PROFESSOR: This is a
full semester class
divided into two
half semester pieces.
15.871 is the six
unit H-1 class.
That's what probably most of
you are thinking about doing.
What I would urge you to
do is to take both halves,
because you and I will
co-teach the fall semester.
The second half
is called 15.872.
And although we think
this first half is good,
the real value in
terms of developing
a meaningful capability
for you to be
able to use system dynamics and
systems thinking effectively
will come if you take
the full semester.
You don't have to exercise
that real option today.
You can wait make that
decision a little later.
But think about it for right
now for your semester planning.
There are five assignments over
the course of this semester.
So the good news is
there are no exams.
The bad news is that
there are five assignments
and this class has a
reputation that I believe
is reasonably well deserved
for having a heavy workload.
The reason for that is clear.
I can't teach you anything.
I know you're
giggling over there.
But it's absolutely true.
I can't teach you anything.
All that I can do--
all that we can do
is create an opportunity for
you to learn for yourself.
You have to do it,
try it, practice it,
if you're going to
develop the capability.
That is not going to
happen by coming to class.
Now, you need to come to
class, and participation
is part of the grade.
But that's not sufficient.
It's also necessary for
you to try everything out.
And that is why we
have those assignments.
You also are going to need
to read the textbooks.
So this is the book.
And it's pretty fat and heavy.
You're not going to be asked
to read the whole thing.
The bad news on
that is I wrote it.
So I can tell you that it'll
definitely cure your insomnia.
I don't care if you buy it.
Although I always
say, if you buy two,
then you can kind of
go like this all day,
and you can save money by
quitting your gym membership.
But I don't care if you buy it.
I do care that you read it.
You can't do well
on the assignments
unless you read the material
in the book carefully,
and work through some
of those examples.
Chapter one is what you
need to be reading first.
The syllabus tells you
what to read for every day.
In addition, from
time to time, we
are asking you to read
a couple of short case
studies or other material.
And we'll provide
follow up articles
from the professional literature
from time to time as well.
So the question is why?
Why do we need something like
system dynamics and systems
thinking?
And I think the
answer is not simply
that the world is changing
faster and faster.
Things are accelerating.
Everybody knows that.
That's kind of the price of
admission to the world today.
It's that, despite all the tools
and methods that we've got,
all the analytic power
and our cleverness,
things are getting
harder and harder.
And more and more of the
policies that we implement
are failing to solve
the pressing challenges
that we face.
And this is not
what I'm saying this
is what the senior leaders and
organizations with whom I work,
what they tell me.
And the thoughtful ones--
the most thoughtful ones--
they say it's not
just the things
are getting harder
and more difficult,
despite our cleverness
and our analytic power,
but because of it.
That we're too clever
for our own good.
And I illustrate this
traditionally with this picture
of one of the leaders
of an organization
that I've worked with.
And here is the poor
guy in this office.
Now many of you have
seen this before,
but I think it's just a great
representation of what's
going on.
Like most senior managers
or lower level managers,
he is completely squeeze
by pressures on all sides.
Can't breathe.
Claustrophobic.
And what you're asked to do as
a manager is to be decisive.
You've got to make decisions.
Boo.
Things are now much
better for you.
Now you can begin to
breathe more easily,
see out to the side.
Relief.
Things are great.
But as you may
suspect, there could
be some unanticipated
side effects.
Now, the reason I like
this and the reason
I'm showing it to
you again, so I
think it's a great way to
capture the core of what
a lot of systems
thinking is about.
Why does this happen?
Why does this happen?
And why don't people learn?
So it's not just
that it happens once,
but people do it
over and over again.
So why?
That's a real question for you.
So what do think?
Why might this happen?
And why might this
phenomenon persist?
Yeah go ahead.
AUDIENCE: It's only
in the short term,
and the short-term
implications of that action.
PROFESSOR: Great.
So short-term time
rise and not thinking
about what might happen later.
So apres-moi le deluge.
I don't care.
I'll do what's good for
me in the short run.
I don't care if it
destroys the world later.
OK great.
What else?
Yeah go ahead.
AUDIENCE: Feedback loops.
So you would get some
feedback and you won't really
consider it the way
that it really is.
PROFESSOR: So there's definitely
a feedback loop here, right?
And the problem is that
it takes too much time
for that to happen.
So the time delay in
getting the feedback-- maybe
missing feedback-- is connected
to the short time horizon.
In fact, what's going to
happen in most organizations
to this manager right about now?
