This handout was utilized on December 14, 2011 at the Rural Housing: Reframing the Way Forward event at the Maroney Commons in Howard, SD. Materials were developed by systems mapper David Peter Stroh.

1. Improving Rural Housing in South Dakota
A Systems Approach
David Peter Stroh
Bridgeway Partners

2. Introductions
• What is working now in your experience of
developing appropriate, affordable housing?
• What do you want from today’s Summit?
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3. Goals
• Understand why good intentions are not enough to
achieve meaningful results
• Distinguish conventional from systems thinking
• Learn basic systems thinking tools
• Apply these tools to deepening our understanding
of appropriate, affordable housing in South Dakota
– Where we have come from
– Where we are now
– What we can do to increase it
• Clarify next steps
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4. Agenda
• Set the context
• Clarify where we have come from
• Learn basic systems thinking tools
• Lunch
• Agree on where we are now and why we haven’t
been as successful as we want in developing
appropriate, affordable rural housing
• Break
• Identify high leverage solutions
• Determine next steps
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5. Examples
• Homeless shelters perpetuate homelessness
• Food aid leads to increased starvation
• Drug busts increase drug‐related crime
• “Get tough” prison sentences fail to reduce fear of
violent crime
• Job training programs increase unemployment
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6. Common Characteristics of Failed Solutions
• Obvious and often succeed in the short run
• Short‐term gains undermined by long‐term impacts
• Negative consequences are unintentional
• If the problem recurs, we do not see our responsibility
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7. Good Deeds Are Not Enough
“The road to hell is paved with good intentions.”
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“When you are confronted by any complex social system …
with things about it that you’re dissatisfied with and
anxious to fix, you cannot just step in and set about fixing
with much hope of helping. This is one of the sore
discouragements of our time… If you want to fix
something you are first obliged to understand…the whole
system.” (Lewis Thomas)

8. The Need for a New Way of Thinking
 The connection between problems and their
causes is obvious and easy to trace.
 Others, either within or outside our
organization, are to blame for our
problems and must be the ones to
change.
 A policy designed to achieve short term
success will also assure long term success.
 In order to optimize the whole, we must
optimize the parts.
 Aggressively tackle many independent
initiatives simultaneously.
 The relationship between problems and their
causes is indirect and not obvious.
 We unwittingly create our own problems and
have significant control or influence in solving
them through changing our own behavior.
 Most quick fixes have unintended
consequences: they make no difference or
make matters worse in the long run.
 In order to optimize the whole, we must
improve relationships among the parts.
 Only a few key coordinated changes sustained
over time will produce large systems change.
Conventional Thinking Systems Thinking
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9. Some Definitions
• Available, affordable housing:
– Primary purpose is to attract young families
– Alternatives include single/multi‐family, new/rehab,
rent/rent‐to‐buy
• Availability of funding for developers and buyers:
– Lenders: government (multiple levels), private, nonprofit
corporation
– Forms of assistance: loans, tax credits, set‐asides, down‐
payment assistance, investments, payment scheduling
• Community infrastructure for development
– Paid development coordinator
– Nonprofit development corporation
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10. Deepening Our Understanding of Reality: The Iceberg
FOCUS ACTION OR RESPONSE
Why?
TRENDS
& PATTERNS
TRENDS
& PATTERNS
STRUCTURE
(Forces and Pressures)
EVENTSEVENTSWhat happened?
React
Firefight
Anticipate
Forecast
Change
Create
What’s
been happening?
Learning
Leverage
Pressures
Policies
Power dynamics
Perceptions
Purpose
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11. Some Key Events
• Passage of Governor’s Houses legislation
• Opening of new hospital in town
• Termination of federal funding source
• Other?
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Graphing Trends Over Time: Homelessness Example
Time
Estimated # Homeless
Efforts to Reduce
Homelessness
Visibility of the Problem
Present10 Years Ago

13. Trends for Rural Housing in South Dakota
Draw trends over past 10 years for:
• Appropriate, affordable rural housing stock
• Population of young families in rural towns
• Available jobs in rural towns
• Funding for rural housing development
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14. The world is circular not linear:
Analyzing Structure: Recognizing Feedback
From:
To:
Problems or
Crises
Actions or
Interventions
Actions or
Interventions
Problems
or Crises
Unintended and Delayed
Consequences
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15. • We live in complex webs of interconnected reinforcing
and balancing processes.
• Reinforcing process:
 virtuous cycles that generate growth
 vicious treadmills that create disaster
Reinforcing Loops
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16. Reinforcing Loops
Performance
or
Condition
Growing
Action
R
Pattern
Time
Structure
Performance
or
Performance
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17. Rural Development
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Housing
Population
Jobs
Need for Housing
R

18. Teacher’s
Expectations
Student’s
PerformanceR
To what extent have you experienced the same dynamic with people who
work for you, your colleagues or suppliers, your children?
The Self‐Fulfilling Prophecy

19. Lily Pond Story
Time (Days)
% Surface
Area
Covered
0
100
0 30
Known Facts:
1. 100% of surface area is covered in 30 days
2. Surface area covered by lily pads doubles every day
Full
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20. Questions
1. When is the pond half full?
a) 10 days
b) 15 days
c) 20 days
d) 29 days
2. How full is the pond after 15 days?
a) 50%
b) 25%
c) 2.5%
d) .0025%
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21. Lily Pond Lessons
Time (Days)
% Surface
Area
Covered
100
0 30
0
x
x
x
xxxx
x
… And Structure Is a
Better Predictor
Than Trends
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22. Balancing Process
Structure Pattern
Balancing loops seek to correct or adjust toward a goal
Performance
or Condition
Corrective
Action
B
Time
Goal
22
Performance
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23. The Risk of Taking the Pressure Off
B
Results
(e.g., Plant Accidents)
Effort
(e.g., Plant Safety Programs)
Balancing Effort and Results
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24. The Challenge of Managing Time Delays
• Delays are a significant and often hidden part of system structure.
• Delays can occur in awareness, decision‐making, implementation, and/or correction.
• The tendency is to be impatient and over‐respond or to give up prematurely.
Delay
B
Water
Temperature
Hot Water Flow
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25. Desired
Performance or
Goals
Actual
Performance
Gap
Corrective
Action
BDelay
 Increase graduation rates
 Create responsible citizens
and lifelong learners
 Get a job
 Test scores
 Absentee rates
 Teacher evaluations
What gap?
 My child is above average
 Our school is above average
We need more/less:
 3R’s in Kindergarten
 Arts, physical education, social
studies ….
We expect to
see these
changes by …
Failing to Agree on What We Want and Where We Are:
Challenges in Disseminating K-12 Innovations
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26. Condition or
Performance
BR
Constraining
Action
Virtuous
Cycle
Limiting
Process
Time
Growing
Action
Performance
Delay
Limits or
Constraint on
Performance
Limits to Growth

27. • External limits (market size, competition, natural resources).
• Limits within the organization or community (financial, human, or
technological resources available, skills of workforce).
• Limits within ourselves (our skills, mental models, attitudes,
willingness to change, capacity to learn).
Other slowing forces may involve action by others that are caused or
stimulated by our growth
Limits that May Affect Growth Situations

28. Causal Loop Diagram vs. Process Map
Sales
Revenue
Plan
Do
Check
Act
•What do the words communicate in each picture?
__________________ _________________
•What do the arrows signify in each picture?
__________________ __________________
Investment
Quality of Products
And Processes

