to' +m!hasi)e &olume. -us!end $udgment. Piggy%ack on other ideas.

@.

-ort ideas into natural themes %y asking' What ideas are similar4 .s this idea connected to any of the others4

.f you/re working in a team' -e!arate into smaller grou!s of G to H !eo!le. -ort the ideas .I -.9+IC+ so that no one is influenced %y anyone else/s comments. 7ee! mo&ing the cards around until consensus is reached.

@.

F.

Create total grou! consensus' (iscuss the shared meaning of each of the sorted grou!s. Continue until consensus is reached. .f some ideas do not fit into any theme# se!arate them as 2stand alone2 ideas. .f some ideas fit into more than one theme# create a du!licate card and !ut it in the !ro!er grou!. "ry to limit the total num%er of themes to %etween fi&e and nine. Create theme cards 5also called affinity cards or header cards6' Create a short G K word descri!tion for the relationshi!. .f you/re working in a grou!# do this together# out loud. Write this theme=header on a %lank card and !lace at the to! of the grou! it descri%es. Create a 2su!er headers2 where necessary to grou! themes. Use a 2su% header2 card where necessary as well.

@.

Continue to grou! the themes=headers until you ha&e reached the %roadest# %ut still meaningful# categories !ossi%le' (raw lines connecting the su!er headers# themes=headers# and su% headers. :ou/ll end u! with a hierarchical structure that shows# at a glance# where the relationshi!s are. "i!' ?rou!ing ideas under headings# and then grou!ing headings under su!er headers in an affinity diagram is a !ractical way of 2chunking2 information generated in %rainstorming sessions# during !rocess ma!!ing# or e&en a !lanning e3ercise. Click here for more information on Chun%ing . 7ey Points Affinity diagrams are great tools for assimilating and understanding large amounts of information. When you work through the !rocess of creating relationshi!s and working %ackward from detailed information to %road themes# you get an insight you would not otherwise find. "he ne3t time you are confronting a large amount of information or num%er of ideas and you feel o&erwhelmed at first glance# use the affinity diagram a!!roach to disco&er all the hidden linkages. When you cannot see the forest for the trees# an affinity diagram may %e e3actly what you need to get %ack in focus. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er for $ust S@ - See more at: http://www.mindtools.com/pages/article/newTMC_16.htm#sthash.134,wc5/.dp#$

-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_04.htm#sthash.1wenQMc .dp!"-ystems (iagrams Understanding How Factors Affect ;ne Another

< i-tock!hoto=me&ans -ystem diagrams are !owerful tools that hel! you to understand how com!le3 systems work. -ystems analy)ed may %e anything from %usinesses# through %iological !o!ulation models# to the im!act of social !olicy# etc. -ystem diagrams are !articularly hel!ful in showing you how a change in one factor may im!act elsewhere. "hey are e3cellent tools for flushing out the long term im!acts of a change. .m!ortantly# a good system diagram will show how changing a factor may feed %ack to affect itself0 (rawing a system diagram is a good way of starting to %uild a com!uter model. "he techni1ue hel!s you to ma! out the structure of the system to %e modeled. .t shows the factors and relationshi!s that are im!ortant# and hel!s you to start 1uantifying the linkages %etween factors. How to Use the "ool ,elationshi!s *etween Factors At the heart of the use of system diagrams is the idea of linking factors to show a relationshi! %etween them. For e3am!le a com!any may link the factors of !roduct 1uality and customer satisfaction. .t %elie&es that as the 1uality of its goods change# so will customers/ ha!!iness with them. We show this as an arrow linking the two factors'

"he shows that the factors mo&e in the -ame way E as 1uality im!ro&es# so will the ha!!iness of customers. "he arrow shows the direction of the relationshi!' raising customer ha!!iness does not necessarily raise the 1uality of the goods0 "hese relationshi!s can also work the other way. "he com!any may link !rice with the customers/ !erce!tions of the /good &alue/ of its goods. "his is shown %elow'

"he 6 shows that the relationshi! works in the o!!osite way' in this case as you raise !rice# customers/ !erce!tions of good &alue reduce. Feed%ack 9oo!s Feed%ack is an im!ortant conce!t in the use of system diagrams E in &ery many cases changing one factor will im!act on another factor# which will then affect the first. Feed%ack will either reduce the im!act of the change# or will am!lify it.

