Growth from a German perspective

Der Spiegel just published Can Economies Function without Growth?, which directly relates to some of the conversations we've held here in the past.

What do you think?

M. King Hubbert on growth

I've written about growth from time to time; perhaps you'd be more interested in what M. King Hubbert said in 1974 in Hubbert on the Nature of Growth.

If you'd like to read more on Hubbert's model, see Evaluating Hubbert's Peak and Improvements? by Ben Witten.

The (un)Sustainable Commentator on growth

Just to keep the question series on growth going, here's what Wayne Maceyka is saying on The (un)Sustainable Commentator.

Check out Wayne's blog, too, and his extensive list of links in the right-hand column.

Questions on growth: a follow-up

After all of our good questions about growth, we've gone silent, so I was about to change topics. Then I saw The Growth Bubble on Tom Fiddaman's MetaSD and its link to Thomas Friedman's The Inflection Is Near?

It's a Friday night after a long week, so I'll leave it to you to make the editorial comments.

Questions on growth: a pre-evaluation

You've helped me accumulate quite a list of questions about growth, and I thank you. Here they are once again:

1. What if (aggregate) growth went to 0% forevermore? What would it mean to you, to your business, and to your personal life?
   
   
2. Do you think there's reason to believe growth could stay at 0% or below for a very long time? Is that of necessity either good or bad, or does its value depend upon our reaction?
   
   
3. Is it a good idea to try to keep growth positive? Why? Are there any downsides? Are there indeed any limits to growth, either in terms of annual growth rates or the overall size of anything?
   
   
4. As attractive as growth may be in the current worldview, systems ideas would indicate that the longer we try to keep growth going once we've exceeded the carrying capacity of the system (the planet), the worse the eventual and inexorable fall and the lower the eventual sustainable standard of living. If you favor continued growth, how will you overcome those seemingly inviolate systems limitations?
   
   
5. If the systems theories play out in the real world, how do we reasonably make the transition from our current state to a new, equilibrium state in ways that attend to people (social justice, the ability to procure what we need for life, the ability to make a difference or find purpose, etc.) and the natural environment (sustainability, the depletion of nonrenewable resources)?
   
   
6. Can we make such a transition a good thing and not a painful thing?
   
   
7. What do we owe our descendants? For how far into the future do we bear responsibility?
   
   
8. If these systems ideas have merit, what changes in mindset (in worldview) do we need to survive emotionally as well as physically? For but one example, negative growth has long meant failure for people leading businesses, but that could be the way of the future. Can we realistically change our mindsets and our systems so that satisfying needs (instead of generating growth) defines success?
   
   
9. In case these systems ideas don't apply in this situation (e.g., if technology can once again save us even in the face of decreasing energy supplies and rising population), can we design robust actions that work well in either eventuality? How do you answer Tom Fiddaman's questions about the sufficiency of technology?
   
   
10. Can the current economic "engine" be morphed into one based on such a radically different paradigm?
    
    
11. If we change to a different paradigm that's not built on growth, can we figure out how to get money into the hands of all who need it? Or will our reaction to low or zero growth be to trim people out of companies to keep the organizations viable while building unemployment?
    
    
12. Is an economy built on lending inexorably drawn to growth for survival?
    
    
13. How we to encourage understanding that quality of life can still improve while quantity of consumption decreases?
    
    
14. In light of the current economic crisis, how can we best protect the economy's life-supporting functions such food production, health care and ecosystem services amidst the chaos that will undoubtedly trim the less important financial and luxury markets?
    
    
15. What new national and international policies and institutions do we need to design in order to prepare for a transition to a steady state, or true cost, economy that recognizes the need for investments in natural and social capital as well as financial?
    
    
16. What would constitute the analogy of complex relationships those with "imaginary" components?
    
    
17. Will a state of zero net growth become a state of dynamic economic equilibrium, and will this new state actually make markets MORE efficient, and effective at elevating the state of the common man?
    
    
18. Why is our world so hung up on growth to begin with? How did growth get into our DNA? Has it always been there or is it just since the invention of the steam engine?
    
    
19. What do you do if evolution favors individuals or groups who aspire to growth?
    
    
20. What if the US and EU go green and China and Russia don't?
    
    
21. What if growth had to be -X% per year for Y years in order to reach a sustainable steady state (in material throughput)? How might social systems accommodate that peacefully?
    
    
22. What if technology has limited potential?
    
    
23. What would an evolutionary landscape that favored sustainability look like?
    
    
24. Can wealth can go up while the material flow goes down? How?
    
    

I've numbered them this time for easy reference. If you want to see who contributed each question, refer back to the original posting.

Now the next step: how would one go about answering these questions?

Before getting to the process, though, I'm curious how you think we would recognize a good answer. I don't expect that we'll all agree, but, rather than getting into a bunch of statements about our respective positions, I think we might learn more by first thinking about the criteria by which we'll evaluate potential answers.

I suspect our answers to that may be all over the map. As food for thought, I offer up the questions critical systems heuristics offers about motivation, control, expertise, and legitimacy. You can find one article by Bob Williams and Martin Reynolds on Bob's Web site: go to Systems Stuff and scroll down to the article called Critical Systems Thinking. You can see another introduction by Werner Ulrich here. He lists the questions starting on page 11, but you probably need to read the earlier pages to understand what it all means.

