The Loop You Can’t Get Out Of

You’ve already looked at the photograph here, so you already know that Jay Forrester must have seen some things. But the legions who’ve built on Forrester’s work would be quick to tell you that it’s not how many things Forrester has seen, but how he’s seen them, that counts. He’s seen them as the most intricate and interactive of puzzles.

Forrester is famously the originator of the field of system dynamics. It’s helpful (not entirely accurate, but helpful) to think of the approach as an extremely grown-up version of the popular computer game SimCity. Here’s Forrester’s description: “System dynamics deals with how the structure of a system and its information flows determine behavior — the control of growth, stability, decay, success and failure. The field focuses on the way internal feedback-loop relationships cause a system to change through time. Understanding why a system behaves as it does permits redesign of structure and policies to improve behavior. … The field combines theory and computer simulation with a very practical application to real-world problems.”

Forrester, now 90 and an MIT Sloan School of Management professor emeritus, joined the Sloan School when it formed in 1956. He was fresh from inventing what we now call RAM (random-access magnetic core memory), and undertook to discover what computers could help us understand about organizations. By the late 1960s he had expanded system dynamics modeling to address the problems of cities (eventually publishing Urban Dynamics) and, after that, world civilization (World Dynamics). It is impossible today not to see these as books about sustainability — maybe among the first great books anywhere about sustainability — even if Forrester wouldn’t call them that. So, as part of an interview series about the intersection of sustainability and management that will begin appearing in January on the new MIT Sloan Management Review Web site, we sought Forrester out.

We spoke in Forrester’s home, a sunny flat west of Boston where you can see framed photographs of Forrester and his wife, Susan, luminous on horseback 50 years ago in the Nebraska Sand Hills, where Forrester grew up on a ranch. (He makes much of this ranchland upbringing: “In an agricultural setting, activities must be very practical. It is full-time immersion in the real world. One works to get results.”) In his study is a three-sided phalanx of half a dozen computer monitors and related gear, with untold projects in progress. “What’s your work routine like?” we asked. The question perplexes him. “Well,” he says, “I work most days. Like you.”

In conversation, Forrester listens unusually well. Though unfailingly gracious, he’s one of those men who, even in old age, will never be referred to as “cute” — on account of remaining too bluntly formidable. The next question is always the one that interests him.

A final note: This interview was conducted in early fall, when the financial crisis was in its comparatively early days and before the worst news had begun to hit. Though Forrester addresses the effects of the downturn, it’s very likely that the conversation might have gone differently had it been held in the past couple of weeks. — Michael S. Hopkins

Sustainability Is Opportunity?

SMR: Do you think the rising attention to sustainability is presenting opportunities for company builders?

Forrester: The opportunities that grow out of what is now going on in the name of sustainability are not particularly noteworthy.

SMR: Before I ask why they’re not noteworthy — which ones are you thinking of?

Forrester: Well, there will be new businesses in wind power. There will be new businesses in trying to move away from fossil fuels. How fast those new businesses come along will depend on the course run by the present economic circumstances.

The worst circumstances — depressions like in the 1930s — are the windows of opportunity for technological change and would be an ideal time to shift from oil to other things. It takes pressures to do that, and if the old technologies have gone as far as they can, then it’s in the great economic downturns that the new things that have been talked about for a long time can begin to spring up. So it will be interesting to see whether 15 years from now we will recognize that the present economic crisis in fact was a motivator for moving forward in other areas.

SMR: Are the changes — the things that spring up — always new things?

Forrester: Not necessarily. The railroads reached their peak in the late 1920s. The railroads and all the locomotive works and all the supporting structure went downhill in the 1930s, and then when it came time to renew transportation, it was airplanes. It wasn’t railroads. Now this next time around, because of the shortage of oil, it may be rebuilding the railroads for all we know.

SMR: If those are a few of the nonnoteworthy opportunities, what are the noteworthy ones?

Forrester: I think they’re the opportunities to begin to operate at the no-growth, no-population rise, no increase-in-industrialization areas — but those are more noteworthy intellectually than in the ways I think you mean. They aren’t probably the sort of thing that represents great economic return to the stockholders, if you are meaning that kind of noteworthy.

Challenge: How to Manage a Successful Nongrowing Company

SMR:That’s an opportunity? Might not sound like one to a lot of people.

Forrester: I think it is. But either way, it may be the way that businesses will be most affected. I think one of the biggest management problems is going to be to understand how to manage a successful nongrowing company — and how to get out of the frame of mind that success is measured only by growth.

SMR: You mean because we think growth is required if a company is to stay viable?

Forrester: It’s very common to say, “If you stagnate, if you don’t grow, you will fail.” Well, that’s possible if you don’t maintain a system with proper management policies. You’ve still got to have some way to maintain vitality, to maintain some product progress, but to do it within a fixed demand on the environment. I don’t think I’ve heard of that being taught in management schools.

SMR: What keeps managers and leaders from addressing that challenge — or at least exploring its possibilities?

