Abstract
In a reinforcing loop, the output feeds back in as input. More users send more invitations, which bring more users. Interest earns interest. It runs downhill too: low morale leads people to quit, the ones who stay get more work, and morale drops again.
Because each round builds on the last, the change is exponential. It looks slow for a long time and then suddenly it doesn't. Nothing grows forever, so it's worth asking early what's driving the loop and what will eventually stop it.
Method
- 01
Name the stock
Pick the quantity that grows or shrinks, like customers, savings or technical debt.
- 02
Find what feeds it
Look for the flow that depends on the stock and adds back to it. The bigger the stock, the bigger the flow.
- 03
Decide which way it's running
Is this a loop you want to speed up, or one you want to break?
- 04
Estimate the pace
Put a rough growth rate on each round. The doubling time tells you how soon small numbers turn into big ones.
- 05
Look for the limit
Every reinforcing loop eventually runs into something, such as the size of the market or your capacity. It's better to know what that is before you hit it.
When to use it
- Something is growing or shrinking faster than anyone expected.
- You want to set things up so that each success makes the next one easier.
- A small problem keeps getting worse without anyone pushing it.
Common pitfalls
- Drawing a straight line. Because of compounding, linear forecasts are a bit off early on and badly off later.
- Forgetting the limit. Growth always runs into something, and the slowdown tends to catch people off guard.
- Pushing harder on a vicious loop. If your effort feeds the same loop, it just goes round faster.
- Calling one good quarter a loop. Check that the output really does feed back into the input.
Origin and references
Attributed to Jay W. Forrester, system dynamics (1961).
- Forrester, J. W. (1961). Industrial Dynamics. MIT Press.
- Meadows, D. H. (2008). Thinking in Systems: A Primer. Chelsea Green Publishing.
- Senge, P. M. (1990). The Fifth Discipline: The Art and Practice of the Learning Organization. Doubleday.