Once we have some idea how we'll evaluate potential answers (and how we think we should evaluate them), then we can think about picking approaches, methods, methodologies, or processes we think might be of use for each of these 24 questions.

So what do you think? How will you evaluate the answers to these questions? How do you think you should evaluate them?

Questions on growth

From time to time, I've posted some of my musings about growth. I had a related email discussion recently with a colleague, and one of my emails to him contained questions that I'd like to ask you, too.

We know the world's economies are currently experiencing hard economic times. Yet I wonder if thinking of this in terms of business cycles is the best way today. Jay Forrester has written, "Our greatest challenge now is handling the transition from growth to equilibrium".

If you think of the world in terms of business cycles, getting from bad times to good is a largely waiting game, assuming you've saved enough in the good times to carry you through the bad. Before refrigeration and long-distance transportation of food, that happened on an annual basis, too: you had to save enough food from this year's harvest to survive to next year's. Admittedly, some organizations are good at gaining ground during these periodic "yellow flag" situations, but many of us will just try to survive until the good times return.

If Forrester and others are correct and we're really moving from a long period of growth into an even longer period (possibly forever, at least in practical terms) of relative equilibrium, then dealing with those (equilibrium) times may require a fundamentally different mindset (as Cynthia McEwen and John Schmidt would remind us), not just a changed process.

• What if (aggregate) growth went to 0% forevermore? What would it mean to you, to your business, and to your personal life?


• Do you think there's reason to believe growth could stay at 0% or below for a very long time? Is that of necessity either good or bad, or does its value depend upon our reaction?


• Is it a good idea to try to keep growth positive? Why? Are there any downsides? Are there indeed any limits to growth, either in terms of annual growth rates or the overall size of anything?


• As attractive as growth may be in the current worldview, systems ideas would indicate that the longer we try to keep growth going once we've exceeded the carrying capacity of the system (the planet), the worse the eventual and inexorable fall and the lower the eventual sustainable standard of living. If you favor continued growth, how will you overcome those seemingly inviolate systems limitations?


• If the systems theories play out in the real world, how do we reasonably make the transition from our current state to a new, equilibrium state in ways that attend to people (social justice, the ability to procure what we need for life, the ability to make a difference or find purpose, etc.) and the natural environment (sustainability, the depletion of nonrenewable resources)?


• Can we make such a transition a good thing and not a painful thing?


• What do we owe our descendants? For how far into the future do we bear responsibility?


• If these systems ideas have merit, what changes in mindset (in worldview) do we need to survive emotionally as well as physically? For but one example, negative growth has long meant failure for people leading businesses, but that could be the way of the future. Can we realistically change our mindsets and our systems so that satisfying needs (instead of generating growth) defines success?


• In case these systems ideas don't apply in this situation (e.g., if technology can once again save us even in the face of decreasing energy supplies and rising population), can we design robust actions that work well in either eventuality? How do you answer Tom Fiddaman's questions about the sufficiency of technology?
  


• What other questions do you have?

Let me be clear: aggregate growth of 0% does not imply that there is no dynamism, no growth in the economy. Our need for certain products and services will increase, even as our need for others will decline. I'm only thinking of aggregate growth in posing these questions.

I have lots of questions and only tentative answers. Right now, I really am interested in seeing your questions, as I've seen the power of listing questions before trying to provide answers.

Later, we'll get to considering answers and how we might test those answers for reasonableness and usefulness.

Questions?

Were Bill and Dave right?

Much of the focus in righting the economic system seems to have focused on lending: fixing the effects of bad loans to get good lending going again so that companies and the economy can once again grow.

Yet, thanks to Justin Tilson, I discovered Chris Martenson's Crash Course. It makes the claim that debt is a key factor in creating growth and the problems of growth. I found the series interesting, but I wasn't in tune with his recommended solutions. They struck me a bit too much as "run for the hills" and not enough "here are some ways we together can craft systematic solutions." I should listen again to see if I get a different impression in a second pass, but I don't have the time. That's why I usually prefer well-written and -illustrated text to video—it's faster to read and faster to review—but that's just my personal preference.

Later, reading (or reacting to) James McCusker's Federal loan guarantees mean more jobs made me wonder: did Bill and Dave get it right on a more global scale than they perhaps realized?

What does that mean? If you know that I used to work at Hewlett-Packard and you recall any of the twentieth century history of high tech in the USA, you likely know that I'm talking about Bill Hewlett and Dave Packard. In one famous case, which you can find described in multiple books, Dave returned from his stint working in the US Department of Defense to find that HP was about to raise money through significant borrowing. His reaction made it abundantly clear to a generation or two of HP managers that HP did not raise significant money that way; HP funded future growth out of current profits.

Putting McKusker's commentary, Martenson's ideas, and Dave's values together, I wonder if a focus on supplying real needs and growing through profits rather than growth for growth's sake and growth through borrowing would be better for businesses, better for the economies of the world, and better for people.

Incidentally, McCusker is in favor of more loans right now to get the economy moving again. With so many people out of work, I realize that something must be done and that interim measures may not match long-term solutions. I'm musing about long-term approaches here; how to get from here to there is a different matter.

