Strategic Modelling and Business Dynamics: A Feedback Systems Approach

2.5. Purpose of Causal Loop Diagrams – A Summary

As we have seen, causal loop diagrams offer a special overview of business and society, showing what is connected to what and how changes in one part of the system might propagate to others and return. People often say we live in an interconnected world but have no way, other than words, to express this complexity. Causal loop diagrams, concise and visual, reveal the interconnections, both obvious and hidden. Moreover, they can be used to elicit and capture the mental models of individuals or teams and to expand the boundary of people's thinking beyond the parochial.

There is more than just connections, however. Causal loop diagrams also capture hypotheses about dynamic behaviour. Here is the beginning of the shift of mind so vital to feedback systems thinking. The future time path of any organisation is partly and significantly pre-determined by its structure, the network of balancing and reinforcing feedback loops that drive performance through time. Causal loop diagrams embody this important philosophical view by making plain the important feedback loops believed to be responsible for observed performance.