*alancing 9oo!s Where feed%ack reduces the im!act of a change# we call this a *alancing 9oo!. "he e3am!le %elow shows an e3am!le of a %alancing loo!# where an under resourced ser&ice com!any is trying to raise 1uality'

.n this situation# im!ro&ing the 1uality of ser&ice leads to im!ro&ed customer satisfaction# which leads to an increase in demand for the com!any/s ser&ice. .n trying to meet this demand# the com!any has less time to de&ote to indi&idual customers# which reduces its a%ility to im!ro&e 1uality further. Iote the small circular arrow in the middle of the loo!. "his shows which way round the loo! is running. .n com!le3 diagrams with many loo!s# this arrow will %e la%eled and will identify loo!s. "he gra!h %elow shows how 1uality of ser&ice might &ary with time in the e3am!le a%o&e'

,einforcing 9oo!s Where feed%ack increases the im!act of a change# we call this a ,einforcing 9oo!. "he e3am!le %elow shows an e3am!le of a theatre trying to im!ro&e its !rofita%ility %y in&esting more in !roductions.

As more in&estment is !ut into a !roduction# the theatre is a%le to !ut on more la&ish !lays with more famous actors. *etter !lays should %ring %etter re&iews# and therefore higher ticket sales. "his should lead to higher !rofita%ility# and therefore more money a&aila%le to in&est in future !roductions. A gra!h showing how ticket sales might &ary against time is shown %elow'

Iote that this assumes that in&estment is increasing as time goes on. .t also ignores some im!ortant facts' firstly that there are only a certain num%er of seats in the theatre# and secondly that e3ternal factors such as com!etition and market saturation will e&entually limit growth. ;n a system diagram showing the way that the theatre o!erates# these factors would %e shown as %alancing loo!s im!acting on this reinforcing loo!. +3ternal Factors "he system diagrams we ha&e looked at so far com!letely ignore the im!act of these e3ternal factors on them. .n our %alancing loo! e3am!le a%o&e we assumed that demand was raised only as customers %ecame more satisfied. .n reality demand is $ust as likely to %e affected %y the state of the economy. "his is shown in the modified diagram %elow'

We show an e3ternal factor as a la%eled relationshi! arrow !ointing to the a!!ro!riate !art of the system diagram. ?a!s .n our reinforcing loo! e3am!le a%o&e we related sales of theatre seats to in&estment in !roductions. What we were not a%le to %uild into the model was the fact that there is a limited num%er of seats in the theatre. .ne&ita%ly this will ca! the growth of ticket sales as the theatre will seriously u!set customers if it sells more tickets than it has seats a&aila%le0 We %uild this into our model with the idea of a ga!. "here is a ga! %etween the num%er of seats a&aila%le 5an e3ternal factor we ha&e not yet %uilt into our model6# and the num%er of seats used 5tickets sold6. As the theatre sells more tickets# the si)e of this ga! reduces. At a !articular !oint it cannot sell any more tickets. .ncreases in in&estment %eyond this !oint may not yield any more !rofit. We show this %y modifying our diagram to %oth show %oth the e3ternal factor of the limit of the num%er of seats# and to show the ga!'

When all seats are sold# i.e. when seats a&aila%le E seats %ought T B# then !rofit will not rise any higher unless other factors are %rought into the system. Iote that it is &ery im!ortant to get the ga! definition correct for your model. (elay "he im!act of delay is the final area we need to consider in our system diagrams. .deally when we make a change to a system it should ad$ust immediately to its new state. .n reality there is almost always a delay %efore other factors ad$ust. "his delay may occur in a mechanical system sim!ly as a result of inertia and friction. .n a human system it will occur as !eo!le take time to communicate# get used to new ideas# and im!lement change. We can show this delay in a sim!le model using antelo!es and cheetahs. As the num%er of antelo!es rises# more food is a&aila%le for the cheetahs. More cheetahs will therefore sur&i&e# and will %e a%le to %reed. ;ne !art of the delay within this system is gi&en %y the length of time it takes for a cheetah to %e %orn and grow to maturity. "he other !art occurs as star&ing cheetahs take time to die. Feed%ack occurs as cheetahs kill antelo!es. "he higher the num%er of cheetahs# the greater will %e their im!act on the antelo!e !o!ulation. "he system %elow shows this'