What do you think?

PS: If you wonder what Dave's reaction to debt was, ask an HP veteran of the time, or check out Chuck House's and Ray Price's upcoming book; I'm sure it will mention it.

The Marblehead Letter

I've written about my musings on growth a number of times, even as I worried that my ideas might be controversial.

Now I've seen the Marblehead Letter, written by executives at a SoL conference in 2001, and I think those of you reading this blog might find it worthy of your time. Read both the full letter—it's only two pages long, and I think it states its questions better—and the summary, which hints at some of the signatories.

Note that the letter has questions, not answers, and note that the letter comes from people high in the ranks of major organizations.

I discovered this letter by reading Presence: An Exploration of Profound Change in People, Organizations, and Society, courtesy of InBubbleWrap and 800ceoread. For various reasons, that's been a hard book for me to get through, but I'm persevering (and those of you who have a copy can tell the page I've reached by this blog posting). Perhaps I'll blog more about it when I finish it.

What do you think? It's comforting to know that others are considering similar questions to the ones I've been raising. Question 3 is exactly what I want to work on, but reading it brings two thoughts:

• You can't address that one question in a vacuum; you have to consider their other questions and still more (for example) in the process. It is a systems issue on multiple levels.
  
• I wonder if they didn't go far enough in question 3. They want to reconceive growth. I wonder if and how and under what conditions overall sustained growth is possible and good for us. If, in aggregate, it is not (and I have yet to see evidence that the systems mantra of "there are always limits to growth" is false), I want to help find a new and successful way forward. While we have to address the long-term situation, I'm more interested in helping us figure out how to make the transition from growth to sustainability, whether on an organizational, societal, or personal level.
  

Those of you acquainted with some of the literature on growth will realize that a stable system doesn't mean there is no growth. For example, in a business sense, some technologies, products, or services outlive their usefulness, and their companies shrink or perhaps go out of business. Other technologies, products, or services are needed in increasing amounts, and their companies grow. Equilibrium in the aggregate doesn't require equilibrium in the details.

While I'm optimistic we'll figure out a way to deal with this, I still think the issue of growth is an integral part of one of the two major problems we face as a people. From what I read, we may well have exceeded the carrying capacity of the planet. If that be true, then these are important times, for the way we respond can likely have a major effect on the response of the systems in which we live, and the recovery of a system from overshoot can be harsh.

I really would welcome your comments on this.

What is progress?

It's easy to think progress is measured by GDP, trade balances, or the number of things we have; that's what we read and hear about in the news. Yet there's an undercurrent that suggests such views have it all backwards.

The Glaser Progress Foundation has a program area devoted to measuring progress. Go there to see a video or hear an audio of a 1968 speech by Robert Kennedy suggesting that GDP measures all the unimportant things or to research articles they've assembled.

Thanks to Joost Bonsen's Maximizing Progress for the link. Thanks, too, to Cliff Havener and his Meaning : The Secret of Being Alive. I read that years ago, and I'm pretty certain he makes the point that Lord Kelvin was wrong: all the important things—love, peace, faith, art, ...—share the attribute that they can't be measured by numbers. I've looked, though, and can't find the reference; if anyone can provide me the page number, I'd appreciate it.

Fooled by Randomness: some thoughts

I read and wrote about Nassim Taleb's The Black Swan some time ago; now I'm reading his Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets.

I'm struck by the application of his ideas to environmental and ecological issues. It seems as if we're placing most of our societal bets on growth, a bet that has played well for centuries. Given the current news, though, those seem like some of the investment bets Taleb describes as foolhardy. A prudent "investor" (citizen or business person) at this stage in the Earth's development might place most or all money on bets that can't lose much. Betting on the ability of the planet to absorb more growth, on nonrenewable energy sources to remain plentiful, or on technology to increase efficiencies sufficiently yet again seems like a risky bet, given the news of the day (and year and decade).

That's consistent with the precautionary principle; do check out THE YEAR IN IDEAS: A TO Z.; Precautionary Principle from The New York Times.

What do you think?

For more on Taleb's book, see words by Andrew Gelman, Wikipedia, and James Glassman.

LTG redux

Just one more short posting on LTG (Limits to Growth), at least for now: in looking for something else, I found The Limits to Growth: Abstract established by Eduard Pestel. A Report to The Club of Rome (1972), by Donella H. Meadows, Dennis l. Meadows, Jorgen Randers, William W. Behrens III, which is well worth the time it takes to read, especially if you haven't read one of the original versions of LTG. It summarizes in very readable prose the essence of the entire LTG argument in just eight short pages.

Even though this was written 36 years ago, it seems very up-to-date. Or, perhaps better put (as Ugo Bardi did), because it was written 36 years ago and we've learned more, it seems more pertinent today than it did then. For a review of the changes since the original publication, see Limits to Growth: The 30-Year Update or Matthew Simmon's review linked from my prior posting.

Grow or die

The title is a rough quotation from an interview I read by a CEO recently. It doesn't matter who it was; it's a common business notion, I sense.

I understand the sentiment, really I do. There is a real fear that, if we don't grow, we'll be overtaken by those who do grow. Or that we'll become stagnant and stale.

