Guidelines and Examples

	Guideline 1 Use nouns when choosing a variable name. Avoid verbs and action phrases, because the action is conveyed in the loop’s arrows. For example, “Costs” is better than “Increasing Costs,” because 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.	Examples
	2 Use variables that represent quantities 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.
	3 Whenever possible, choose the more “positive” sense of a variable name. For example, the concept of “Growth” increasing or decreasing is clearer than an increase or decrease in “Contraction.”
	4 Think of the possible unintended consequences as well as the expected outcomes for every course of action included in the diagram. For example, an increase in “Production Pressure” may increase “Production Output,” but it may also increase “Stress” and decrease “Quality.”
	5 All balancing loops are goal-seeking processes. Try to make explicit the goals driving the loop. 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 the “Gap in Quality” is really driving improvement actions.
	6 Distinguishing between perceived and actual states, such as “Perceived Quality” versus “Actual Quality,” is important. Perceptions often change slower than reality does, and mistaking the perceived status for current reality can be misleading and create undesir able results.
	7 If a variable has multiple consequences, start by lumping them into one term while completing the rest of the loop. For example, “Coping Strategies” can represent many different ways we respond to stress (exercise, meditation, alcohol use, etc.).
	8 Actions almost always have different long-term and short-term consequences. Draw larger loops as they progress from short- to long-term processes. Loop B1 shows the short-term behavior of using alcohol to combat stress. Loop R2, however, draws out the long- term consequences of this behavior, showing that it actually increases stress.
	9 If a link between two terms requires a lot of explanation to be clear, redefine the variables or insert an intermediate term. Thus, the relationship between “Demand” and “Quality” may be more obvious when “Production Pressure” is inserted between them.
	10 A shortcut to determining whether a loop is balancing or reinforcing is to count the number of “o’s” in the loop. An odd number of “o’s” indicates a balancing loop (i.e., an odd number of U-turns keeps you headed in the opposite direction); an even number or no “o’s” means it is a reinforcing loop. CAUTION: After labeling the loop, you should always read through it to make sure the story agrees with your R or B label.

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