Ventana software support forum

Posted: **Thu Apr 16, 1998 12:32 pm**

In most of the litterature and examples Ive been able to study so far,
there is a tendency toward connecting System dynamics to strategic
decisions and not so much tactical (or operational) decisions. Is this a
common opinion? I would appreciate comments to why this might be the case.

Could SD be regarded as a strategic tool due to:
- its complexity or extensivity (developing relevant models could be time
consuming, validation...)
- learning opportunities=20
- including various delays
- ....
other elements...?

Are there arguments for using SD (instead of other tools) within a shorter
time horizon? (An already existing simulation modell (developed for
stratefic purposes) could perhaps act as basis for more tactical decisions
later?)

What about using SD together with other teqniques so as to exploit possibly
complementary features?

Arnhild St=F8vik
The Norwegian University of Science and Technology
Department of Industrial Economy and Technology Management
Section of Managerial Economics and Operations Research
phone: 73 55 07 42=20
e-mail: arnhilds@indman.sintef.no

Posted: **Fri Apr 17, 1998 2:30 pm**

Sir:
I think it may be more of an issue of single event sensitivity. The tactical
level is much more likely to be influenced (at least in the short term) by
events, whereas, at the strategic level, the impact of these tends to be
mitigated. I believe the same may be true in using SD in the short term:
events or policies may have one short term impact and a completely different
long term impact. The longer term appears (to this SD novice) as necessary to
allow the impacts of events or policies (and their unintended consequences) to
combine. Ive been studying risk averse behavior in military organizations and
the long term impact of decisions is often opposite of their planned and short
term effect. Hope this helps.

Bill Bell
From: Billdbl2@aol.com

Posted: **Sat Apr 18, 1998 5:53 pm**

Arnhild,

Your query is most relevant. In relpy to your comment:

"What about using SD together with other teqniques so as to exploit =
possibly
complementary features?"

>From 1993 to 1996, I have worked on developing a formal methodolgy that =
integrates SD project models at the strategic level with PERT/CPM tools =
at the tactical level. You may find some references and also a paper =
on-line on:

http://piano.dsi.uminho.pt/~alex/
http://piano.dsi.uminho.pt/~alex/sydpim ... namics.htm

Hope this helps.

Regards,

Alexandre Rodrigues
From: Alex.Rodrigues@dsi.uminho.pt (Alexandre Rodrigues)

Posted: **Sat Apr 18, 1998 11:36 pm**

Hi Arnhild,

I have a few comments to your query.
I think that SD is a very powerful methodology to support strategic
organisational learning.
In fact, it allows policy makers to better understand the effects of
their decisions on a longer time horizon and supports them in a proper
definition of relevant system boundaries.

SD is likely to support the strategic planning process of a firm as the "planner"
may better figure out possible (delayed and non-linear) reactions to business
strategies from competitors, customers, potential entrants, suppliers, etc.

However, SD can also strongly support tactical/current decision making.
In fact, it helps decision makers to understand the impact on a longer
time horizon of "daily" policies they often implicitly pursue.
The parable of the "boiled frog" (from the V Discipline) provides a
significant example on this issue.

I think that potential benefits related to the use of SD in understanding
current decisions are not often taken into account with the same emphasis
of strategic decisions.

Research we have been doing at CUSA-System Dynamics Group/University of Palermo
on small business growth processes shows how current decisions often prejudice
future growth, because of entrepreneurs bounded rationality, bias and full
involvement in operation activities.
Matching SD with traditional accounting tools into interactive learning environments
is likely to strongly support small business entrepreneurs
in drawing up their budgets and, particularly, to detect how commercial policy levers
(e.g. terms of payment allowed to customers) may impact on a longer
time horizon on sales revenues and profitability, on a side, and on liquidity,
on another side.

If you have any questions or comments on the above issues, please dont hesitate
to contact me.

Best regards,

Carmine Bianchi

_____________________________________________________________
Carmine Bianchi
Associate Professor of Business Management
University of Bari and Palermo (ITALY) - Faculty of Economics

E-MAIL: bianchi@unipa.it; http://www.unipa.it/~bianchi

- Phone (office) : +39.091.6254313
- Phone & Fax (office) : +39.091.6254532
- Mobile phone : 0338.9244463
- Phone (home) : +39.091.6374869

ADDRESS:
c/o C.U.S.A. - SYSTEM DYNAMICS GROUP
P.zza A. Gentili, 12
90100 PALERMO (ITALY)

Posted: **Sat Apr 25, 1998 6:53 pm**

In my view, SD can be used on tactical and strategic levels. Nevertheless=
,
in my experience it works better on strategic levels.

The complexity of the long term future and therefore of the development o=
f
strategies asks for a different approach than the nearer future were cert=
ain
forecasts are possible. If we can work with forecasts and are more on a
tactical level, SD might be a good suplmentary method for the development=
of
tactics. Forecasts etc might even be used as inputs for SD modells.

I see the strenghts of SD modells in an area were forecasts become very
unreliable. Nevertheless, the development of strategies is critical. SD
modells help to understand the complexity of the future, give people the
tool to learn a higher degree of flexibility to use for the strategy
development, and can make strategists aware of so far unthought thoughts.