Yet I'm mindful that, if we all grow, we'll surely die (or at least suffer), too. Read Limits to Growth, if you're uncertain about my statement. Note that "limits to growth" in that book is not a statement of an environmentalist's hope; it's a statement of fact. We will face limits to growth. We can choose the nature of those limits (or at least we have had the chance), but stop growing we will. You can't exceed the carrying capacity of an environment forever.

So, if it's true that we all (or most all) want to grow (our companies, our houses, ...), and if it's true that we will face (and are already facing) real limits to that growth, what do we do?

I've written about growth a number of times, but I admit that I don't have all or even many of the answers yet. Perhaps I'll find out more in the next few months, for I'm co-teaching a systems thinking course at Bainbridge Graduate Institute.

If you're not familiar with BGI yet, their vision is "To infuse environmentally and socially responsible business innovation into general business practice by transforming business education," and they've got a good reputation in this area.

As I did when I taught system dynamics at the University of Washington, I suspect I'll learn a lot here, this time with a distinct focus on sustainability and business. I'm really looking forward to this experience. (And, as I did last time, I will refrain from telling you anything that goes on in class unless I have explicit permission, but I may tell you a bit about how I grew.)

More on LTG

I'll try to stop writing about LTG for a bit, but, before I do, I did find one other interesting paper that some of you might want to read. Matthew Simmons of Simmons & Company International wrote Revisiting The Limits to Growth: Could The Club of Rome Have Been Correct, After All?" back in October 2000. It appears to be a very readable, data-rich analysis of the changes in key parts of the world by someone who has been active in the energy business for decades. Check it out.

Simmons is a prolific writer; he has published a series of speeches and papers online (check the archives and the Oldies but Goodies, too). I'll have to come back and read more later.

Postscript: While I should be doing other things, I'm reading more of his articles. I encourage you to read his PEAK OIL: Is It Real? When Might It Occur? from February 25, 2008. While you need to start at the beginning to get context, check out his recommendations starting on slide 48:

Only viable solution that can work now:

• The solution: TRAVEL LESS
  
  
  
  • Less long distance commuting
    
  • Grow foods at home
    
  • Make goods locally
    
  
  

What do you think?

Cassandra's curse and LTG

Almost two years ago, I posted about Limits to Growth: The 30-Year Update. Whether you saw that posting or not, I suspect you know Limits to Growth, often referred to by its initials as LTG.

Now Ugo Bardi has written Cassandra's curse: how "The Limits to Growth" was demonized in The Oil Drum: Europe. It's his view how LTG started to stimulate true dialog about a major challenge for the planet and how it then became "everyone's laughing stock" (well, perhaps not everyone's).

That's changing. As Bargi notes,

Climate studies have also brought back the limits of resources to attention; in this case intended as the limited capability of the atmosphere to absorb the products of human activities. In this field, the LTG study can be seen as having taken the right approach from the beginning; modeling for the first time the interaction of the environment with the human industrial and agricultural system.

If you've not read LTG, I encourage you to read it now. If you'd like, you can buy Limits to Growth: The 30-Year Update online, or you can find it in your favorite library (you can change the country or specify the location more precisely).

Charles Handy on growth

I've written about growth multiple times; now Charles Handy comments on growth in Finding Drucker's vision in all that stuff.

Thanks to the TP! Wire Service for the tip.

Top postings of 2007

In the last 12 months (to be precise, from last December 28, the day after the Top postings of 2006 entry through December 26, 2007), you have chosen ten top postings on Making Sense With Facilitated Systems as ranked by unique pageviews in Google Analytics.

As I noted last year, there are potential statistical problems with this list. Those who read my blog every day using the main URL don't get counted; both last year's and this year's tallies were made from those who landed on specific URLs as reported by Google Analytics (but excluding visits I may have made). That may be okay; those who linked to specific pages may have cared more about them. Recent entries have a more difficult hurdle, as they haven't been around as long to be viewed. The dates don't quite line up with the calendar year, although I suspect that makes little difference in the results. If you know of a better way, let me know.

10. For some time now, I've been using an open source simulator for my system dynamics work because it seems to help me think more effectively. That doesn't mean I've given up on commercial tools; I still use iThink for creating interactive environments, and I will be teaching IMT 586 at the University of Washington using Vensim PLE (and I may be using it in professional applications, as well). Last April, I combined my interest in the arts with my interest in this new approach to system dynamics in a public article about marketing program for symphony orchestras. You selected TAFTO 2007, the pointer to that article, as number ten on the list.
    



9. I've written several articles about data and numbers. Making more sense with numbers part 3 offered an easy process to plot data you receive in email or reports.
   



8. The words we use can be vitally important in helping us think productively about key business, organizational, and social challenges. In A systems language for business, number eight on the list, I described one team's evolution towards a better language for discussing business issues, thanks to a course they took from me in system dynamics modeling and simulation.
   



7. Good data helps us ground our thinking in reality. Still more on data, a pointer to several online sources of data, captured the number seven spot.
   



6. Growth can create problems (witness any of the bubbles that have occurred over history), but where are good examples of successful companies that intentionally don't grow? Number four on the list is Small Giants: the American Mittelstand?, pointing to a book that answers that question.
   



