Models - Conversely, our models fall far short of representing the world fully. That is why we make mistakes and why we are regularly surprised. In our heads, we can keep track of only a few variables at one time. We often draw illogical conclusions from accurate assump-tions, or logical conclusions from inaccurate assumptions. Most of us, for instance, are surprised by the amount of growth an exponential process can generate. Few of us can intuit how to damp oscillations in a complex system.

Changing the length of a delay may utterly change behavior. If a decision point in a system (or a person working in that part of the system) is responding to delayed information, or responding with a delay, the decisions will be off target. Actions will be too much or too little to achieve the decision maker's goals. On the other hand, if action is taken too fast, it may nervously amplify short-term variation and create unnecessary instability. Delays determine how fast systems can react, how accurately they hit their targets, and how timely is the information passed around a system. Overshoots, oscillations, and collapses are always caused by delays.

For any physical entity in a finite environment, perpetual growth is impossible. Ultimately, the choice is not to grow forever but to decide what limits to live within. If a company produces a perfect product or service at an affordable price, it will be swamped with orders until it grows to the point at which some limit decreases the perfection of the product or raises its price. If a city meets the needs of all its inhabitants better than any other city, people will flock there until some limit brings down the city's ability to satisfy peoples' needs.

Any physical entity with multiple inputs and outputs—a population, a production process, an economy—is surrounded by layers of limits. As the system develops, it interacts with and affects its own limits. The growing entity and its limited environment together form a coevolving dynamic system.

It's a great art to remember that boundaries are of our own making, and that they can and should be reconsidered for each new discussion, problem, or purpose. It's a challenge to stay creative enough to drop the boundaries that worked for the last problem and to find the most appropriate set of boundaries for the next question. It's also a necessity, if problems are to be solved well.