A concept · How Systems Behave · Systems
Stocks and Flows
A level rises and falls only as fast as its flows in and out.
We cut back the spending in January and the overdraft is still there in March. The inbox gets a whole afternoon of clearing and is full again by Friday. We halve the takeaways and the scales barely move. Each time we changed the thing we could change, and the number we cared about hardly noticed. It feels like the fix did not work. Did it, and we just cannot see it yet?
What Stocks and Flows means
A stock is anything that accumulates, a balance, a backlog, a reservoir, and it changes only as fast as the flow in minus the flow out. That is the whole definition. Owning it changes what we expect to see. We stop reading a level as a verdict on the last thing we did, and start asking what is filling it and what is draining it, right now. We stop expecting a cut in the inflow to bring the level down; it only slows the rise until the outflow overtakes. Before, a debt that kept growing after we started paying felt like failure. After, we can see it was always going to grow until the payment passed the interest, and we know how long that takes.
Not to be confused with
A stock is not a flow. A stock is a level, the water in the bath. A flow is a rate, the tap and the drain. Most confusion about savings, debt, carbon and headcount comes from treating one as if it were the other.
Stocks and Flows examples: where it shows up
- At work: the backlog is not a measure of this week's effort; it is every week's arrivals minus every week's finishes.
- With money: savings grow at the gap between what comes in and what goes out, and no single good month changes that.
- In the news: carbon in the air keeps rising even as emissions fall, because falling is not the same as stopped.
Where it sits
Concept 2 of 5 in How Systems Behave, a journey in the course How the World Works.
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