Archives For System Dynamics

We are all different, right? Each person has its educational, contextual background, history, personal characteristics, hence a particular way to see the world and then, to act in our lives. You can decide to study mathematics, your friend could choose to go on holidays to Paris, and your neighbor could enjoy staying home the whole weekend watching TV. We are different.

However, have you noticed that many of your problems are the same as your friends’ ones?

  • Have you ever been on traffic jam on a highway and asked yourself: why are we stopped as if there were a traffic light when actually there is no one?
  • If you ever had the chance to see the market penetration ratio for a new product, didn´t you wonder why you get always the same penetrations curve no matter who deploys the marketing strategy?
  • Why all the countries have inflation? Why all the big cities have traffic problem?
  • Are you dealing with problems originated by a solution implemented some time ago? A solution that brought more problems instead of real solutions?
Here you have some cases of common problems; they happen all the time, everywhere and generally they are quite similar. But then, why do they still happen and we are unable to solve them definitely?
 
It turns out to be extremely hard to understand the systems in which we are involved in. And actually, you are part of the traffic system of your city, a member of the market that decides whether a new product will succeed or not, part of the economic system in your country, and part of a hundred of other systems. “System Dynamics” is a discipline focused on understanding the inter-relations among the different components of the system, identifying loops, letting you understand the originally unexpected results: political interventions that do not more than increasing poverty or business strategies aimed to gain new clients that lead to losing the old ones and eventually reducing the company’s opportunities to keep on growing.
 
“System Dynamics” focuses its attention on STRUCTURES. Structures end up conditioning the individual behaviors and the inter-relations among them, then defining the global results and behaviors. That is the reason why, no matter the people involved in the system, the results always are qualitatively equal.  And by structures I refer to the laws, rules of the system, the available information, the control mechanisms, the carrying capacities, the way of connecting the parts, etc. Structures lead the way you understand reality, and then, the way you act and react.
 
Life is somehow like a large and a little bit more complex game. In a game, you have clear rules that say what you can do or do not, the cases that you will be rewarded and the cases you will be punished, the information you will have available at the time of making a decision, and also, the time when you will be able to act. The game’s creator cannot anticipate which gamer will win, but he definitely knows the number of resulting winners, the ending conditions of the other participants, and also an idea of the possible evolutions and alternatives that could arise from the game. And why? Because he understands the structures behing it.
 
But don’t panic, you can still consider yourself a free person! “System Dynamics” do not look at individual behaviors and his particular way of acting. It studies the masses’ behavior, the global results. You are free and you will decide differently from others, but at the end the global results will be quite predictable by understanding the structures of the system you are part of.
 
In the book “Foundation” by Isaac Asimov, threre is an interesting dialogue between Hari Seldom and Gaal Dornick:
 
HS: – “What of psychohistory?”
GD: -“I haven’t thought of applying it to the problem.”
HS:- “Before you are done with me, young man, you will learn to apply psychohistory to all problems as a matter of course”
 
Without making comparison, and without going so extreme, I would say these last words to you but regarding “System Dynamics“. Once you start digging in the world of System Dynamics, you will see how useful it will be to understand a great part of the problems we face today. And remember that understanding the problem, you have 75% of the path to the solution completed!
 
“You will learn to apply System Dynamics to all problems as a matter of course”
 
Suggested bibliography: 
- “Business Dynamics” – by John D. Sterman.
- “The Fifth Discipline” – by Peter Senge.
- See other posts in our blog, related with structures: 
“Predator-Prey – Migration Adapted” & “Keep calm and win again”