Steve Schmitz

Steve Schmitz

Steve is a consultant, trainer, writer, and coach. He has broad experience from garage startups to Fortune 500 companies, private business to government agencies, and agriculture to Silicon Valley.

Since discovering Scrum in the early 2000s, he has helped many organizations find ways to increase the flow of value to their customers. He is passionate about helping people and organizations find innovative ways to improve their service delivery from the customer’s perspective.

He holds the Certified Scrum Professional (CSP-SM) and Kanban Coaching Professional (KCP) credentials.


Dealing with systems is challenging. Influencing systems in such a way as to achieve desired outcomes in the system is even more challenging. By recognizing a system when we encounter one, understanding the 3 characteristics of a system, and deciphering the 5 building blocks of a system, we can begin to understand the complexity of the system. Then, and only then, can we begin to discover clues on how to apply leverage to help the system change itself to produce more beneficial outcomes.

Avoiding The Cobra Effect With Systems Thinking

By Steve Schmitz

Snakes. Why Did It Have To Be Snakes?

“Systems thinking” is a term often used to encourage people to “think of the big picture”, but it means so much more than this. Beyond the appeal to be aware of the bigger context, systems thinking is a discipline with a specific set of practices and skills.

Before we get to the snakes, it would be instructive to define “a system”. A system is a grouping of certain elements and their interconnections that achieves a purpose.

  • Elements – The various forces or parts that comprise the system.
  • Interconnections – The relationships or stories that hold all of the elements together. In systems thinking, the interconnections are more important than the individual elements.
  • Purpose – The outcomes that the system generates. This is the trickiest to grapple with because the system may produce an overall purpose that is at odds with the purpose of the individual elements.

A marketing department is a system. A river full of flora and fauna is a system. A bowl of Skittles candy is not a system.

Perhaps the best way to understand what a system is would be to look at one and observe its behavior.


The Cobra Effect

In the late 1800s, the British Empire ruled over colonial India. During this time, the British government leaders became aware of a growing problem in Delhi: Snakes, and not just any snakes, but deadly, poisonous cobra snakes. The population of cobras was growing rapidly and quickly becoming a health hazard for the inhabitants of Delhi.

The solution to the problem seemed clear and obvious: Eradicate the snakes.

The British-led local government set to accomplish this by declaring a bounty on every cobra skin that anyone brought to the government officials. They set up “cobra collection centers” with officials to disburse money in exchange for the cobra skins.

Within a short period of time, the “Cash for Cobra Skins” program appeared to be working. There were fewer reports of deaths due to cobra bites, and there were fewer sightings of cobras in the city.

However, after a while, the situation began to change. The cobra problem resurfaced and began to gradually increase to the point where it was worse than before – much worse. No matter how many dead cobras were collected, both cobra sightings and deaths from cobra bites steadily increased throughout the city. The British were baffled by this turn of events.

Eventually, the British government realized what was happening. They had underestimated the entrepreneurial spirit and creativity of the Indian population. It turned out that shortly after the cobra bounty was announced, the Indians began raising cobras in cobra farms. They had discovered that the amount of money they could make from turning in cobra skins was higher than the cost of breeding and raising cobras to adulthood. Inadvertently, the government had created a brand new cash cow market for cobra skins, and the local Indians who were raising cobras and selling the skins to the British officials were becoming rich.

When the British officials realized what was happening, they immediately cancelled their cobra bounty program to discourage the farming of cobras. Logically, they figured that removing the incentive for raising cobras would reduce the cobra population.

What happened, in fact, was the opposite.

The myriad of cobra entrepreneurs realized that all of their prized cobras in their cobra farms were now worthless. So to minimize their losses, they released all of their cobras into the wild, which caused a new explosion in the cobra population in the city, orders of magnitude worse than the original problem.