Iote the dou%le slash on the line showing the relationshi! %etween the antelo!e and cheetah !o!ulations. "his shows that some form of delay is slowing the change of the related factor. .f there was no delay within the system# we might e3!ect to see a gra!h showing the num%er of cheetahs o&er time like the one %elow'

Here ad$ustment would %e immediate. Any change in the antelo!e !o!ulation would %e instantly matched %y an increase in the cheetah !o!ulation. "hese additional cheetahs would eat the additional antelo!es# and then die immediately. "he delay in the system causes it to %eha&e in a different way'

Firstly the cheetah !o!ulation will take time to increase Ie3t# the large !o!ulation of cheetahs will continue to %reed as food starts to %ecome scarce. "his num%er of cheetahs will cause a %ig reduction in the num%er of antelo!es. "his will then lead to a crash in cheetah !o!ulation as animals star&e. "he antelo!e !o!ulation will then reco&er as there will %e fewer cheetahs to restrict their num%ers. .f nothing else has any im!act on this system# then cheetah num%ers may oscillate as shown %elow'

"his occurs as the cheetah !o!ulation continually o&er ad$usts# first in growth# and then in decline. .n this system# the longer it takes for a cheetah to %reed and star&e E i.e. the greater the delay E the greater will %e the &ariations in cheetah !o!ulations. .m!ro&ing the -ystems Model "he models we ha&e looked at so far ha&e %een sim!le E they ha&e ignored many !ossi%le im!acts on each system. For e3am!le# in our model of antelo!es and cheetahs# we ha&e ignored the im!act of disease# drought# human acti&ity# etc. We im!ro&e the model %y %uilding in as many of these e3ternal factors as we can think of. We can then sim!lify it %y eliminating those factors that ha&e a negligi%le im!act. +3ternal factors might %e'

Iatural E weather# natural resources# disease# en&ironmental change# etc. "echnological E new technologies# changes in technology# etc. Human E !sychological# emotional# am%itions# e3!ectations# etc. Political E ideology# corru!tion# effecti&eness# interest# etc. -ocial E &alues# social inertia# traditions# !hiloso!hies# etc. Financial E state of the economy# ca!ital a&aila%le# etc. Ultimately you may end u! with a model made u! of a num%er of reinforcing loo!s# %alancing loo!s and e3ternal factors. "he e3am!le %elow shows a more so!histicated diagram of the antelo!es and cheetahs system'

0ote: "his diagram is an e3am!le only and does not necessarily reflect how antelo!e and cheetah !o!ulations o!erate in real life. -ystems (iagrams as the *asis of Com!uter Models ;nce you ha&e esta%lished the relationshi!s %etween factors on your diagram# you can look to see if you can !ut num%ers to the relationshi!s. .n the e3am!le a%o&e you may find that if drought hal&es the amount of grass a&aila%le to antelo!es# that the antelo!e !o!ulation reduces %y one third. :ou can %uild this relationshi! into a com!uter model. A useful way of starting this with sim!le and moderately com!le3 models is to %uild the model on a s!readsheet. :ou can use this model to make !redictions %y changing factors within it. "his would allow you to assess the likely im!act on your system of e3ternal changes# and in&estigate the effect of changes you might make within the system. 7ey Points -ystems diagrams allow you to model the way in which com!le3 systems work. "hey hel! you to think through the way in which the factors within a system interact and feed %ack u!on themsel&es. :ou should now %e a%le to analy)e'

How factors are related# and how one factor will change when another changes. How factors may feed %ack in either %alancing loo!s or reinforcing loo!s. How e3ternal factors im!act on the system. How ga!s o!erate. How delay affects the system. All the com!le3ities of a system. "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er - See more at: http://www.mindtools.com/pages/article/newTMC_&4.htm#sthash.0wen6Mc(.dp#$

