Leverage Points Places to Intervene in a System

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Leverage Points Places to Intervene in a System Leverage Points Places to Intervene in a System by Donella Meadows © The Sustainability Institute, 1999. A shorter version of this paper appeared in Whole Earth, winter 1997. Published by The Sustainability Institute • 3 Linden Road • Hartland VT 05048 Phone 802-436-1277 • FAX 802-436-1281 • Email: info@sustainer.org For additional copies of this report, send US$10 to The Sustainability Institute. Leverage Points: Places to Intervene in a System by Donella H. Meadows Folks who do systems analysis have a great The classic example of that backward belief in “leverage points.” These are places intuition was my own introduction to sys- within a complex system (a corporation, an tems analysis, Forrester’s world model. economy, a living body, a city, an ecosys- Asked by the Club of Rome to show how tem) where a small shift in one thing can major global problems—poverty and hun- produce big changes in everything. ger, environmental destruction, resource This idea is not unique to systems analy- depletion, urban deterioration, unemploy- sis—it’s embedded in legend. The silver bul- ment—are related and how they might be let, the trimtab, the miracle cure, the secret solved, Forrester made a computer model passage, the magic password, the single hero and came out with a clear leverage point: or villain who turns the tide of history. The Growth.1 Not only population growth, but nearly effortless way to cut through or leap economic growth. Growth has costs as well over huge obstacles. We not only want to as benefits, but we typically don’t count the believe that there are leverage points, we costs—among which are poverty and hun- want to know where they are and how to ger, environmental destruction, and so on— get our hands on them. Leverage points are the whole list of problems we are trying to points of power. solve with growth! What is needed is much The systems analysis community has a slower growth, and in some cases no growth lot of lore about leverage points. Those of us or negative growth. who were trained by the great Jay Forrester The world’s leaders are correctly fixated at MIT have all absorbed one of his favorite on economic growth as the answer to virtu- stories. “People know intuitively where ally all problems, but they’re pushing with leverage points are,” he says. “Time after time all their might in the wrong direction. I’ve done an analysis of a company, and I’ve Another of Forrester’s classics was his figured out a leverage point—in inventory urban dynamics study, published in 1969, policy, maybe, or in the relationship between which demonstrated that subsidized low- 1 J.W. Forrester, World 2 Dynamics. Portland, sales force and productive force, or in per- income housing is a leverage point. The Oreg.: Productivity Press, sonnel policy. Then I’ve gone to the com- less of it there is, the better off the city is— 1971. pany and discovered that there’s already a lot even the low-income folks in the city. That 2 J.W. Forrester, Urban of attention to that point. Everyone is trying is because subsidized housing without Dynamics. Portland, Oreg.: Productivity Press, very hard to push it in the wrong direction!” equivalent effort at job creation for the 1969. 1 Leverage Points: Places to Intervene in a System inhabitants severely disrupts a city’s employ- the slightest idea how this complex struc- ment/housing ratio, effectively increasing ture will behave,” myself said back to me. unemployment and welfare costs and “It’s almost certainly an example of crank- despair. This model came out at a time when ing the system in the wrong direction—it’s national policy dictated massive low-income aimed at growth, growth at any price!! And housing projects. Forrester was derided. the control measures these nice, liberal folks Now those projects are being torn down in are talking about to combat it—small city after city. Forrester was right. parameter adjustments, weak negative feed- Counterintuitive. That’s Forrester’s word back loops—are way too puny!!!” to describe complex systems. Leverage points are not intuitive. Or if they are, we Suddenly, without quite knowing what intuitively use them backward, systemati- was happening, I got up, marched to the flip cally worsening whatever problems we are chart, tossed over to a clean page, and wrote: trying to solve. The systems analysts I know have come up with no quick or easy formulas for find- ing leverage points. When we study a sys- Places to Intervene in a System tem, we usually learn where leverage points (in increasing order of effectiveness) are. But a new system we’ve never encoun- 9. Constants, parameters, numbers (subsi- tered? Well, our counterintuitions aren’t that dies, taxes, standards) well developed. Give us a few months or years to do some computer modeling and 8. Regulating negative feedback loops we’ll figure it out. And we know from bitter 7. Driving positive feedback loops experience that, because of counter- intuitiveness, when we do discover the 6. Material flows and nodes of material system’s leverage points, hardly anybody will intersection believe us. 5. Information flows Very frustrating, especially for those of us who yearn not just to understand complex 4. The rules of the system (incentives, systems, but to make the world work better. punishments, constraints) So one day, I was sitting in a meeting 3. The distribution of power over the rules of about how to make the world work better— the system actually it was a meeting about how the new global trade regime, NAFTA and GATT 2. The goals of the system and the World Trade Organization, is likely 1. The mindset or paradigm out of which the to make the world work worse. The more I system—its goals, power structure, rules, listened, the more I began to simmer in- its culture—arises. side. “This is a huge new system people are inventing!” I said to myself. “They haven’t 2 Sustainability Institute, December, 1999 Everyone in the meeting blinked in sur- prise, including me. “That’s brilliant!” some- Places to Intervene in a System one breathed. “Huh?” said someone else. (in increasing order of effectiveness) I realized that I had a lot of explaining 12. Constants, parameters, numbers (such as to do. subsidies, taxes, standards) I also had a lot of thinking to do. As with most of the stuff that comes to me in 11. The sizes of buffers and other stabilizing boil-over mode, this list was not exactly stocks, relative to their flows. tightly reasoned. As I began to share it with 10. The structure of material stocks and flows others, especially with systems analysts who (such as transport networks, population had their own lists, and with activists who age structures) wanted to put the list to immediate use, questions and comments came back that 9. The lengths of delays, relative to the rate caused me to rethink, add and delete items, of system change change the order, add caveats. 8. The strength of negative feedback loops, In a minute I’ll go through the list that relative to the impacts they are trying to I ended up with, explain the jargon, and correct against give examples and exceptions. The reason for this introduction is to place the list in a 7. The gain around driving positive feedback context of humility and to leave room for loops evolution. What bubbled up in me that day 6. The structure of information flows (who was distilled from decades of rigorous analy- does and does not have access to what sis of many different kinds of systems done kinds of information) by many smart people. But complex systems are, well, complex. It’s dangerous to gener- 5. The rules of the system (such as incen- alize about them. tives, punishments, constraints) So, what you are about to read is a work 4. The power to add, change, evolve, or self- in progress. It’s not a simple, sure-fire recipe organize system structure for finding leverage points. Rather, it’s an invitation to think more broadly about the 3. The goals of the system many ways there might be to get systems to 2. The mindset or paradigm out of which the change. system—its goals, structure,rules, delays, Here, in the light of a cooler dawn, is a parameters—arises revised list: 1. The power to transcend paradigms 3 Leverage Points: Places to Intervene in a System To explain parameters, stocks, delays, understand a bathtub with some water in it flows, feedback, and so forth, I need to start (the stock, the state of the system) and an with a basic diagram. inflowing faucet and outflowing drain. If the inflow rate is higher than the outflow rate, the water gradually rises. If the out- state of inflows the system outflows flow rate is higher than the inflow, the wa- ter gradually goes down. The sluggish perceived response of the water level to what could be state sudden twists in the input and output valves is typical; it takes time for flows to accumu- discrepancy late in stocks, just as it takes time for water goal to fill up or drain out of the tub. Policy changes take time to accumulate their The “state of the system” is whatever effects. standing stock is of importance: amount of The rest of the diagram shows the in- water behind the dam, amount of harvest– formation that causes the flows to change, able wood in the forest, number of people which then cause the stock to change.
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