5. Sometimes old technology still has utility; sometimes it still attracts interest. At number five, Technology comes full circle, a description of my continuing use of a slide rule in my work, certainly fits that description. For those who are interested, it points to a source for new slide rules.
   



4. When I first started work as an engineer, PERT charts were done using mainframe computers or hand-drawn charts. Today, project management has become a profession with a certification process, and automated tools with graphical user interfaces have long since replaced tables of numbers and dates. Your sixth-most-popular entry was Critical chains: a decade later, my revisiting of Eliyahu Goldratt's critical chain theory that linked to Tom von Alten's revisiting of his views on the approach.
   



3. Productivity is obviously important to you. Your third most popular posting of the year was a surprise to me: If you can say it, it's done, an entry about the array programming language J.
   



2. Barry Richmond has a deserved place as an educator and thinker on system dynamics and systems thinking. I posted a link to an article he wrote about systems thinking and followed up with "Scientific thinking" the modern way, a differing view on the application of modern scientific thinking in system dynamics. That was your second favorite posting from 2007.
   



1. The 2007 posting you viewed the most was the series Making musical sense by email, showcasing a conversation between music critic, composer, author, professor, and consultant Greg Sandow and me that used a system dynamics model to explore the aging of audiences for symphony orchestra concerts in the USA. Now I'm curious: was its popularity because of the topic (music), the approach (a somewhat novel approach to using system dynamics), or the fact it was a real conversation between two people? Let me know.
   

All of those postings were made in 2007. It wouldn't be fair to finish this list without noting that some postings from prior years did rank higher than some of these. Here's the all-time top ten list of postings from Making Sense With Facilitated Systems as measured by your viewings in the last twelve months:

15. TAFTO 2007 (2007)



14. Making more sense with numbers part 3 (2007)
    



13. A systems language for business (2007)
    



12. Still more on data (2007)
    



11. Small Giants: the American Mittelstand? (2007)
    



10. Technology comes full circle (2007)
    



9. System Dynamics for Cheapskates (November 2006)
   



8. Critical chains: a decade later (2007)
   



7. If you can say it, it's done (2007)
   



6. "Scientific thinking" the modern way (2007)
   



5. Making musical sense by email (2007)
   



4. System dynamics with MCSim (November 2006)
   



3. In praise of the lazy employee (April 2005)
   



2. System dynamics and program evaluation (June 2005)
   



1. Making sense with numbers (November 2006)
   

That list includes the top ten postings written in 2007 plus the five entries written in prior years that were at least as popular as the top ten 2007 postings.

As 2007 draws to a close, I want to thank you who read Making Sense With Facilitated Systems and to invite you to continue with me in 2008. If you have suggestions or feedback for this blog, contact me.

I would be honored to be of service to you or your organization in 2008. If you're trying to make sense of tough business or organizational challenges, curious how I might be able to help, or just want to talk about some of the issues you face or that I write about, get in touch.

Testing the speed limits

In the Fall 1990 Sloan Management Review, Christoph-Friedrich von Braun published "The Acceleration Trap," calling into question our focus on shorter time to market. He later published the related The Innovation War (Prentice-Hall International Series in Industrial and Systems Engineering) (a book still on my reading list).

Tom Peters blogged about it (briefly). Brice Dattée and Dr. David FitzPatrick published The Acceleration Engine: Pattern of Technological Development, a mathematical exploration of the topic from a slightly different perspective. Barry L. Bayus of the University of North Carolina at Chapel Hill wrote an interesting review of his book. Eugene Garfield wrote another review. Alexander Kandybin and Martin Kihn quoted von Braun's work in The Innovator's Prescription: Raising Your Return on Innovation Investment in strategy+business.

His words haven't been accepted universally, as anyone in a wide range of industries may attest to once they leave work at 9 or 10 in the evening. On the more literate side, Preston Smith wrote From Experience: Reaping Benefit from Speed to Market. It was the subject of a debate (Die Innovationsfalle) at the 2001 CeBIT.

If von Braun is right, there's another risk to growth besides running out of natural physical resources: there's running out of time. It's analogous to an addiction: we need to keep getting more and more of the substance in question (reducing time to market, in this case) to remain satisfied. If we can't maintain our "supply," we crash and go into withdrawal.

In this case, the risk von Braun pointed out was the limit to how short one can make product cycle times and the risks to any financial success that's built on steadily decreasing time to market. Perhaps we can eventually cycle through product generations faster than our customers will accept them (do you want to replace the computer you bought yesterday with a new generation today and then do it again tomorrow?). Perhaps we'll begin to hit physical limits to speed (zero time to market would seem to be a very hard limit to exceed). If we try to break through that limit, whatever it is, and fail, we lose the business benefits we've been sustaining based on constantly improving time to market in the past.

I'm sure many of us are tempted to say, "We don't know if there's a limit or not; we should push forward as hard as we can, and we'll let the real world tell us if there are limits." Unfortunately, if von Braun is correct, hitting those limits won't mean a leveling off; it will mean a crash, and that could have a ripple effect that none of us will enjoy.

Does this mean I'm against reducing time to market or cycle time in general? No. There are many places in our organizations where reducing delays can help, likely including the delay from a customer perceiving a real problem to being able to obtain a product or service to address that problem. Without thought and testing, though, it's hard to make generalizations.

