The Fifth Discipline

Senge states that Systems Thinking examines the interrelationships of things and acknowledges the whole of the system. He further argues that Systems Thinking is growing more important with the complex nature of the modern world with its rapid changes and serious problems including climate change, the drug trade, and various other complex issues. Senge then explains that the book originally discussed the arms race between the US and USSR during the Cold War and its escalating patterns of aggression, but he has decided to focus on the War on Terrorism for the new edition. He asserts that both the US and the terrorists engage in linear thinking without recognizing the cyclical nature of their aggression toward each other and how their actions lead to the other’s increased aggression. Senge explains that this situation is one of dynamic complexity, but the US’s system is programmed to focus only on detailed complexity. This unfamiliarity with dynamic complexity plagues companies as well. Senge says a way to better understand dynamic complexity is to change the system’s outlook from linear to circular.

He explains that circles shape the world rather than a line, as non-Western cultures and languages show. He uses examples and diagrams showing the simple act of filling a glass of water as cyclical, with each action and outcome supporting each other in a loop. He calls this a feedback loop, and he discusses the three systems archetypes within Systems Thinking: reinforcing feedback, balancing feedback, and delays. Reinforcing feedback shows how small changes can lead to major outcomes, creating a pattern of behavior and events that support each other, either positively or negatively. Senge uses the example of teachers’ impressions of students impacting their grades for better or worse, as well as Volkswagen’s sales leading to satisfied customers, conversation, and more sales, repeating the cycle. Balancing feedback shows how systems maintain stability, as shown with the biological concept of homeostasis, and resist change due to ingrained systemic codes, making change difficult to maintain without changing these internal codes in the system. Senge then describes how delays often lead to panic and poor decisions if one does not try to work with a delay, recalling the beer game and the differing automobile industries of the US and Japan.

Senge recalls seeing a man fall into a river while rowing his raft near the dam. The man died as he struggled in the current. He says that if the man dove down to the other current, he would have survived. This, he explains, is an example of how systems archetypes, like themes and motifs in a story, shape the behaviors and events in the world. He says that the book will cover multiple systems archetypes, but two significant ones are Limit to Growth and Shifting the Burden.

The first systems archetype, Limit to Growth, involves reinforcing feedback in which a system experiences great improvements that start to slow down due to circumstances. Senge uses dieting, changing one’s behavior, and company growth and innovations as examples in which these situations show promise but then reach a point of stagnation. He explains that if this is not addressed, it can reverse into a negative, reinforcing feedback. However, if one addresses the systemic limits and adjusts their goals accordingly, one can remove or reduce these limits. Senge then invites the reader to create their own story on this systems archetype and create a diagram of their own. The second systems archetype, Shifting the Burden, is a balancing feedback systems archetype that focuses on treating symptoms of a problem rather than the systemic problem. Examples include a person who uses alcohol to relieve stress rather than combat what is truly causing their stress, a country that uses inflation to treat a deeper problem, and a company that becomes overdependent on human resources experts. Senge explains that the only way to treat this systems archetype is by treating the underlying problem before the symptomatic approach can do more harm and it becomes too late to treat the root cause. He invites the reader to create a story about this archetype as well and shows the reader how to create the diagram. Senge then concludes by saying he will explore the impact of these system archetypes for one company in the next chapter.

Senge states that he put systems archetypes such as Limit to Growth and Shifting the Burden in the book to show readers the structural problems that systems must examine and leverage. He details the rise and fall of the 1980s electronics company WonderTech, which had high sales rates in its early years before experiencing a decrease. The vice president of marketing and sales encouraged them to sell the product harder, which worked well for a while, but then led to another sharp decline and a significant decrease in product quality, steadily leading to the company’s eventual failure. Senge explains that Limits to Growth played a significant role in the company’s demise. Though reinforcement such as product investments, strong advertising, and spreading positive information served the company well, the long delivery times hurt the company, as did the management team’s forceful pushing of their original reinforcement process. Furthermore, WonderTech’s management team made the mistake of connecting cause and effect to the same area. He then explains that WonderTech also shifted the burden by hesitating rather than increasing its capacity to shorten delivery times. By the time delivery times shortened, it was too late. Senge argues that WonderTech could have survived if they had stuck with their eight-week delivery time and made the expansion. He hypothesizes that their sales rates and revenues could have increased exponentially over the following 10 years if they committed to this, and the customers would have respected the company for being true to their word. Senge shows a diagram with the two systems archetypes in WonderTech’s failure together.

Comparing WonderTech’s failure with that of People Express Airlines, Senge adds another systems archetype involved in their failures: “growth and underinvestment”—when companies fail or refuse to develop higher capacity in response to growth (122-23). He also uses the US manufacturing industries as an example of this, with their lack of investment contributing to the outsourcing of most US manufacturing. This takes time to detect because of the gradual associate decline. These companies cannot see the dynamic complexity and structural patterns. Senge explains that instead of putting all of one’s focus into the details, one must use the details to create a complex story that approaches the fundamental causes of the problems and solves them. He also says Systems Thinking requires a clear understanding of the other four disciplines.