SD in the elevator

["Norman Marshall"]

Interesting discussion. The environment I work in sets a fair bit of store
by the mental discipline of having at your fingertips the 30 second "so
what" for any issue, however complex, as well as the wheelbarrow to carry
away the final project report, so Im in the "it depends" camp on the side
discussion on why we need elevator speeches at all.

When I have been put on the spot, this has worked ok on one or two
occasions. Caveat emptor.

"System dynamics is about reclaiming blind spots, three in particular:
complex side effects, time delays and soft variables. Many managers will
say that if they had to think through every possible side effect they would
never decide anything; they will concur with Keynes that "in the long run
we are all dead" as a justification for not thinking through the
consequences of their actions very far into the future; and that although
they know that customer satisfaction or employee morale is VERY important,
it is opening up a can of worms to try and quantify what drives those
variables. So lets cut the waffle and focus on next quarters earnings.

System dynamics provides a paper and pencil methodology for mapping theses
complex interrelationships, and a computer based modelling capability for
quantifying their outcomes, that gives us back the ability to take these
factors into consideration, without losing a sharp focus (if that is where
your priority lies) on the stream of quarterly earnings out into the
future".

From: "Norman Marshall"<Norman_Marshall@MCKINSEY.COM>

[Mohammad Mojtahedzadeh]

Norman Marshall raises an interesting point in the scope of the practice of
system dynamics. Thinking clearly and precisely in the domain of both
quantitative and qualitative information about the real world along with
mapping techniques for eliciting stock-and-flow and feedback loop
structures, what Richmond calls operational thinking, are the foremost key
to learning about complex systems. Andersen (ISDC 1997) refers to such
level of learning which sharpens clarity of thoughts and provide a basis
for better communication as the level I and level II insights.

The more advanced insight and learning about the complex systems, however,
comes from rigorous modeling effort and understanding the dynamic
consequences of side effects and time delays. It is the lack of
understanding of side effects and time delays that organizations often
foster contradictory and unrealistic goals. For instance, the market
growth model (Forrester 1968) shows how, in the presence of time delays and
side effects, adopting aggressive revenue generation and cost saving
strategy can lead to "troubled growth" (growth along with oscillation).

Keynes did not claim that things happen instantaneously; his famous quote
--we are all dead in the long run-- was indeed to undermine the comparative
analysis of classical economic theory. His multiplier effect is a subtle
dynamic phenomena; it takes rounds of transactions for the multiplier
effect to manifest its ultimate impact. The Keynes multiplier effect
contains the side effect complexity as well. This side effect reveals that
an exogenous change in investment, for example, will have a much bigger
impact on the aggregate demand than the magnitude of the change itself.



Mohammad Mojtahedzadeh
High Performance Systems, Inc.
From: Mohammad Mojtahedzadeh <mohammad@hps-inc.com>

["David M. Bridgeland"]

>"System dynamics is about reclaiming blind spots, three in particular:
>complex side effects, time delays and soft variables.

I dont particularly want to get involved in this discussion, but I
did think your one sentence summary was by the far the best, and also
the most relevant for how SD is actually used. Kudos to you!

Dave.
From: "David M. Bridgeland" <davbr@powersim.com>