QUERY Future Development Directions
Posted: Fri Feb 09, 2007 12:36 pm
Posted by Richard Stevenson <rstevenson@valculus.com>
Jay Forrester comments that “system dynamics is now on a plateau.”
So, on a plateau after 50 years, is this not an ideal juncture SD to consider its future options seriously? Much of the recent discussion about the future of SD in these pages has been fairly defensive or obscure - although on balance, mostly supportive of my original propositions.
We now wish to suggest a much more positive vision of the future. By illustration we can extend Jay’s moon mission analogy.
The Moon Mission Analogy
When President John F Kennedy made his promise of ‘of landing a man on the moon and returning him safely to the earth’ in the early 60’s, NASA did not have too much of an idea as to how this would be achieved. The rocket science design and engineering professional disciplines simply did not exist. NASA did, however, have a range of ‘products’ in mind in the form of Saturn V rockets, Lunar Excursion Modules etc. They needed to produce at least 15 Apollo ‘products’ to repeatable, quality assured standards in order to deliver JFK’s target.
Professional engineering disciplines such as rocket design and build, zero defect manufacturing, large scale multidisciplinary project management etc were, however, quickly conceptualised, assimilated, documented and implemented. The rest is history as they say. Even in the case of Apollo 13, the engineers had the fix to ‘return them safely to earth’.
The key factor that galvanised the rocket science engineering fraternity was the specific challenge of getting to the moon (and
back) within a decade. Their success did NOT mean that they then knew everything there is to know about physics and about the universe – but it was still sensational – and it vastly increased their knowledge in the process.
How Deep is the “Systems Jungle”? The SD Paradox.
Jay’s further argument is that “Those who have only been exposed to the loose talk of ""systems thinking"" find it sufficiently helpful that they think they have arrived, when actually they are probably only about one per cent of the way into systems. Likewise, the majority of those who have achieved the present average level of skill in system dynamics find it so powerful that they feel they have learned it all, when actually they have gone only a few percent of the way into the unknown of nonlinear feedback systems.”
This appears to be an argument for cautious, incremental development that should be led only by a tiny number of “expert” practitioners who know all there is to know about nonlinear feedback systems – i.e.
almost by definition, academics and a very few consultants. The problem with this view is that learning is very slow - and a real issue is that success stories rarely get published, because of confidentiality. (We need to ""dig up the bodies"" of successful SD projects - remember that medical science progressed on the back of grave robbers!)
So our (contrary) view is that developments in SD must be led from (and by) the business community - and from a specific needs perspective. Only by using SD successfully and continuously on serious, widely recognised problems will the wider world ever get to hear about SD!
Having said that, it is unquestionably true that in the hands of novices, SD tools and methods can be dangerous. There is a paradox here. We can’t do SD in anger until we are good enough. But we can’t become competent without doing serious SD. And when we're successful, often we can't talk about it.
We need to break the circle.
Certain fundamental (and certainly non-trivial) systemic insights are already well established and indeed repeatable and useable across a wide range of industries. We need the confidence to lean on these insights to build “success stories” – and proclaim them from the rooftops. And just as to the point, we need the confidence to focus on specific markets - and to integrate SD with tools that managers already use!
Extending the Moon Analogy to SD in Capital Industries
For example, and in particular, ‘capital industries’ having long investment cycles (such as utilities, oil and gas and
pharmaceuticals) all have common issues and problems that require systemic solutions.
Consider for example:
§ Asset life cycle management in utility industries
§ Balanced portfolio planning in pharmaceuticals
§ Capacity planning in heavy capital industries
….where there is already a well developed knowledge bank of SD 'solutions'.
The common glue between all these long life cycle capital industries is the management of future value. In particular, managers must balance short-term performance with long-term value creation, also balancing the interests of multiple stakeholders. Mostly, ‘capital’
managers are prisoners of previous management generations, and likewise won’t be around to see the outcomes of their own decisions.
It’s an SD feeding ground, surely!
In the same manner that the Apollo programme galvanised ‘rocket science’ into a sustainable, professional engineering profession, we believe that the introduction of widely available, customisable, strategic planning toolsets or products – in capital industries in particular - will do the same for the SD ‘profession’.
