2 DefinitionA reinforcing (amplifying) process is set in motion to produce a desired result. It creates a spiral of success but also creates inadvertent secondary effects (manifested in a balancing process), which eventually slow down the success.
3 Where is it found? Organizations grow for a while then stop growing Working groups get better for a while, but stop getting betterIndividuals improve themselves for a period, then plateauCrash diet to lose weight but motivation wanes.A farmer increases yield with fertilizer, but crop is larger than local rainfall can support.
4 Management PrincipleDon’t push growth, remove the factors limiting growth.
6 Example 1A high tech company grows rapidly because of its ability to introduce new products.As new products grow, revenues grow, the R&D budget grows and the engineering and research staff grows.Technical staff becomes complex and difficult to manage.Management burden falls on senior engineers who have less time for engineering.Longer product development time slows introduction of new products.
8 Pattern of BehaviorAfter rapid, initial growth, there is a slowing of growth as the balancing loop becomes more dominant. This can lead to morale decline and a reversing of the reinforcing loop: less revenue, less R&D, fewer products, less revenue …
9 How to achieve leverage Typical response is to push harder.If you can’t break your bad habit, become more diligent in monitoring your own behavior.If your relationship is having problems, spend more time togetherIf your staff are unhappy, keep promoting junior staff to make them happy.If the flow of new products is slowing down, start more new products
10 How to achieve leverage Because these worked in the beginning, it seems reasonable they would continue to work.Unfortunately, the harder you push on the familiar levers, the more strongly the balancing process resists and the more futile your efforts become.
11 A better wayLeverage is in the balancing loop, not the reinforcing loop. Change the limiting behavior.
12 LeverageIn the relationship problem, give up on the idea of a perfect partner which is a goal that limits the continued improvement of any relationship.If the staff are unhappy, change the paradigm from promotions to acknowledging work well done, not a person’s place in the hierarchy. Distribute challenging work assignments equitably and not to the elite of the company.In the technology company – solutions include decentralizing, bringing in professionals skilled in managing creative engineers (which is not easy) and some by management development for engineers who want to manage
13 Nothing on this planet grows forever When one limit to growth is weakened, growth can continue until the next limit is felt. All growth eventually stops.