Despite the best intentions and efforts of the British government to solve the problem in the city, the outcome was the exact opposite of their intention. Their shortcoming was that they didn’t realize they were dealing with a system, so they used a non-systemic strategy to deal with a systemic issue.

The 3 Characteristics of a System

There are generally three high-level characteristics of a system:

  1. Systems are non-linear. They don’t have a starting point and an end point like in a process. Causes and effects don’t necessarily flow in a one-directional linear fashion.
  2. Systems also generate feedback loops. Various elements in the system communicate in multiple ways, meaning that one change in one part of the system can create ripple effects in multiple parts of the system.
  3. Systems also have emergence. Even minor changes affecting the system can create increasingly complex behaviors that are much more sophisticated than any one element alone could create.

You Know You May Be Dealing with a System If…

There are a few clues you can look for that indicate you may be dealing with a system.

  • If you have trouble defining the exact problem, or if the problem seems to shift from day to day or week to week, you might be dealing with a system.
  • If your solution fixes your problem one time, but it doesn’t solve what appears to be the same problem the next time, you might be dealing with a system.
  • If you make a hypothesis that A will lead to B, and instead, A leads to Cleveland, you might be dealing with a system.
  • If you’re trying to map out the situation in a diagram and you seem to have loops instead of a start and end, you might be dealing with a system.
  • If you keep hearing people say, “If ‘they’ would just do this… it would solve everything” but the problem never gets solved, you might be dealing with a system.

Looking at the Cobra Effect as a System

Caveat: Even though I am not an economist, here is a systems map that could be a very simple representation of the economic system that the British officials were unaware of.

In this system, there is no simple cause-and-effect. There are multiple loops. A change in one element in one loop can reverberate throughout the system and cause unintended consequences in other parts of the system.

The diagram below is the same systems map with the addition of the change that the British officials implemented into the system.

By introducing the bounty for cobra skins, the British officials actually increased the employment level of the economy. This in turn increased the earning capacity of the Indians, which reduced the level of poverty. In turn, this reduction in poverty created ripple effects through the system that were entirely unexpected. One of these unintended ripple effects was a growth in the cobra population, and consequently, an increase of deaths due to cobra bites.

Building Blocks of System

To get a grasp of what is really going on in a complex system, it may help to begin by considering the 5 bulding blocks of any system.

  1. What are all of the elements within the system? These are the tangible parts of the system that can be physically seen. The elements could be people, machines, offices, materials, manuals, computers, tools, etc.
  2. What are the beliefs held by the people in the system (assuming that people are a part of the system in question)? Beliefs are more abstract so they might be hidden beneath the surface. Beliefs could be related to values, attitudes toward people or policies, loyalty, resistance, tension, cooperation, etc.
  3. What are the relationships between the various elements of the system? Metcalfe’s Law tells us that the relationships between the elements of a system increase far more than the number of elements in the system. Consider how each element relates to all of the other elements in the system.
  4. What are the loops in the system? Elements in the system create a life of their own as they interact, forming continuous loops. These loops can be vicious, virtuous, stabilizing, or stagnating. How do elements in one loop feed into another loop? How does one loop as a whole relate to the other loops?
  5. What is the purpose of the system? It’s important to remember that systems are never broken. Systems behave exactly in the way that they were designed to operate. The tricky part is that sometimes, their behavior is very different than the expectations we have for the system. By understanding how the vicious, virtuous, stabilizing, or stagnating loops in the system interact, one can begin to decipher the true purpose of the system and why it behaves as it does.

Wrapping It Up

Dealing with systems is challenging. Influencing systems in such a way as to achieve desired outcomes in the system is even more challenging. By recognizing a system when we encounter one, understanding the 3 characteristics of a system, and deciphering the 5 building blocks of a system, we can begin to understand the complexity of the system. Then, and only then, can we begin to discover clues on how to apply leverage to help the system change itself to produce more beneficial outcomes.


© 2020 by Steve Schmitz

All Rights Reserved

This article was originally published at




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