Since the 1970s, software-producing organizations have invested in dozens of technological innovations such as fourth-generation languages, CASE products, object-oriented analysis and programming, and software reuse. Yet productivity tools simply aren't delivering increased productivity even when a project is managed "by the book." The oldest conventional explanation blames this stagnation on poor management. This article attempts to demonstrate that there may be more systemic, albeit counterintuitive, causes for the "productivity paradox." Specifically, the productivity potential of software engineering tools may be squandered not because organizations fail to institute the necessary managerial practices but because the software development environment is a complex social system that causes such practices to have unintended consequences. In real life, organizations are much worse off. Many more things can go wrong, and often do.