New web-based simulation toolsets that support SD integration with other toolsets - for example with DCF valuation and balanced scorecards - will support this objective.
This route will represent the next stage of SD’s development from its ‘ current plateau’. This (dare we say) ‘commoditisation’ approach is a natural progressive step in the evolution of any new ‘technology’, be it rocket science, SD or penicillin or silicon chips or microwave technology - or looking to the future, nanotechnology.
Let’s ground this proposition in some hard market feedback….
The market need
Consider a very recent quote in a book from a thought leader in the corporate finance - Chief Financial Officer (CFO) - space.
‘In the next five years the systems used for developing, resourcing and managing strategic and operational plans will change beyond all recognition. They’ll be focussed on supporting strategy; be dynamic and continuous in operation; show cause and effect of one KPI on
another, and the impact of one end user’s activity on another.’
Nov 2006: CC Read ‘Creating Value in a Regulated World’
The script could hardly be written better! The corporate market place is desperate for credible solutions to its strategic planning problems to solve such problems as:
§ Balancing short-term performance with long-term value creation
§ Integrating strategy across different management groups and
perspectives
§ Testing alternative strategies without risk and before
implementation
§ Understanding how tangible and intangible resources interact
to create value, over time
§ Communicating strategy internally and externally, to
different stakeholder groups.
The use of ‘one off’ SD interventions will of course always have a home. (Only yesterday we were discussing the use of SD in the re- nuclearisation of the UK electricity supply industry).
However, our company Valculus sees a huge opportunity for SD to gain
a major foothold in the business market place by providing
repeatable and customisable toolsets to support strategic decision- making in strategic value management. This route represents a heaven sent opportunity for the SD community to ‘come of age’.
In conclusion, whereas we believe we have a strong vision at Valculus we are not arrogant (or foolish) enough to think we can do it alone.
We therefore welcome comments and expression of interest from experienced SD practitioners.
Richard W Stevenson
John F King
February 2007
Valculus Ltd
UK
Posted by Richard Stevenson <rstevenson@valculus.com> posting date Thu, 8 Feb 2007 17:33:38 +0000 _______________________________________________
Jay Forrester comments that “system dynamics is now on a plateau.”
So, on a plateau after 50 years, is this not an ideal juncture SD to consider its future options seriously? Much of the recent discussion about the future of SD in these pages has been fairly defensive or obscure - although on balance, mostly supportive of my original propositions.
We now wish to suggest a much more positive vision of the future. By illustration we can extend Jay’s moon mission analogy.
The Moon Mission Analogy
When President John F Kennedy made his promise of ‘of landing a man on the moon and returning him safely to the earth’ in the early 60’s, NASA did not have too much of an idea as to how this would be achieved. The rocket science design and engineering professional disciplines simply did not exist. NASA did, however, have a range of ‘products’ in mind in the form of Saturn V rockets, Lunar Excursion Modules etc. They needed to produce at least 15 Apollo ‘products’ to repeatable, quality assured standards in order to deliver JFK’s target.
Professional engineering disciplines such as rocket design and build, zero defect manufacturing, large scale multidisciplinary project management etc were, however, quickly conceptualised, assimilated, documented and implemented. The rest is history as they say. Even in the case of Apollo 13, the engineers had the fix to ‘return them safely to earth’.
The key factor that galvanised the rocket science engineering fraternity was the specific challenge of getting to the moon (and
back) within a decade. Their success did NOT mean that they then knew everything there is to know about physics and about the universe – but it was still sensational – and it vastly increased their knowledge in the process.
How Deep is the “Systems Jungle”? The SD Paradox.
Jay’s further argument is that “Those who have only been exposed to the loose talk of ""systems thinking"" find it sufficiently helpful that they think they have arrived, when actually they are probably only about one per cent of the way into systems. Likewise, the majority of those who have achieved the present average level of skill in system dynamics find it so powerful that they feel they have learned it all, when actually they have gone only a few percent of the way into the unknown of nonlinear feedback systems.”