29. Priming the Pump
Available, Affordable
Housing
Population
Jobs
Housing
Need
Housing
Development
Educ Oppty
Tax Revenue
Availability of
Funding
Community Infrastructure
For Development
Potential Return
On Development
Development
Costs*
Economic
Prospects
Homeownership
Education
Risk of Competing With
Private Developers & Realtors
Community
Resistance
Risk of
Under‐appraisal
Risk of
Over‐building
Engaged Citizens
In Vital N’hoods
R1
R2
R3
R4
R5
R6
R7
R=Pump B=Seepage
R8
R10
R9
B1
B2 Willing and Able
Buyers
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30. Managing Development Costs
Development Costs
Labor Costs
Sweat Equity Prison Labor
Land Costs
Large Parcel Size
Convenience
Willing and Able
Buyers
Material Costs
Land Trusts
Design Features
Low Infrastructure Costs
Planned Density
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31. Understanding Where We Are
• Which dynamics make sense to you – have
you experienced?
• In what essential ways is the model inaccurate
or incomplete?
• How might you modify it?
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32. The Power of Mental Models
• A critical part of system structure
• Deeply held beliefs and assumptions about
ourselves and the world
• Determine how and what we perceive
• Guide how we act, which in turn influences our
results
• Incomplete and may be outdated

33. Mental Models Example:Firefighting Breeds Arsonists
Performance
Problems
Improvements in
Systems
and Processes
Firefighting
Time to Improve
Systems and Processes
Customers’ Expectations
For Special Treatment
Use of Customized
Solutions
Ability to Develop
Common Systems
And Processes
We’ll do whatever it
takes. This is what
gets rewarded
I don’t have
time to be on
a design
committee
The company will give us
whatever we want
It’s impossible to
develop common
solutions
This will take too
much time. We have
to help the customer
now
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B
B

34. Mental Models for Rural Housing
• What underlying beliefs or assumptions
support our ability to increase appropriate,
affordable rural housing?
• What underlying beliefs or assumptions hinder
our ability to increase appropriate, affordable
rural housing?
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35. www.appliedsystemsthinking.com (c)
2008
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Identifying Leverage Points
1. Ask systemic questions, e.g.
– Why have we not been able to achieve desired
results despite our best efforts?
– If we know the solution, how come we haven’t
been able to implement it?
– How do we unwittingly contribute to the
problem?
2. Increase awareness of current dynamics

36. www.appliedsystemsthinking.com (c)
2008
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Identifying Leverage Points
3. Rewire current dynamics
4. Test and shift mental models
5. Revisit goals and metrics

37. www.appliedsystemsthinking.com (c)
2008
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Leverage Points for Limits to Growth
• If initial R loops are weak, find ways to strengthen
them, i.e. prime the pump
– Identify and reinforce weak links
– Reduce delays or reset expectations for time required
• Anticipate and invest ahead of the limits, i.e.
minimize seepage
– Develop/strengthen new engines of growth
– This might require diverting resources from current
growth engines

38. www.appliedsystemsthinking.com (c)
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Test Mental Models
• Affirm past experience which has shaped the beliefs
and feelings associated with them
• Ask, “Do our beliefs help us achieve what we want?”
• Seek disconfirming data, diverse views, and alternative
interpretations of the data
• Experiment with new behaviors consistent with the
new belief
• Monitor experiments
• Revise and retest assumptions

39. Leverage Points for Rural Housing
• What engines of growth can you strengthen
and how?
• What time delays can you shorten or be more
realistic about?
• What limits to growth can you weaken?
• What new engines of growth can you develop
to overcome the limits?
• What mental models can you test? How?
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40. For More Information
• Books
– Peter Senge, The Fifth Discipline and The Fifth Discipline Fieldbook
– Donnella Meadows, Thinking in Systems
• Articles (from Bridgeway Partners website)
– “Leveraging Change: The Power of Systems Thinking in Action”
– “Leveraging Grant‐making: Parts 1 and 2”
• Websites
– Bridgeway Partners: www.bridgewaypartners.com
– Applied Systems Thinking: www.appliedsystemsthinking.com
– Pegasus Communications: www.pegasuscom.com
• Contact David Peter Stroh
– Dstroh@bridgewaypartners.com
– 617‐487‐8766
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