(ecision Making "echni1ues How to Make *etter (ecisions

< i-tock!hoto

(ecision making is an essential leadershi! skill. .f you can learn how to make timely# well considered decisions# then you can lead your team to well deser&ed success. .f# howe&er# you make !oor decisions# your time as a leader will %e %rutally short. "he 789 techniques e3!lained in this section hel! you to make the $est decisions possi$le with the information a&aila%le. "hese tools hel! you ma! out the likely conse1uences of decisions# %alance different factors# and choose the %est courses of action to take. -tart %y taking our :ow *ood is ;our !ecision ,a%ing' self test# and then e3!lore different decision making tools in detail. .n !articular# take a look at our sections on Choosing Between 6ptions# and !eciding &hether to *o Ahead. "he Browse $y Category %o3 will hel! you target s!ecific skills# while you can look through the list $elow to find interesting to!ics. *rowse %y Category - See more at: http://www.mindtools.com/pages/main/newM7_T8%.htm#sthash..%h(89:H.dp#$

(ecision Making -kills E -tart Here0

How to make good decisions# with James Manktelow & Amy Carlson.

All of us ha&e to make decisions e&ery day. -ome decisions are relati&ely straightforward and sim!le' .s this re!ort ready to send to my %oss now4 ;thers are 1uite com!le3' Which of these candidates should . select for the $o%4 -im!le decisions usually need a sim!le decision making !rocess. *ut difficult decisions ty!ically in&ol&e issues like these'

<ncertainty E Many facts may not %e known. Comple.ity E :ou ha&e to consider many interrelated factors. :igh#ris% consequences E "he im!act of the decision may %e significant. Alternatives E +ach has its own set of uncertainties and conse1uences. Interpersonal issues E .t can %e difficult to !redict how other !eo!le will react. With these difficulties in mind# the %est way to make a com!le3 decision is to use an effecti&e !rocess. Clear !rocesses usually lead to consistent# high 1uality results# and they can im!ro&e the 1uality of almost e&erything we do. .n this article# we outline a !rocess that will hel! im!ro&e the 1uality of your decisions. A -ystematic A!!roach to (ecision Making A logical and systematic decision making !rocess hel!s you address the critical elements that result in a good decision. *y taking an organi)ed a!!roach# you/re less likely to miss im!ortant factors# and you can %uild on the a!!roach to make your decisions %etter and %etter. "here are si3 ste!s to making an effecti&e decision'

@. F.

Create a constructi&e en&ironment. ?enerate good alternati&es.

G. H. K. J.

+3!lore these alternati&es. Choose the %est alternati&e. Check your decision. Communicate your decision# and take action. Here are the ste!s in detail' -te! @' Create a constructi&e en&ironment "o create a constructi&e en&ironment for successful decision making# make sure you do the following'

-sta$lish the o$3ective E (efine what you want to achie&e. Agree on the process E 7now how the final decision will %e made# including whether it will %e an indi&idual or a team %ased decision. "he "room#;etton#=ago ,odel is a great tool for determining the most a!!ro!riate way of making the decision. Involve the right people E ta%eholder Analysis is im!ortant in making an effecti&e decision# and you/ll want to ensure that you/&e consulted stakeholders a!!ro!riately e&en if you/re making an indi&idual decision. Where a grou! !rocess is a!!ro!riate# the decision making grou! E ty!ically a team of fi&e to se&en !eo!le E should ha&e a good re!resentation of stakeholders. Allow opinions to $e heard E +ncourage !artici!ants to contri%ute to the discussions# de%ates# and analysis without any fear of re$ection from the grou!. "his is one of the %est ways to avoid groupthin% . "he tepladder +echnique is a useful method for gradually introducing more and more !eo!le to the grou! discussion# and making sure e&eryone is heard. Also# recogni)e that the o%$ecti&e is to make the %est decision under the circumstances' it/s not a game in which !eo!le are com!eting to ha&e their own !referred alternati&es ado!ted. =liU ,a%e sure you4re as%ing the right question E Ask yourself whether this is really the true issue. "he 5 &hys techni1ue is a classic tool that hel!s you identify the real underlying !ro%lem that you face. <se creativity tools from the start E "he %asis of creati&ity is thinking from a different !ers!ecti&e. (o this when you first set out the !ro%lem# and then continue it while generating alternati&es. ;ur article *enerating 0ew Ideas will hel! you create new connections in your mind# %reak old thought !atterns# and consider new !ers!ecti&es. -te! F' ?enerate ?ood Alternati&es "his ste! is still critical to making an effecti&e decision. "he more good o!tions you consider# the more com!rehensi&e your final decision will %e. When you generate alternati&es# you force yourself to dig dee!er# and look at the !ro%lem from different angles. .f you use the mindset Vthere must %e other solutions out there#/ you/re more likely to make the %est decision !ossi%le. .f you don/t ha&e reasona%le alternati&es# then there/s really not much of a decision to make0 Here/s a summary of some of the key tools and techni1ues to hel! you and your team de&elo! good alternati&es.

