> STRATEGY MODELING FOR TOP MANAGEMENT:
> Going Beyond Modeling Orthodoxy at Bell Canada*
> 16th International Conference of the System Dynamics Society
> Quebec, Canada, July 20-23, 1998
>
> Alan K. Graham, Ph.D.
> Pugh-Roberts Associates
> 41 Wm. Linskey Way
> Cambridge, Mass. 02142
>
Alan.K.Graham@PA-Consulting.com
> Robert J. Walker
>
> Bell Canada
> 105 Hotel de Ville
> Hull, Quebec, Canada J8X 4H7
>
Bob.Walker@bell.ca
>
> 1. Summary
> In 1997, Bell Canada faced two of the most significant challenges in its
> 117 year history. Beginning 1998, Bell would lose the last of its
> regulated monopolies, facing competition everywhere. Simultaneously, the
> global "sea change" in telecom technology accelerated. But Bells
> internal organization and experience revolved around functional "silos,"
> with little infrastructure for high-level cross-functional strategizing.
> To prepare for these challenges, we implemented a large-scale system
> dynamics (SD) simulation model of Bell and its business environment.
>
> The widely taught and researched paradigm for SD modeling is incrementally
> developing a model from scratch, using a mixed team of modelers and
> stakeholders, iterating until the model results are satisfactory, and then
> publishing the results. The modeling context at Bell differed sharply
> from the situation more commonly addressed by recent SD literature: The
> target was thoroughly-validated strategic results, not insights. For a
> comprehensive model, many dozens of informants were needed, not a single
> team. The target users were top executives leading an urgent business
> transformation, not mid-level managers with time to spend participating in
> a model development team. Some results were needed very soon after the
> start, and frequently thereafter.
>
> So the standard academic approach to using SD modeling was almost certain
> to fail. We therefor used a different approach to be able to use SD on
> this very important set of issues. We constructed, validated, and used
> models with what might be called a "team of teams" that eventually
> involved some 160 people. To deal with schedule constraints, we started
> from a pre-existing framework model and maintained two and sometimes three
> model versions, allowing us to respond quickly to analysis requests.
>
> The first year of modeling work can be considered a moderate success,
> having confirmed the viability of the overall approach and taken a first
> pass through an ambitious set of goals. We did integrate knowledge from
> previously-disconnected silos in strategically critical areas, where
> information was missing from the standard functionally-based models and
> reporting systems. We found a roughly 30% improvement in cashflow-based
> company valuation between the most-discussed strategic options and a set
> of strategies identified through simulation analysis.
>
> Although the model now integrates the knowledge we eventually drew from
> the functional silos, we have just begun to give managers that more
> integrated view. The themes of management involvement and education are
> expected to become more prominent going forward.
>
>
>
Alan K. Graham, Ph.D.
Pugh-Roberts Associates,
a division of PA Consulting Group
41 Linskey Way
Cambridge, MA 02142
Phone: (617) 864-8880
Fax: (617) 864-8884
E-mail:
Alan.K.Graham@pa-consulting.com
www.pa-consulting.com/pra.htm