I perceive that time to market reduction is like growth: neither serves as an eternal, prime goal, but each may have its place in at the right time and in the right situation. I do encourage you to do your own reading, think about it, and draw your own conclusions.

How do you know if it's the right time and situation for you? If you'd like to explore ways to discern whether now is such a time and this is such a situation for your organization and how you might create policies that further your goals, let's talk.

A classic: the tragedy of the commons

Every once in a while, it's useful to read or re-read some of the classics. We often hear of "the tragedy of the commons," but how many of us have read the original essay that led to that term? Check out the 1968 essay The Tragedy of the Commons by Garrett Hardin.

Manche mögen's heiß

"Some like it hot"—that's the title of a new study by Deutsche Bank Research about the effects of climate change on business out through 2030. To learn more and to find out who they think some of the business winners and losers might be (maybe you can position yourself to capitalize on some of these changes!), read the article by the same name from manager magazin. Better yet, read the full report.

For an English-language view, see the Grant Thornton International Business Report 2007 on energy and the environment.

A few comments to these essays:

• Sometimes it seems as if the people who talk about this issue are environmentalists who, some may fear, don't understand business. These two reports are part of a growing wave of business-oriented efforts to deal with climate change, peak oil, and their impacts. As Grant Thornton says, their report "highlights the incompatibility between continued rapid growth in the global economy and the sustainability of the environment...."
  
• The DB Research report is much more detailed than the Grant Thornton one, but it's also more geographically focused, looking mostly at Europe. However, if you live elsewhere, their report may prompt your thinking about the opportunities and risks in your region. The Grant Thornton report is generally at a higher level and more global. Read them both to get a fuller picture, both of what we may face in business and what thought leaders in business are thinking today.
  
• The DB Research report explicitly takes a ceteris paribus approach. A system dynamics approach might well eliminate that restriction and provide added insights. While one rarely succeeds in system dynamics when "modeling the system", it's certainly feasible to pick a problem, as they've done, and to model it as part of making sense of it and of testing solutions.
  

Incidentally, I realize that one of these reports is in German. I wish it were easy for everyone to read it, and I wish I could read good reports done in languages I don't know. While Google Language Tools, other automated tools, and multilingual friends and colleagues may help in the short term, I think it's important that we in the USA work multiple languages into the educational system at all levels. We can do it because it's a good thing to do, we can do it because it helps us communicate with those who speak or write in other languages, or we can do it because we realize that English may not always be the common language for business as it seems to have become today, and we want to treat others who have English as a second language today the same way we hope they'll treat us tomorrow if their language becomes the dominant language of trade and commerce.

Where are our policies leading us?

A policy is a set of guidelines or rules by which we make decisions. We have certain policies by which we work and live, even if we don't always make those explicit. If we see a pattern of decisions, decisions that seem cut out of the same mold, that's likely evidence of a policy.

François Cellier of the Institute of Computational Science of ETH Zürich, Switzerland has published an article, Ecological Footprint, Energy Consumption, and the Looming Collapse, at The Oil Drum that examines the potential effects of our policies towards growth. It's a high-level view, to be sure, but sometimes those offer great insights. Be sure to read both the article and the accompanying slide set (the article isn't that long; it's the 333 comments that take up most of the length).

I think this is a very important discussion. That's why I think it's important for each of us to be skeptical about such claims. It's not because I think he's wrong; his analysis, at least so far, seems good. It's not a call to wait for "proof," for, as John Sterman points out, we're not really waiting; we are doing things to the environment every day. It's not a call to ignore the claims, for that's not being skeptical; it's a call to test them and then to act based on what we determine. It's not a call for depression; Cellier does show a way forward (especially in the slides).

By suggesting we be skeptical, I may give the impression I think we can ignore this for a bit. I want to re-emphasize that the IPCC and others have given some pretty clear signals that the time to act is now (actually, the time to act was some years in the past; the next available time to act is now).

What does this mean for our businesses and for business in general? I think it means figuring out what to do to ensure the sustainability of our businesses and our economic system in the face of the challenges the best science says await us. The key lesson from "Out of Gas: A Systems Perspective on Potential Petroleum-Fuel Depletion" was that we not wait too long to attend to signals we get, for our systems have inertia, and we can't, as much as we might wish, always change direction instantaneously. Pay attention to Cellier's description of easy and difficult problems starting on slide 38; the signals may not be as we'd normally expect. Sometimes we can't wait to feel the wind from an impending storm; we have to rely on forecasts from meteorologists to know when to board up windows in the face of an approaching hurricane.

We can also apply that message to more typical business decisions. Do we discover we will need to add (or remove) capacity well in advance, so we can react smoothly, or do we make such discoveries only when the market begins to complain loudly? How do we figure out whether our latest initiative is about to make real progress or it's about to fail and we should abandon it and change course?

Reacting too soon can lead to the Chicken Little trap: if we respond too quickly, we diffuse our energies by responding to simple noise; if we respond too slowly, we're trapped. One of the lessons I've learned is that feedback models (of the sort I've sometimes discussed here, also called system dynamics models) can help us find what things to monitor so that we have a clearer picture to guide our decisions.

