FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, United Kingdom, June 10-12, 2013
FUTURE DECISION-MAKERS AND COMPLEXITY:
LEARNING PROBLEM STRUCTURING THROUGH
SYSTEM DYNAMICS
Eliseo Vilalta-Perdomo,
Lincoln Business School
University of Lincoln, UK
Rationale
Aim: This paper deals with the challenge of
introducing our students, future decision-makers, to
the process of simulating complex behaviours.
Proposal: To engage students in a real research
project in order to learn complex problem structuring
through System Dynamics (SD).
Contribution: The effectiveness and efficiency of
different SD educational approaches can be
evaluated by means of Forrester’s criteria.
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
Decision–making
Traditional approach
“I keep six honest working men
(They taught me all I knew);
Their names are What and Why and When
And How and Where and Who”.
Kipling R. (1902) ‘The Elephant's Child’, Just So Stories
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
Limitations to decision–making
Interpretations of ‘complexity’
1. Detailed complexity
• Environments constituted by
immense amounts of actors
interacting through (almost)
infinite relationships.
Emergency
2. Dynamic complexity
• Subtle changes recognizable
only after it is too late to
react.
FUBUTEC 2013, 9th Future Business Technology Conference
Unexpected side-effects
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
Complexity awareness:
System Dynamics as a possibility
• System dynamics (SD) is a computer-aided
approach to policy analysis and design. It
applies to dynamic problems arising in complex
social, managerial, economic, or ecological
systems — literally any dynamic systems
characterized by interdependence, mutual
interaction, information feedback, and circular
causality
(System Dynamics Society, 2013)
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
Complexity awareness:
Aspects of reality explored through SD
• Business dynamics (Forrester 1961, Sterman
2002; Morecroft 2007; Warren 2008)
• Organizational behaviour (Senge 1992)
• Urban viability (Forrester 1969)
• Sustainability (Forrester 1973, Meadows et al,
1993)
• Systems thinking (Kauffman 1980)
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
SD capabilities
Why to teach SD?
• Organising descriptive information
• Retaining richness of the real process
• Building on the experiential knowledge of
managers
• Revealing the variety of dynamic behaviours
according to different policies
(Forrester, 1989)
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
SD capabilities
Organising descriptive information
• Traditional approach: To provide order to observations
before these are collected –i.e. use authority (Zeeuw, 2001).
– Quality (Deming, Juran and Ishikawa) to systematize observations
and coordinate organizational actions for improvement.
– System (Ackoff, Beer, Checkland or Friend) to identify how to
induce certain kind of interaction between diverse elements that
constitutes an organization, to improve also the organizations’
performance.
• SD approach : To organize what we observe through ‘generic
structures’ –i.e. ‘system archetypes’ (Senge, 1992;
Wolstenhome, 2003).
– Behaviours such as exponential growth, goal seeking or oscillation
are simulated through accumulators (‘levels’), rates of changes
(´flows’), and mutual interactions (‘feedback’).
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
SD capabilities
Retaining richness of the real process
• Traditional approach: To select a section of reality,
to identify its characteristics, and to extend this
characterization to other parts of it.
– Statistics and Probability: Limitation unable to look at
emergent behaviours
• SD approach: To identify which elements and/or
interactions trigger preferred behaviours
– Systems thinking: SSM, VSM, CHS, Interactive
Planning
– Complex systems: Chaos theory, Complex Adaptive
Systems
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
SD capabilities
Building on the experiential knowledge
• Traditional approach: To separate knowledge
from action, and thus the bearer of knowledge
from the influence of his own intervention.
• SD approach: Learning by doing – e.g.
simulation
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
SD capabilities
Behaviours related to different policies
• Traditional approach: Impossibility Theorem
(Arrow, 1950); Non-technical problem (Hardin,
1968); Wicked problems (Rittel and Webber, 1973)
• SD approach: Testing different scenarios /
configurations – e.g. simulation
– Key objectives: To define new policies and evaluate their
impact. To increase understanding and also learning,
‘insight generation capacity’
– Main challenge: to make it more accessible to the widest
range of scholars, students and policy makers.
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
Teaching SD
Sizing the task: What is SD?