?enerating .deas Brainstorming is !ro%a%ly the most !o!ular method of generating ideas. Another a!!roach# 1everse Brainstorming # works similarly. Howe&er# it starts %y asking !eo!le to %rainstorm how to achie&e the o!!osite outcome from the one wanted# and then re&ersing these actions. "he Charette 2rocedure is a systematic !rocess for gathering and de&elo!ing ideas from &ery many stakeholders. Use the Crawford lip &riting +echnique to generate ideas from a large num%er of !eo!le. "his is an e3tremely effecti&e way to make sure that e&eryone/s ideas are heard and gi&en e1ual weight# irres!ecti&e of the !erson/s !osition or !ower within the organi)ation. Considering (ifferent Pers!ecti&es "he 1eframing ,atri. uses H Ps 5!roduct# !lanning# !otential# and !eo!le6 as the %asis for gathering different !ers!ecti&es. :ou can also ask outsiders to $oin the discussion# or ask e3isting !artici!ants to ado!t different functional !ers!ecti&es 5for e3am!le# ha&e a marketing !erson s!eak from the &iew!oint of a financial manager6. .f you ha&e &ery few o!tions# or an unsatisfactory alternati&e# use a Concept Fan to take a ste! %ack from the !ro%lem# and a!!roach it from a wider !ers!ecti&e. "his often hel!s when the !eo!le in&ol&ed in the decision are too close to the !ro%lem. Appreciative Inquiry forces you to look at the !ro%lem %ased on what/s Vgoing right#/ rather than what/s Vgoing wrong./ ;rgani)ing .deas "his is es!ecially hel!ful when you ha&e a large num%er of ideas. -ometimes se!arate ideas can %e com%ined into one com!rehensi&e alternati&e. Use Affinity !iagrams to organi)e ideas into common themes and grou!ings.

-te! G' +3!lore the Alternati&es When you/re satisfied that you ha&e a good selection of realistic alternati&es# then you/ll need to e&aluate the feasi%ility# risks# and im!lications of each choice. Here# we discuss some of the most !o!ular and effecti&e analytical tools. ,isk .n decision making# there/s usually some degree of uncertainty# which ine&ita%ly leads to risk. *y e&aluating the risk in&ol&ed with &arious o!tions# you can determine whether the risk is managea%le.