What do you think?

Einstein on growth and Taylor on making sense

I've written about growth and about classical music. Both came together today in Andrew Taylor's The need for narrative.

At first, I thought the Einstein quotation was a great riff on growth, and I only used the first part of the title of this piece. Then I reread Andrew's note and thought again.

Narrative (story-telling) is important in getting your message across. Art obviously plays a big role in effective narrative, from poetry to graphic arts to music (why do you think many commercials showing elegant products feature classical music?). (I read something about that last point recently, but I can't find its source. If anyone knows who blogged about it in the last few weeks, please let me know, and I'll credit the idea.) Art has a way of unleashing emotions and feelings we struggle to express in mere words.

But there's another side, too; we've all read of people who have told great stories unsupported by fact, reason, or, in some cases, ethics. Perhaps we ourselves have been mislead by such stories in the past.

That's why I think it's important to blend stories and reason grounded in data, not necessarily at the same time but certainly in the same deliberation, which may be spread out in time. I suspect we all have our own biases towards one or the other, even as those biases may shift from time to time. That's why I like the PGP approach advocated by Edward Tufte, even as I realize the risk of formulaic approaches to remove all the life from the artful (and perhaps the rational) side.

Use your art to make the rational come alive, and use your reasoning to guide your art in ethical directions and for ethical purposes!

Bo Burlingham on size

I've written about growth a number of times, and my articles on growth have scored high in the list of popular essays here. Now Bo Burlingham has written a book called Small Giants: Companies That Choose to Be Great Instead of Big. Business Week interviewed Burlingham in Resisting the Temptation to Grow. He has given examples of companies that have made explicit decisions about growth and decided that growth didn't serve their interests or that of the people they serve.

After reading the excerpts, I've put a copy on hold at my local library.

Who will be the next to write about company size?

Tom Peters on size

Tom Peters thinks that the size of companies isn't the goal. As growth is a change that leads to increased size (growth is the flow, size is the stock), his posting seems consistent with my reflections on growth.

What is the goal? Chris Nel and John O'Leary have some ideas worth considering.

Does sustainability in business mean companies have to die?

I've written about growth and sustainability from both a business and an environmental perspective. Now John O'Leary posted a note on the Tom Peters site that blew me away with a suggestion that was both obvious and unexpected: sustainability means that companies die. It's the sustainability of the economic system, not of the company, that matters.

That's obvious in your garden and in the forest. Older trees eventually die to give way to the younger trees. Last year's tomato plants are pulled and composted, and this year's crop is planted.

As sequoias may last for centuries and tomatoes last a season, different companies have different lifespans. We shouldn't uproot a healthy sequoia seedling after a season, anymore than we should try to keep that tomato plant producing into the next century.

And there are indeed challenges. When companies fold, people have to find new work, and that doesn't always happen at favorable times. When companies fold, we may lose access to products and services that provide part of the support for our businesses or our lives. We have to think well about how to deal with such transitions.

Yet a key factor in enabling births in an environment with finite capacity is deaths. A key factor in enabling growth in companies and opportunity for people may well be to allow companies to die with dignity.

Thoughts?

Going to the source: the IPCC AR4 SPM

One way I often try to make sense of things is to go to the source. Perhaps I got that habit from Professor Malcolm MacPhail, who taught me quantum mechanics as well as electricity and magnetism years ago. He would give a bit of extra credit if we'd read and summarize original journal articles, often written in German, on a topic related to what we were studying.

What I learned was that those articles could be interesting and revealing. While later summaries and expositions might shorten the tale, correct early misunderstandings, or smooth out the language, the originals often had a directness that helped. They might offer more data. They might explain things as if no one yet understood them, thus making it easier for me, who was just learning. They might help me see where later writers had veered from the original and why. It's all a matter of triangulation.

When I encounter a new idea, I still often try to find original work in the field. Even if those articles are harder or longer to read, skimming them may help me understand explanations and summaries I read elsewhere. They may help me gain a depth of understanding missing in popular summaries. They may also help me decide how much credence I will give to those explanations and summaries.

You've probably read of the IPCC AR4 SPM in the news. That's the Summary for Policymakers from the Intergovernmental Panel On Climate Change's Fourth Assessment Report (obvious, right?).

You can see the original of that document as well as others' assessments. I imagine RealClimate will continue to comment on it in future days, and I look forward to commentary from the Woods Hole Oceanographic Institution's Ocean and Climate Change Institute as well as from others. I encourage you to at least skim the 21-page original. If you want to dig even deeper, check out the publications, presentations, and graphics on the IPCC site, and then check out other credible scientific and other writing on the matter.

I tagged this note as business and growth as well as environment, because I think the ramifications of human-activity-induced climate change we have seen and will continue to see will impact us on a business level as well as a personal level.

A commuting fantasy

Yesterday, I had occasion to drive to the airport and back. That's at least a 40-mile trip each way. With local traffic, the trip can take quite a while, no matter what time of day (except, perhaps, around 3-4 in the morning).

Two nights ago, though, we had a snowstorm that wreaked havoc with the evening commute, and we were being told yesterday that we should stay home unless we had to venture out. People seemed to listen, traffic was light, and driving to the airport, even with occasional slick spots in the roadway, was a dream. It was if we had turned the clock back 20 years as far as traffic goes.