Regards,
Bernhard Kerres

_____________________________________

Bernhard Kerres
Booz-Allen & Hamilton
CMT - Munich
E-Mail: kerres_bernhard@bah.com
Tel.: +49-89-545250
Fax: +49-89-54525500
_____________________________________

Posted: **Mon Apr 27, 1998 4:02 pm**

Dear All,
You may find a brief discussion of Strategic versus Tactical in Project =
Management, in the paper below.
A Rodrigues and J Bowers (1996) "System Dynamics in Project Management: =
a comparative analysis with the traditional methods". System Dynamics =
Review. Vol 12 (2), pp. 121-139.

Regards,

Alexandre Rodrigues

___________________________________
Alexandre J G P Rodrigues

Departamento de Sistemas de Informa=E7=E3o
Escola de Engenharia
Universidade do Minho
4800 Guimar=E3es
Portugal, EU

Department of Information Systems
The School of Engineering
University of Minho
4800 Guimar=E3es
Portugal, EU

Tel.: +351 (0)53 510 149
Fax.: +351 (0)53 510 250
Email: Alex.Rodrigues@dsi.uminho.pt
Web: http://www.dsi.uminho.pt/~alex/

Posted: **Wed Nov 18, 1998 9:00 am**

Strategy focuses on the quality of solution; tactical focuses on
time-to-solution.

SD modeling allows simulation of causal relationships that address strategic
objectives. Modeling tactical processes to see if they can run faster is in
fact a strategic activity.

Consumers of SD models my be in tactical mode. These consumers want the
model to give them the fast answer. However, all modelers will agree that
SD models are much more than black boxs that generate fast answers. There
are many good tactical ways to use SD models, but they are always preceded
by an adequate strategic study of the models.

From: "Compton, Dan" <dan.compton@intel.com>

Posted: **Fri Nov 20, 1998 7:15 am**

In Bottom Up Marketing, Ries and Trout argue that "companies that set
strategy first usually refuse to accept failure because they figure that
all thats needed to turn a project into winner is a minor adjustment in
tactices."

They define tactic as a "competitive mental angle".

"A tactic must have a competitive angle in order to have a chance at
success. This does not necessarily mean a better product or service, but
rather there must be an element of differentness."

"A tactic must have a competitive mental angle. In other words, the
battle takes place in the mind of the prospect. Competitors that do not
exist in the mind can be ignored."

"A competitive mental angle is the point in the mind that allows your
marketing program to work effectively."

They define strategy as a coherent marketing direction. "A strategy is
coherent in the sense that it is focused on the tactic selected."

"Second, a strategy encompasses coherent marketing activities. Product,
pricing, distribution..."

"Finally, a strategy is a coherent marketing direction. Once the
strategy is established, the direction shouldnt be changed."

"A tactic is a singular idea or angle. A strategy has many elements, all
of which are focused on the tactic."

"A tactic is communications-oriented. A strategy is product-, service-,
or company-oriented."

"The tactic is the angle that produces the results. The strategy is the
organization of the company to produce the maximum tactical pressure."

In SD terms it suggests that tactics are mental models while strategy is
more quantitative, perhaps thought of as the logistics of using the tactic
to best advantage.

Bill Braun
From: Bill Braun <medprac@hlthsys.com>

Posted: **Tue Nov 24, 1998 9:03 am**

Bill Braun quotes, helpfully, from a marketing source (Bottom Up Marketing,
Ries and Trout) about their uses of "tactics" and "strategy."

I would only caution that a marketing perspective on these terms is NOT the
same as an enterprise-wide perspective. As a strategic planner, these are
not the definitions I use. For example, saying that "A tactic is
communications-oriented." strikes me as a very limited definition outside of
a marketing campaign.

More generally, a tactic is any action plan aimed at helping to achieve a
specified strategic goal. This could make a tactic "communications oriented"
or operationally oriented or customer service-oriented or anything else that
has to be accomplished in order to take the organization in the direction
the strategy dictates.

In shorthand, I sometimes say that a strategy is a "what" (must be achieved)
and a tactic is a "how" (to achieve it -- usually also including a "who" and
"by when" and "where.")

From: "John Gunkler" <jgunkler@sprintmail.com>

Posted: **Thu Nov 26, 1998 10:10 pm**

Elsewhere in their book, Ries and Trout refer to tactics as "the thing that
works". I take this as meaning that an organization has discovered a/the
connection with the customer. This could be, as John Gunkler says,
communications oriented or operationally oriented or customer service
oriented or anything else oriented.

Once an organization discovers something "that works" then they can
concentrate on developing a strategy that aligns the organization with a
set of actions that facilitate making the most of the tactic.

There has been much discussion of validating models and the accuracy of
models. To the extent that tactics is/are the "thing that works" it may be
more quantitative and thus easier (said cautiously) to model. If strategy
is taken to be the things done to make the most of a successful tactic,
then the strategic part of the model would be the exploration of the murky
variables that Bernhard Kerres refers to (as I understood his remarks).

Bill Braun
From: Bill Braun <medprac@hlthsys.com>

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