Donella Meadows is an impressive researcher in the field of complex systems (a corporation, an economy, a living body, a city, an ecosystem), which in the ’90 distilled years and years of research in something more easily understandable by anyone: the twelve leverage points to intervene in a system.

Complex systems studies are a big body of knowledge, made even more difficult by the counter-intuitiveness of many of the rules that regulate them. That’s why I think Donella made an excellent job here in trying to give an understandable approach to them, and even more, how to change them.

To understand how complex systems works, she starts by showing a simplified model of a system and how we can act on it:

The critical point to understand is that we have no direct influence on the state of the system itself, we can just act on the variables around it. I’ve been asked in the past how comes you have no direct influence: of course I have direct influence. With an example it’s simple to see why: if I want to control the quantity of water in a hoover dam, I can’t directly make the water appear: I can just control flows of water coming in and out. This process in some cases has very little delay, so might seem like direct intervention, but it isn’t. Delay is actually one of the leverage points.

Plus, we can only get a perceived state, not the real state, because its real state is too complex to get as a whole. By modelling that perceived state and seeing if it matches with the desired goal, we are then able to influence some variables in the system, trying to move it in the right direction.

This abstract model works, with the limitations of any model, on any kind of complex system: from organizations, to the planet as a whole, to teams, to a smart thermostat, and so on. Any system.

12 Leverage Points

Given we can’t change the system directly, Donella outlined a list variables you can act upon to influence it. She usually sort the leverage points in reversed order, to the more basic and least effective to the hardest to change but also most effective. I’m borrowing a lot of her words here in the attempt to be succinct but also as high fidelity as possible.

• 12. Constants
  Constant, parameters, numbers (like subsidies, taxes, air standards, minimum wage, research investments) define the rate at which things happen in the system.
• 11. Buffer Sizes
  Buffers are stabilizing elements. Big buffers make the system more stable, small buffers make it more subject to change. A good example of buffer is the money you keep in the bank: it helps you manage exceptional expenses.
• 10. Material Flows Structure
  This represent the structure of the system itself, how material stocks move through the system itself, and while changing it can in theory change a lot, in practice it’s very hard to do so. For example the baby-boom put strain on the elementary system, then high school, then jobs, then housing and then retirement, and there’s nothing changeable in that.
• 9. Delays
  They determine how much time passes between the moment a change is made on the system, and the moment when the effect of the change happens. You can clearly see how a long delay makes everything challenging, so being able to shorten it could lead to lots of benefits, if possible. Changing delays can have a big impact, but similar to flows structure they are very hard to change. If there’s energy shortage and you need to build a power plant, that takes time.
• 8. Negative Feedback Loops
  A negative feedback loop is a self-correcting logic composed by three elements: a goal to keep, a monitoring element, and a response mechanism. It is a mechanism that tries to keep a specific measurement around a specific goal. For example a thermostat has a goal temperature and it turns heating on to keep that temperature. While it is relatively simple to spot a loop in terms of mechanics, it’s harder in general. For example a law that grants more protection for whistleblowers is something that makes the feedback loop that controls the neutrality of a democracy stronger.
• 7. Positive Feedback Loops
  Positive feedback loops are built similarly to negative feedback loops, but instead of keeping a variable stable around a goal, they aim to reinforce it: the more it works, the more it gains power to work more. For example giving bonuses for every sales done is an incentive to sell more (even if we know that it damages the system as a whole more than the benefits of it), or the more you have in the bank the more interest you earn. Positive feedback loops are usually perceived as positive, but since they keep growing they can build up and damage the system in the long run if they aren’t controlled in some other way.
• 6. Information Flows Structure
  Creating new positive or negative feedback loops, changing how information is propagated and how it’s made visible in the system, these are all changes in the information flows structure.
  For example if you put the energy counter clearly visible to a family you make them more aware of how much they are consuming, and the effect is that they consume less. This basically creates a new negative feedback loop without changing any other parameter in the system.
• 5. Rules
  The rules of the system define its scope, its boundaries, its degrees of freedom. Incentives, punishments, constraints, are all rules of a system. Examples are everywhere, from the constitution (a set of do / do nots) to free speech to game rulebooks. These are strong leverage points, and they can be both written and unwritten.
• 4. Evolution
  This is the power to add, change, evolve or self-organize system structure. In biological systems that power is called evolution. In human economies it’s called technical advance or social revolution. In systems lingo it’s called self-organization. These are structural transformation of the system, usually due to new elements appearing, such as the currency or the computer. Variability, diversity, experimentation are usually a key element to make a system evolve, but they are hard to accept because they make “lose control” on the system given what they bring to the table is something new and as such still unknown.
• 3. Goals
  Goals have the power to transform and define each and every leverage point above. If you’re creating a system, like an organization, it’s relatively easy to see the goals because usually there’s someone to set them, and if there isn’t, then the organization is likely to have a problem. Leaders, managers, heads of state, have the power to modify or set new goals. If someone with this power says that the goal is to get a man on the Moon, well, a lot of the other variables are going to change to accomodate this goal.
• 2. Context Paradigms
  Everything, including goals, arise in specific mindsets, social contexts, beliefs. In a country with a low rate of tax evasion, you need very few rules that try to address that, you probably don’t even need to have “avoid tax evasion” as a goal anywhere. Egyptians built pyramids because believed in afterlife. These beliefs can be changed, and while in societies this can take a long time, in individuals can be a matter of an instant. Changing the paradigms from which a complex system emerge can be done by pointing out anomalies and failures. You work on active change, building more and more the new one. You don’t spend time with reactionaries.
• 1. Transcend Paradigms
  No paradigm however is true in an absolute sense, our understanding of this infinite universe is limited. So every paradigm can be embraced, and changed, and treated as a relative variable. There isn’t just a change from an old system to a new system, there’s the possibility of an infinity of them.

These twelve rules are an incredibly useful breakdown, and I’m sure can help you to both understand and manage complex systems better — such as an organization or a team, even if translating them from theory to practice might take some experimentation and work.

In a sense, the lowest levels of this list are the least effective to change, while the one at the top are the most effective. To a certain extent however the top ones, the ones with most leverage, require a wider perspective and often more power: the goal of a company can be done relatively easier if you’re the CEO, but requires lots of work and agreement if you’re not.

Thus, the ones that represent a leverage target for everyone are actually the ones in the middle.

Missing feedback is one of the most common causes of system malfunction. Adding or restoring information can be a powerful intervention, usually much easier and cheaper than rebuilding physical infrastructure.
[…]
There is a systematic tendency on the part of human beings to avoid accountability for their own decisions. That’s why there are so many missing feedback loops.

As you can imagine, I highly advise to read the full paper here.