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Wisdom is the quality of knowledge, experience, and good judgement, and it is more important than ever when considering complex systems. From running multi-trillion-dollar businesses to becoming a gold-medal-winning Olympic athlete, the most successful people in the world don't rely on motivation—they rely on systems.
I previously explained how to become a systems thinker here and how to avoid systems traps here, but if you want to make meaningful changes in your life, master these 10 systems wisdoms:
Get the Beat of the System
Data visualisation must precede any system analysis.
Plotted data helps differentiate between actual patterns and assumptions about system behaviour. You see the forest from the trees. Common claims, such as “lower taxes equal more growth,” can be verified. A system's history reveals its essential components: elements, flows, stocks, and feedback loops.
Historical analysis provides the key to system comprehension.
Expose Your Mental Models
Testing your mental models is crucial for validating your interpretation accuracy.
Mental models help simplify our interpretation of the world around us. They act as thinking tools to help us predict, define, or solve problems. These frameworks operate via positive feedback loops, producing specific outcomes and behaviours. The incorrect application or use of a mental model is the user's fault, not the mental model's.
If you want to use the mental model of inversion to solve a problem but fail to invert, it is not that inverting is bad at solving problems. It’s that you’re bad at inverting problems.
Expose and verify how mental models interact in the real world.
Distribute Information
Information holds systems together, but if there are delays, restrictions, or deliberate falsification of information, this can lead to systems exhibiting undesirable behaviours. Effective decision-making demands complete information for informed and timely decision-making processes. Therefore, one must actively seek out potential information delays, especially when parties are incentivised to withhold it.
Where information flows freely, systems flourish; where it stagnates, they fail.
Make System Concepts Part of Your Language
“We don’t talk about what we see; we see only what we can talk about”
- Fred Kofman
Language helps us understand and define our reality.
When I was in the Royal Marines, the Commando values of courage, determination, unselfishness and cheerfulness in the face of adversity became defining characteristics through their constant reinforcement. I became them. Almost 10 years after leaving the Marines, those words still reverberate around my head.
The evolution of words such as patriot and non-binary have undergone radical semantic shifts. Patriot, once a defender of nation, values and traditions has been hijacked by the far-right and non-binary, once related to mathematics, doesn’t even show up on Google search as anything to do with mathematics anymore.
Language shapes our boundaries of what things mean, and they are ever-changing and reforming. Integrating systems language into our daily language will help us talk about what we see.
Pay Attention to What is Important, Not Just Quantifiable
As a society, we value quantity over quality. You can make your mind up as to whether you think that’s good or not.
But, if quantity is what we seek as a society, are rewarded for, rate and compare ourselves against, then quantity is what our systems will produce. Systems will maximise numerical output. Remember, the language we use to define the goal of a system will shape its behaviour. Even in scenarios where mass production serves humanity- like a global vaccination programme- quality remains inextricably linked to quantity. Yet this relationship flows one way: while quantity often requires quality’s blessing, quality does not.
If a system is designed to weigh quality heavier than quantity, then quality is what it will produce.
Locate the Responsibility in the System
“ A great deal of responsibility was lost when rulers who declared war were no longer expected to lead troops into battle”
- Donella H. Meadows
Modern society suffers from a critical disconnect between decisions and consequences.
Our world increasingly allows consequential decision-makers to avoid accountability, from high-level politicians to everyday workers. This fundamental principal-agent problem, when combined with the tragedy of the commons, creates what Charlie Munger termed lollapalooza effects. That is, exceptional events and consequences. When 2, 3 or 4 forces are moving in the same direction and they collide, the results aren’t linear, they’re exponential.
Look at the 2008 financial crash. Cheap and predatory lending driven by greed, envy and FOMO behaviour inflated the American housing market until the bubble burst, bringing (almost) everyone down with it. Thankfully, the perpetrators were swiftly brought to justice, and we all learnt our lesson.
Of course, that’s a lie.
One, I suppose you could say, unfortunate man, was arrested. That’s it. The film The Big Short with Christian Bale and Ryan Gosling is a great film for anybody wanting to get an idea of the impact these mega effects can have.
A lack of accountability breeds a drift to low performance and eroding values.
Stay Humble–Stay a Learner
Rigidity is a learning straightjacket.
Learning requires openness to being wrong and accepting failure. This mindset grants freedom to experiment and learn through trial and error, with each mistake offering valuable lessons, provided each misstep serves as a stepping stone rather than a stumbling block. Systems can be highly complex to see, let alone understand or influence, but approximate progress in the right direction trumps precise movement in the wrong one.
Expand Time Horizons
Systems remain indifferent to operational speed–they encompass multiple interconnected time scales.
Behaviours and outcomes can happen instantly or can take years to manifest the consequences of yesteryear's actions. This coupling and uncoupling of fast and slow, strong and weak, is constantly playing out like the ebb and flow of a tide.
Present actions cast long shadows through time, and second and third-order consequences should always be considered when designing systems or seeking to alter their behaviour.
Defy the Disciplines
Rarely will the behaviour of a system perfectly align with an academic discipline.
Be a truth seeker, not a staunch advocate. Systems, problems, and solutions often blur the lines between academic disciplines and rely on what Charlie Munger would call worldly wisdom. You should collect and store mental models and frameworks from which to shine a light on systems and follow your nose wherever it leads you.
After all, curiosity is a prerequisite for learning.
Don’t Erode the Goal of Goodness
If the standards we value today become yesterday’s memories and are replaced by broken and corrupt values, we fall into the classic system’s trap of the drift to low performance. Combined with the tragedy of the commons, we are left with zero-sum games everywhere as each person looks out for their own and only their best interests.
To combat this demise, the goal of the systems we create has to be incorruptible and unyielding, especially when we live in a world where bad behaviour is held up, magnified and exacerbated by social media.
Remember, there is plenty of goodness going around, but unfortunately, that doesn’t often lead to shareable content.
Final Thoughts
Learning any new skill is difficult, and that is especially true when learning about systems. It could take years to understand complex interwoven systems, but the work will be worth it, for you will begin to see things you have never seen before. You will have a new set of eyes from which to view and, hopefully, change the world.
Until next time, Karl (The School of Knowledge).
Whenever you’re ready
The School of Knowledge helps you understand the world through practitioners. Those who try, fail and do (skin in the game). 📚💡
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Systems shape outcomes, but wisdom shapes systems. Master the patterns, challenge assumptions, and always keep learning
Interesting insights! The first tip is one of the most important in my opinion. Understanding the beat of a system through data analysis allows you to make data-driven decisions. Without analyzing the system it is not very useful.