System Archetype 2: Limits to Growth

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Ignatius D
Manager, India

System Archetype 2: Limits to Growth

Description of Limits to Growth

One of the System Archetypes is "Limits to Growth". This archetype is a systematic representation of the "Law of Diminishing Returns"-principle. It states that if you try to grow at a high pace there will eventually be some limiting condition(s) that will limit your growth. These limiting conditions will lead to slowing the action and the system will grow at a slower pace. With each effort to grow faster, the limiting condition will add even more resistance hence stopping the growth. In some extreme conditions, this growth may even reverse itself and begin an accelerating collapse.

The growth phase is caused by reinforcing actions while the slowing is caused by the balancing act which is brought in as the growth limit is approached. This limit can be a resource constraintor a bottleneck caused in a production line, etc. The accelerating collapse (if it occurs) occurs when some reinforcing action takes place in reverse.

Early Warning Symptoms of Limits to Growth

If you feel that we are growing at a tremendous rate, and why should we worry about problems we don't have. Because sooner or later, you will have some problems and you will think that going back to what was working before will fix them. But as time passes you will realize that the harder you try to accelerate the growth, the more you will stay in the same place.

Structure of Limits to Growth



Management Principle (What to do?)

You should not push too hard on the growth (i.e. reinforcing process), rather try to find and eliminate or weaken the limiting factor which is there. There are a number of things you can do in this situation, one of which can be securing ample resources which will ensure that resource depletion is not a limiting factor.

Business Example of Limits to Growth

A new Start-up Company, at early stages, grows very rapidly until it becomes of a size where it requires professional management skills and a formal organization setup. The same level of growth is not possible with the same skillset of people, People need to learn more skills as the organization grows and new people with new skillset need to be hired for the same purpose. The skills inventory becomes a limiting factor to growth here. For more information see Greiner's Growth Phases.

Real Life Example of Limits to Growth

The population of a species (for example cattle) increases if the natural predator is eliminated. The growth rate increases until they overgraze the lands and eventually die of starvation.
Another currently very relevant example is a virus can continue to spread until a vaccine is developed, or until it infects most people and people developed the herd (group) immunity, so the virus can't affect them anymore.

⇨ Feel free to add more management situations which you might have faced and what you did to tackle them...

Sources:
Peter Senge, "The Fifth Discipline Appendix 2: Systems Archetypes", 1990.
William Braun, "The System Archetypes", February 2002
"Limits to growth", Archetypes, Systems and Us
.

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