15.2%
I don't know
42.4%
The study of Supply Chain
The study of systems' flows
33.3%
The study of plant distribution
9.1%
Application of tools for optimal
solutions
To model and observe a system
6.1%
To model systems that change
on time
3.0%
36.4%
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
Teaching SD
Sizing the task: What is SD for?
3.0%
6.1%
6.1%
I don't know
24.2%
Better solutions
To improve industrial processes
18.2%
To make better decisions
To predict
24.2%
6.1%
To design a system
To understand systems' behaviors
To run systems smoothly
24.2%
Effcient use of resoucer
3.0%
FUBUTEC 2013, 9th Future Business Technology Conference
30.3%
To use in enterprises
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
How to teach SD?
Traditional approach
1.
2.
3.
4.
5.
6.
7.
Define problems dynamically, in terms of graphs over time.
Strive for an endogenous, behavioural view of the dynamics of the system.
Think of all concepts in the real system as continuous quantities
interconnected in loops of information feedback and circular causality.
Identify independent stocks or accumulations (levels) in the system and
their inflows and outflows (rates).
Formulate a behavioural model –i.e. computer simulation model expressed
in nonlinear equations.
Derive understandings and applicable policy insights from model
outcomes.
Implement changes resulting from model-based understandings and
insights.
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
How to teach SD?
PSM approach
We induce our students to engage in a process of research.
• To define a problem to be solved (problem-based learning, PBL).
• To introduce a case to be studied (method of cases, MC).
• To enrol students in a project (project-oriented learning).
Problem Structuring Methods:
Family of participatory and interactive methods whose purpose is
to assist groups of diverse composition tackle a complex
problematic situation of common interest
(Rosenhead 2009)
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
How to teach SD?
PSM approach - Example
• El Bosque de la Primavera - protected area of 30
thousand hectares. The lung of Guadalajara (Mexico) 5
million inhabitants
• The students’ project:
– identification of different variables that affect the viability of
the forest.
– exploring diverse policies and their impact in the forest
density.
– conduct several meetings with the ‘clients’ - engaged
research.
– SD modelling (urbanization, geothermal stations, material
banks, illegal hunting, uncontrolled exploitation, excessive
pasturing, fires, and motorcycling)
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
How to teach SD?
PSM approach - Example
• Model outcomes were a surprise for ‘clients’:
– Amount and size of the fires not related to visitors, but
to weather. Winter rather than Summer the dangerous
period, as then it is the dry season in Mexico.
– Impact of reforestation. More effective and efficient to
increase the reforestation than buying equipment to
reduce fires
– Fires (related to natural causes) are healthy to forest
ecosystems
– Restricting access policies are not effective measures –
e.g. reducing visitors’ quotas
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
How to teach SD?
PSM approach – Other examples
Different regional/municipal issues:
• Pollution impact of a refinery in the city of
Salamanca
• Water consumption in Irapuato
• Future education requirements in Zapopan
• Public transport in Guadalajara
• Deterioration of the Chapala Lake
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
How to teach SD?
Any advantages/disadvantages
Traditional
Problem Structuring Method
• Aim: Model about something
• Effective: to solve well-defined
problems
• Efficient: it reduces variability
and increases standardization
in the teaching process
• Aim: Model for something
• Effective: to build models with
people unfamiliar with SD
• Efficient: students learn at
first-hand how to deal with a
complex situations, and
‘clients’ usually become
surprised by the outcomes
(insight generation)
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
How to teach SD?
Conclusions
SD is an effective and efficient way to teach and
learn how to model complex behaviours.
– First, it let us to introduce and test what is known
in different scenarios and situations.
– Second, it allows bringing new experiences to what
is known.
– Third, it can be used to teach and learn reducing
potential damages to the real situation.
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
How to teach SD?
Future activities
• Criteria to test if SD as a PSM is a more effective
and efficient educational approach.
• Initial exploration
• To conduct SD education through a formal process
of research
• To involve students in the development of ‘models
for something’:
– Effective, some knowledge is acquired and
– Efficient, enough to avoid future errors by doing right
actions in the present
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013
Thanks for your attention
Any questions or comments?
FUBUTEC 2013, 9th Future Business Technology Conference
University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013