Forrester: The nature of our culture — the culture that has evolved for the last 100 or 150 years or more, the culture that says technology can solve all problems, the culture that says growth is good and can go on forever, the culture that says you don’t get into things like population control because it’s too treacherous a debating area. It’s a feeling that somehow we can muddle through dealing with symptoms instead of with causes.

Downturn as Roadblock

SMR: Entrenched as they are, will any of those convictions get questioned more as the economy falters? Maybe being able to manage a no-growth company viably will become pretty attractive. Do you think a higher value will be attached to long-term, nongrowing, healthy sustainability?

Forrester: I think you’re right that it’s more likely those questions will be asked now than they were 20 years ago, but I think that survival in the present downturn is very different from sustainability in the long run. Survival in the long run requires a long-run set of [management and strategic practices]. You’ve got to train people for it. You have to have an internal structure that produces rotation, [flows of people and resources into and out of the organization], without too high an overhead.

SMR: So you don’t think the new awareness of sustainability plus the changing economic pressures will offer individual companies a chance to make internal cultural changes themselves? To operate in some fresh ways without undermining their ability to appeal to shareholders or jeopardize their existence?

Forrester: It’s possible. But likely? We’d be hard pressed to separate sustainability from the present economic pressures, which are perhaps only beginning to be seen — and which in the short run, like five to eight years, may dominate any worry about sustainability. Companies will be talking about survival, not sustainability. So sustainability in a corporation probably is an idea that will take root 15 years from now when the present discussions about sustainability mature, when the present discussions strip away the idea that we’ll solve sustainability by treating symptoms. For now, the trauma of the present economic changes will probably dominate.

What Sustainability Should Be About

SMR: What do you mean, “when the present discussions about sustainability mature?” How do you think others are defining sustainability? What do you see the sustainability argument being about?

Forrester: The sustainability argument exists because there is indeed a problem of overpopulation, shortages of water, shortages of resources of all kinds in varying degrees, shortages of land, which leads to wars. … But the reaction to it is largely to deal with symptoms, not causes, to deal with how to get more power, how to refine salt water. And these are things that make the problem worse rather than better, because they create the illusion that we don’t have to deal with growing population or growing industrialization — which are the two powerful driving forces underneath it all.

In initiative after initiative on creating a sustainable Earth, on trying to understand, restore and manage the environment, I find nothing about studying how to limit population growth or how to stop industrialization growth. Everything in these initiatives will tend to increase the problem because they take [the] emphasis off the real issues.

SMR: Why do you think the underlying causes aren’t addressed?

Forrester: Political correctness, maybe.

SMR: Really?

Forrester: Not seeing the issue, maybe.

SMR: How do you define sustainability?

Forrester: Sustainability is a condition where population is not growing and industrialization and use of resources are not growing. And because we maybe have already overshot, perhaps both of those have to be reduced.

SMR: So, the idea of sustainable development, as it’s often described…

Forrester: Is an oxymoron.

SMR: When you published Urban Dynamics and then World Dynamics in 1969 and 1971, each was based on elaborate computer models simulating the interplay of forces that affected the health of cities and the world, respectively. Sustainability, it might have been called — but you didn’t call it that.

Forrester: No, we spoke of it as equilibrium — equilibrium conditions. You’re trying to find a way for human beings to come into equilibrium with their environment, not “sustainable” but equilibrium. Sustainable has no useful meaning these days. I have to go back to equilibrium, constancy.

Symptoms vs. Causes

SMR: That doesn’t sound to me out of alignment with what people mean when they discuss sustainability.

Forrester: Well, basically what people are too often doing is coping with the symptoms — thinking that somehow or other more technology will solve the problems. But technology over the last 200 years has in fact contributed to creating population growth, and so I would say that the efforts involving technological solutions divert attention from the real causes of our sustainability challenge. By coping with symptoms, trying to solve those problems one by one, we’ll make things worse in the future. This fits this same pattern we’ve seen in corporations when we understand them as systems — the things that people think they are doing to solve the problems turn out to be the causes. You see that at every turn. It was true in the urban work. It’s true in corporations. And I would say it’s true in most of the environmental activities.

SMR: Are there ways to break that pattern, do you think? What questions should we be asking in order to meaningfully advance the discussion?

Forrester: Well, I’d like to ask a sequence of questions, I suppose.

Do you really think more technology will solve the sustainability problem?

What do you think is the underlying cause?

You see, this whole sustainability issue is discussed as future action to solve it without having talked about what caused it. So the question is, What has caused the fact that we’re in a sustainability crisis? Now, I don’t know how you can answer that without saying that population is very high and that the standard of living per capita, or industrialization, is the other component.

And more and more I think each country is going to have to come to grips with its own population versus standard of living; in other words, what population can it support, at what standard of living, within its own boundaries.

SMR: Do we need new information to reach answers to those questions?

Forrester: No. There’s plenty of information available to be put together if you go deeply into the interactions that are causing the problem. The first thing to do is to understand why we have a problem, and I don’t see any discussion of that anymore. As soon as you identify why we have a problem, then you’re on the road to talking about what to
do about it.