All tools are summarized in Tools for a Consultant’s Work - Summary.
Stock and Flow Diagram
Stock and flow diagrams are a fascinating tool for visualizing interconnected mechanisms and areas. They allow us to draw broad conclusions about how our IT systems, teams, organizations, or entire ecosystems work. These diagrams help us perceive the complex reality.
Unfortunately, we often think linearly - if there is an action, there will be a reaction. We tend to believe that simple actions will yield results, without recognizing the “set of interconnected vessels” influencing the final outcomes. In such situations, our attempt to solve a problem may complicate it even more.
A stock and flow diagram consists of:
Stock: The accumulated value (physical, such as money, or intangible, such as knowledge) at a given moment. It is changed by flows.
Flow: The change in value in a stock over a specific period.
Flow Rate: The regulation of the force with which a flow operates. Flow rates can be influenced by stocks and other external factors.
Cloud: The source or end of a flow.
Link: The influence of individual diagram components on each other, either reinforcing or weakening them. Sometimes additional descriptions indicate the type of influence.
Population Diagram Example
The simplified population diagram below shows:
- Two Stocks: Children and Adults.
- Births: Influenced by the number of adults, creating a reinforcing feedback loop (the more adults, the more children).
- Additional Factors: Birth rate and mortality at birth.
- Maturation: Not all children become adults—some die during maturation.
This diagram explains several interesting facts:
- In ancient times, high birth rates were offset by high infant and child mortality, leading to slow population growth.
- Medical advances reduced mortality, causing an “exponential” population growth through the feedback loop.
- In recent years, declining birth rates (in Western countries) have slowed population growth despite a large number of adults.
The diagram is adapted to the specific case -adult mortality is omitted as it was unnecessary for this explanation. The more we want to show, the more components we add. However, we must maintain readability, so we display only key aspects needed for our discussions.
More about stock and flow diagrams can be found in Donatella Meadows' excellent book Thinking in Systems.
Example of Use
The best-known practical example of using diagrams was shown by Sebastian Gębski in his presentation Kaizen Driven Development. He demonstrated how to analyze the recruitment of Elixir developers in Warsaw. His team identified current bottlenecks and made better decisions to improve the recruitment process.
I used stock and flow diagrams to explain to a manager why several people suddenly left various teams. These employees, theoretically well-paid and highly respected in the company, did not stay. The explanation was based on Pink’s principles of motivation:
- Increasing “death march” projects caused people to spend more time on them than on normal projects.
- Initially, external motivation built up:
- Money: The team was rewarded for working on difficult projects and took overtime to deliver on time.
- Respect: Team members were widely praised as experts in challenging tasks.
- Over time, internal motivation deteriorated:
- Mastery: Constant firefighting left no time for learning and improvement.
- Autonomy: Everything was subordinate to delivering “death marches,” with no freedom of work.
- Internal motivation lagged behind external motivation
- Initially, both motivation stocks were similar.
- With the first difficult projects, external motivation grew quickly (bonuses encouraged work), while internal motivation declined slowly (considered a temporary situation).
- Over time, it became harder to increase external motivation (bonuses ceased to work), and internal motivation continued to drop (no sign of change).
- Ultimately, internal motivation was so low that external motivation could not counteract it, leading to mass resignations.
By visualizing the motivation system, it was possible to directly see the interacting forces that delayed but ultimately negatively impacted the entire company.
Why is it Beneficial?
Stock and flow diagrams allow visualizing complex concepts, showcasing feedback loops, balancing and reinforcing dynamics, delays, corrections, and more. They help describe how we work, identify bottlenecks, highlight problems, and suggest possible solutions.
These diagrams help avoid shallow thinking like action -> reaction. They provide a complete picture, showing more connections. The system we work in becomes visible, enabling discussions and decision-making.
