Stocks and Flows Reasoning

People systematically misjudge accumulations. They confuse a stock (a quantity that builds up: cash, debt, a customer base, a backlog, technical debt) with the flows that change it, and infer the stock's direction from a flow's direction. The classic error: "the inflow is falling, so the stock is falling." It is not - the stock keeps rising while inflow exceeds outflow. This skill makes the structure explicit: name the stock, name its inflows and outflows separately, and reason about its trajectory from the net flow. The output is a stock-flow map. It corrects a specific, well-evidenced accumulation error; it does not claim to teach systems thinking wholesale.

When to Use

• A quantity accumulates over time (runway, debt, backlog, headcount, customer base, reserves, technical debt) and the question is whether it is rising or falling.
• A trend in a flow is being used to infer the stock ("churn dropped, so the base is growing").
• Before acting on an "it's getting better/worse" intuition about an accumulation.

When NOT to Use

• The quantity does not accumulate (a one-off event, a ratio with no stock).
• A simple direct relationship with no accumulation is all that is at play.
• Mapping forward consequences (use futures-wheel) or systemic causes (use iceberg-model); this is specifically about accumulation dynamics.

Instructions

When asked to reason about an accumulating quantity, follow these steps: