Causal Loop Diagrams

Causal loop diagrams are used as a tool to aid in Systems Thinking. They are used to represent the structure of a system by showing the relationships between its key parts. This helps in understanding the underlying structures that drive behavior and provides a visual representation with which to communicate that understanding. The diagram generally consists of one or more closed loops that represent cause and effect relationships between variables. This document is designed to give you a high level overview of how to construct a causal loop. In a causal loop diagram, a link is an arrow between two variables that represents a relationship. There are two types of links, same and opposite. Same links are indicated by an s, and represent that a change in the first variable results in a change in the same direction in the second variable. Opposite links are indicated by an o, and represent that a change in the first variable results in a change in the opposite direction in the second variable.

Guidelines for Drawing Causal Loop Diagrams

Guideline Selecting Variable Names When choosing a variable name, use nouns. Avoid verbs and action phrases since the action is conveyed in the arrows. For example, Costs is better than Increasing Costs, since a decrease in Increasing Costs is confusing. The sign of the arrow (s for same or o for opposite) indicates whether Costs increase or decrease relative to the other variable. Variables should be something that can be measuredquantities that can vary over time. It does not make sense to say that State of Mind increases or decreases. A term like Happiness, on the other hand, can vary. Choosing the positive sense of a variable name is preferable. An increase or decrease in Growth is clearer than an increase or decrease in Contraction. Loop Construction For every course of action included in the diagram, think of the possible unintended consequences as well as the expected outcomes. An increase in Production Pressure may increase Production Output, for example, but it may also increase Stress and decrease Quality. Example

1.

Litigation Costs Increasing Costs

2.

Rewards Happiness State of Mind Demand

3.

Growth Contraction

4.

Production Pressure

S---------Production Ouput S---------Stress O--------Quality

5.

All balancing loops are goal-seeking processes. Try to make goals driving the loop explicit. For example, Loop B1 may raise questions as to why increasing Quality would lead to a decrease in Actions to Improve Quality. By explicitly identifying Desired Quality as the goal in Loop B2, we see that at the Gap in Quality is really driving improvement actions.
Actions to Improve Quality

Quality S

B1

Quality S O B2 Gap in Quality Actions to Improve Quality

Desired Quality S

6.

Distiguishing between perceived and actual states, such as Perceived Quality vs. Actual Quality, is important. Perceptions often lag reality, and mistaking the perceived status for current reality can be misleading and create undesirable results.

Actual Quality S

Del

ay

Perceived Quality R1 S

O B2 Gap in Quality Actions to Improve Quality S

Desired Quality

7.

If there are multiple consequences of a variable, start by lumping them into one term while finishing the rest of the loop. For example, Coping Strategies can represent many different ways we respond to stress (exercise, meditation, alcohol use, etc). There are almost always differing long-term and short-term consequences of actions. Draw loops with increasing radius as they progress from short-term behavior of using alcohol to combat stress. Loop R1, however, draws out the longterm consequences which will actually increase stress.

STRESS O

S Coping Strategies B2 B

8.

STRESS O O

B1 B2

S Alcohol Use

Productivity S

R1

Health

General Tips If a link between two terms is not clear to others and requires a lot of explaining, the variables probably need to be redefined or an intermediate term needs to be inserted. Higher Demand leading to lower Quality may be less obvious than when Production Pressure is inserted in between. 10. A short-cut to determining whether a loop is balancing (B) or reinforcing ( R ) is to count the number of os in the loop. An odd number of os indicates a balancing loop, an even number (or none) means it is a reinforcing loop. CAUTION: After labeling the loop, you should always talk yourself around the loop and make sure the story agrees with your R or B label. 9.

O Demand-------------------------------------------Quality S O Demand---------Production Pressure--------Quality

Bank Failures O Solvency R

Depositors Confidence

Withdrawals from Bank

4 os = R