1is% Analysis hel!s you look at risks o%$ecti&ely. .t uses a structured a!!roach for assessing threats# and for e&aluating the !ro%a%ility of e&ents occurring E and what they might cost to manage. .m!lications Another way to look at your o!tions is %y considering the !otential conse1uences of each. i. +hin%ing :ats hel!s you e&aluate the conse1uences of a decision %y looking at the alternati&es from si3 different !ers!ecti&es. Impact Analysis is a useful techni1ue for %rainstorming the Vune3!ected/ conse1uences that may arise from a decision. Oalidation (etermine if resources are ade1uate# if the solution matches your o%$ecti&es# and if the decision is likely to work in the long term. tar$ursting hel!s you think a%out the 1uestions you should ask to e&aluate an alternati&e !ro!erly. "o assess !ros and cons of each o!tion# use Force Field Analysis # or use the 2lus#,inus# Interesting a!!roach. Cost#Benefit Analysis looks at the financial feasi%ility of an alternati&e. ;ur Bite# i)ed +raining session on 2ro3ect -valuation and Financial Forecasting hel!s you e&aluate each alternati&e using the most !o!ular financial e&aluation techni1ues. -te! H' Choose the *est Alternati&e After you ha&e e&aluated the alternati&es# the ne3t ste! is to choose %etween them. "he choice may %e o%&ious. Howe&er# if it isn/t# these tools will hel!' *rid Analysis # also known as a decision matri3# is a key tool for this ty!e of e&aluation. .t/s in&alua%le %ecause it hel!s you %ring dis!arate factors into your decision making !rocess in a relia%le and rigorous way. Use 2aired Comparison Analysis to determine the relati&e im!ortance of &arious factors. "his hel!s you com!are unlike factors# and decide which ones should carry the most weight in your decision. !ecision +rees are also useful in choosing %etween o!tions. "hese hel! you lay out the different o!tions o!en to you# and %ring the likelihood of !ro$ect success or failure into the decision making !rocess. For grou! decisions# there are some e3cellent e&aluation methods a&aila%le. When decision criteria are su%$ecti&e and it/s critical that you gain consensus# you can use techni1ues like 0ominal *roup +echnique and ,ulti#"oting . "hese methods hel! a grou! agree on !riorities# for e3am!le# so that they can assign resources and funds. "he !elphi +echnique uses multi!le cycles of anonymous written discussion and argument# managed %y a facilitator. Partici!ants in the !rocess do not meet# and sometimes they don/t e&en know who else is in&ol&ed. "he facilitator controls the !rocess# and manages the flow and organi)ation of information. "his is useful where you need to %ring the o!inions of many different e3!erts into the decision making !rocess. .t/s !articularly useful where some of these e3!erts don/t get on0 -te! K' Check :our (ecision With all of the effort and hard work that goes into e&aluating alternati&es# and deciding the %est way forward# it/s easy to forget to Vsense check/ your decisions. "his is where you look at the decision you/re a%out to make dis!assionately# to make sure that your !rocess has %een thorough# and to ensure that common errors ha&en/t cre!t into the decision making !rocess. After all# we can all now see the catastro!hic conse1uences that o&er confidence# grou!think# and other decision making errors ha&e wrought on the world economy. "he first !art of this is an intuiti&e ste!# which in&ol&es 1uietly and methodically testing the assum!tions and the decisions you/&e made against your own e3!erience# and thoroughly re&iewing and e3!loring any dou%ts you might ha&e. A second !art in&ol&es using a techni1ue like Blindspot Analysis to re&iew whether common decision making !ro%lems like o&er confidence# escalating commitment# or groupthin% may ha&e undermined the decision making !rocess.

G.
H.

K.

A third !art in&ol&es using a techni1ue like the Ladder of Inference to check through the logical structure of the decision with a &iew to ensuring that a well founded and consistent decision emerges at the end of the decision making !rocess. -te! J' Communicate :our (ecision# and Mo&e to Action0 ;nce you/&e made your decision# it/s im!ortant to e3!lain it to those affected %y it# and in&ol&ed in im!lementing it. "alk a%out why you chose the alternati&e you did. "he more information you !ro&ide a%out risks and !ro$ected %enefits# the more likely !eo!le are to su!!ort the decision. And with res!ect to im!lementation of your decision# our articles on 2ro3ect ,anagement and Change ,anagement will hel! you get this im!lementation off to a good start0 7ey Points An organi)ed and systematic decision making !rocess usually leads to %etter decisions. Without a well defined !rocess# you risk making decisions that are %ased on insufficient information and analysis. Many &aria%les affect the final im!act of your decision. Howe&er# if you esta%lish strong foundations for decision making# generate good alternati&es# e&aluate these alternati&es rigorously# and then check your decision making !rocess# you will im!ro&e the 1uality of your decisions. "ake our :ow *ood is ;our !ecision#,a%ing' 1ui) to find out how we/ll you/re doing all of these things now0 "his site teaches you the skills you need for a ha!!y and successful career> and this is $ust one of many tools and resources that you/ll find here at ,ind +ools. Click here for more# su%scri%e to our free newsletter# or $ecome a mem$er for $ust S@.

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