As someone who does most of his work remotely, using phone, email, Web conferencing, and the like, I had a fantasy. What if people really didn't need to drive to work each and every day? What if we could keep the roads available for the times we really need them? We wouldn't have to spend as much on roads. Companies wouldn't have to spend as much on office buildings. We wouldn't have to spend as much on fuel. We wouldn't have to spend as much on cars. We wouldn't emit as much in the way of greenhouse gases. When we did drive, we'd have a more pleasant experience. When we didn't drive, we'd have more time for family, friends, and leisure. We'd injure or kill fewer people on the roads.

Could we do it? Really?

Top postings of 2006

Here are the top ten postings on Making Sense With Facilitated Systems for 2006. Technically, this is a bit premature, for the data was captured on December 27, but I don't think things will change much.

Admittedly, there is a statistical problem with this list. Entries made last January have had more time to be viewed than entries made late in December. As I suspect most entries get their heaviest readership shortly after they're posted, I'm ignoring that potential problem and simply ranking postings by the total number of entries received from January 1, 2006 through December 27, 2006. Besides, the most popular item is also one of the most recent.

10. Last year, I had several postings on the use of systems thinking approaches, especially system dynamics, in program evaluation. System dynamics and program theory (evaluation) was number 10 on the list of most popular postings for the year.
    
    
9. Work is changing, and, for many of us, our work locations and time are becoming more flexible. Number 9 on the list of most favorite postings for 2006 was ROWE: Revolution IN work, a description of Best Buy's changed work environment.
   
   
8. People in mature organizations often wish their employees were more entrepreneurial. Number 8 on the list is Becoming more entrepreneurial, which sheds light on what Saras Sarasvathy and others call effectual reasoning. That's the style she finds most prevalent in entrepreneurs. Are you ready for that approach?
   
   
7. I am a fan and user of open source software, as I've explained multiple times. Number 7 on the list is OO.o tips, intended to help those thinking of switching to OpenOffice.org as their office suite.
   
   The next highest essay on the list, The Joy of Thinking Small, was published in November of 2005, and so it doesn't deserve a place on the top ten list for 2006. I'm mentioning it because it did earn the spot through popularity, and it might give you a pointer to some small tool you can use to make youself more productive.
   
   
6. Number 6 on the list concerned growth, another topic I've covered several times. S-curves, growth, and discerning your position was written to help us all think about whether growth was a good goal for our organizations at this point.
   
   
5. Decisions, decisions, decisions, one of several notes comparing Gary Klein's recognition-primed decision model with other approaches, was number 5 on the list. This essay also touched on Saaty's Analytic Hierarchy Process.
   
   
4. Introducing Systems Thinking into Your Organization, number 4 on the list, announced the temporarily free availability of an article by that name that I wrote for Pegasus Communications' Systems Thinker. The article is still good, and it's still available for a small fee from Pegasus Communications.
   
   
3. Number 3 on the list was Thinking systemically: Limits to Growth, my favorable review of Limits to Growth: The 30-Year Update. I found it to be both a good treatise on the subject of growth and a good, non-technical introduction to system dynamics.
   
   
2. Growth also occuppied the number 2 spot with More on growth, perhaps my most reflective essay on the subject in 2006.
   
   
1. By far, the most popular essay for 2006 was the recent Making sense with numbers. It used an example from the business of classical music to show how an esoteric-sounding concept called Bayes' Rule could help us make better sense of the statistics we may hear in meetings or read in reports. Its popularity was no doubt aided by those of you who blogged about it yourselves. Thanks!
   
   

While all of these essays describe ways of making sense of the world, I see four categories as being important to you.

First, four of those entries, numbers 1, 4, 5, and 10, are about making sense of general situations. That's the theme of this blog and the central theme of my work.

Second, the environment and organization's responses are key in numbers 2, 3, and 6. While I suspect not many companies are yet modulating their growth in response to the environment, many of you seem to be thinking about it. I was fortunate to have been able to work in the environmental arena last year, and I enjoyed it immensely.

Third, number 7 and its 2005 partner showcase ways to do things more productively. As I hope that's one of the benefits people get from my work, I'm glad it came out in my essays.

Fourth, numbers 8 and 9 speak to the ways we work in organizations. As I focus on helping people through helping the organizations in which we work, I'm glad that came through, too.

By contrast, which essay was the least popular? That turns out to have been A wake-up call with positive ideas, an essay about Clyde Prestowitz' Three Billion New Capitalists: The Great Shift of Wealth and Power to the East, one of several essays I've written about what I see as the importance of those of us in the U.S.A. connecting better with those of us who live in other parts of the world.



What's the map, you ask? That's where you live—you who voted on these essays by viewing them during the course of the year.

Thank you for reading these essays and for the comments you've made. I'll try to focus even more on issues you care about in 2007, and I'll try to throw in a few new areas, too, just to keep things interesting.

I welcome comments from even more of you in the coming year. Email me, call me, or add a comment to a blog entry. I'd especially appreciate your feedback on what you found helpful in 2006 and what you'd like to see me cover more thoroughly in 2007.