This appears to be an argument for cautious, incremental development that should be led only by a tiny number of “expert” practitioners who know all there is to know about nonlinear feedback systems – i.e.
almost by definition, academics and a very few consultants. The problem with this view is that learning is very slow - and a real issue is that success stories rarely get published, because of confidentiality. (We need to ""dig up the bodies"" of successful SD projects - remember that medical science progressed on the back of grave robbers!)
So our (contrary) view is that developments in SD must be led from (and by) the business community - and from a specific needs perspective. Only by using SD successfully and continuously on serious, widely recognised problems will the wider world ever get to hear about SD!
Having said that, it is unquestionably true that in the hands of novices, SD tools and methods can be dangerous. There is a paradox here. We can’t do SD in anger until we are good enough. But we can’t become competent without doing serious SD. And when we're successful, often we can't talk about it.
We need to break the circle.
Certain fundamental (and certainly non-trivial) systemic insights are already well established and indeed repeatable and useable across a wide range of industries. We need the confidence to lean on these insights to build “success stories” – and proclaim them from the rooftops. And just as to the point, we need the confidence to focus on specific markets - and to integrate SD with tools that managers already use!
Extending the Moon Analogy to SD in Capital Industries
For example, and in particular, ‘capital industries’ having long investment cycles (such as utilities, oil and gas and
pharmaceuticals) all have common issues and problems that require systemic solutions.
Consider for example:
§ Asset life cycle management in utility industries
§ Balanced portfolio planning in pharmaceuticals
§ Capacity planning in heavy capital industries
….where there is already a well developed knowledge bank of SD 'solutions'.
The common glue between all these long life cycle capital industries is the management of future value. In particular, managers must balance short-term performance with long-term value creation, also balancing the interests of multiple stakeholders. Mostly, ‘capital’
managers are prisoners of previous management generations, and likewise won’t be around to see the outcomes of their own decisions.
It’s an SD feeding ground, surely!
In the same manner that the Apollo programme galvanised ‘rocket science’ into a sustainable, professional engineering profession, we believe that the introduction of widely available, customisable, strategic planning toolsets or products – in capital industries in particular - will do the same for the SD ‘profession’.
New web-based simulation toolsets that support SD integration with other toolsets - for example with DCF valuation and balanced scorecards - will support this objective.
This route will represent the next stage of SD’s development from its ‘ current plateau’. This (dare we say) ‘commoditisation’ approach is a natural progressive step in the evolution of any new ‘technology’, be it rocket science, SD or penicillin or silicon chips or microwave technology - or looking to the future, nanotechnology.
Let’s ground this proposition in some hard market feedback….
The market need
Consider a very recent quote in a book from a thought leader in the corporate finance - Chief Financial Officer (CFO) - space.
‘In the next five years the systems used for developing, resourcing and managing strategic and operational plans will change beyond all recognition. They’ll be focussed on supporting strategy; be dynamic and continuous in operation; show cause and effect of one KPI on
another, and the impact of one end user’s activity on another.’
Nov 2006: CC Read ‘Creating Value in a Regulated World’
The script could hardly be written better! The corporate market place is desperate for credible solutions to its strategic planning problems to solve such problems as:
§ Balancing short-term performance with long-term value creation
§ Integrating strategy across different management groups and
perspectives
§ Testing alternative strategies without risk and before
implementation
§ Understanding how tangible and intangible resources interact
to create value, over time
§ Communicating strategy internally and externally, to
different stakeholder groups.
The use of ‘one off’ SD interventions will of course always have a home. (Only yesterday we were discussing the use of SD in the re- nuclearisation of the UK electricity supply industry).
However, our company Valculus sees a huge opportunity for SD to gain
a major foothold in the business market place by providing
repeatable and customisable toolsets to support strategic decision- making in strategic value management. This route represents a heaven sent opportunity for the SD community to ‘come of age’.
In conclusion, whereas we believe we have a strong vision at Valculus we are not arrogant (or foolish) enough to think we can do it alone.
We therefore welcome comments and expression of interest from experienced SD practitioners.
Richard W Stevenson
John F King
February 2007
Valculus Ltd
UK
Posted by Richard Stevenson <rstevenson@valculus.com> posting date Thu, 8 Feb 2007 17:33:38 +0000 _______________________________________________