He solved the problem, right?
So what happens to him.
AUDIENCE: He gets promoted.
PROFESSOR: Of course.
He gets promoted.
You get to sit in the chair.
It's a combination of
short time horizon,
and not only by that
guy, but the people
who are evaluating
his performance
and maybe encouraging him to
have a short time horizon.
That's not going to be good
for anybody in this situation.
What else?
What else might be going on?
We get somebody
over on this side?
[? Argoff, ?] what do you think?
AUDIENCE: I think it's
also, like you said it was,
when you're thinking
only short term,
you find that can you make
a decision without thinking
about what the impact of--
PROFESSOR: This is a
really important point.
And let me put it
into our terms.
When people say, it wasn't my
fault, the reason we failed
was some outside effect, some
unanticipated side effect,
something that came
from out there.
It wasn't my fault.
They're trying to persuade
you that they, in fact, are
great managers and shouldn't
be held responsible
for the bad outcome.
In fact, almost all the time,
it is at least partially
the result of their
own past decisions.
Feedback they didn't understand
and didn't recognize.
And what they're
actually trying to do
is persuade you that
it wasn't their fault.
But what they're
really communicating
is how narrow and
blinkered and inadequate
is their understanding of
the system in which they're
embedded, what we would
call their mental model.
I think that's where
you were going.
So that's a really
important idea
in what we're going to be about.
So one of the mental
models that I think
is the most damaging out there
is this open loop mental model.
And here's the question.
In a project that
you've been involved in
or that you were
reviewing, how many times
have you seen this picture?
Can I see hands?
Who's seen it?
Almost everybody.
Who's drawn it in one of
their project proposals?
About 3/4 of the same hands.
This is a very interesting,
unintended revelation
of mental models
that people hold
about complex dynamical systems.
And it basically says, there's
a beginning and middle and end
to the project.
We're going to
identify the issue.
We're going to gather the
data, evaluate our choices,
select the optimal solution,
and then implement.
And of course, the students
in the last class when I said,
what's wrong with this picture?
They all said, oh well.
You know.
You're a professor.
So you've never implemented
anything in your life.
OK.
Now, in fact, a
lot of my research
is devoted to the
question of why
implementation so often fails.
We're going to talk about that.
System dynamics isn't useful
unless you can actually
make things different.
If you can't catalyze
change in your organizations
in which you're engaged,
none of this is meaningful.
You might as well
become a professor.
So we're going to
talk a lot about--
and I mean that in all
the negative senses
that you're laughing about.
We're going to talk about
system dynamics in action,
especially in the second
half of the class.
You're going to see a lot of
case studies of how people have
been able to use these
tools effectively
in difficult political
organizational settings.
So that's an issue.
But it's not the real problem.
The real problem with this
is that it has this open loop
one-way sequential
perspective that
says there's a beginning,
middle and end to the project.
I don't know about you, but no
project I ever been involved in
has ever gone that way.
There's always
iteration, feedback.
We have to go back to the
beginning, almost always
unintended, unplanned
iteration, because we go through
and we find out as
we gather the data,
we interview the folks
that are engaged.
And we evaluate
our technologies,
supply chain for the new
product or whatever it is.
We really didn't
understand the situation.
We really didn't understand
what the real problem is.
We have to loop back
to the beginning.
This happens continually all
the way through the project.
And it's that feedback
that's critical here.
So this is the metaphor that I
want you to fix in your mind.
You make decisions.
Your decisions change the world.
And then that creates
new information
which changes your next decision
in a continual, emergent,
iterative set of
feedback processes.
Now let me make this
a little more formal.
Again, this is a slight
review for those of you
who have had me in orientation.
But it's worth it,
especially if you
haven't seen this for awhile.
So here's that open
loop perspective.
People say, I know my goals.
I want better market share.
I want more profitability.
I want a bigger house, or a
nicer car, whatever it is.
That's going to
motivate my decisions.
And then my decisions
are going to change
the state of the world, state
of the system, problem solved.
That's wrong.
I can't know what
decisions to make
just because I know
where I want to be.
I have to also know
where I am right now.
There has to be a feedback.
So the example I always give is
that, I'm a bicycle commuter,
and as I was riding
into MIT from Lexington
this morning, as
every day, I must
keep my bike on the right
hand side of the path.
If I don't, I'm going
to have a crash.
So just knowing that I need
to be on the right hand side
is not enough for me to know
how to turn the handlebars.
I have to have the feedback
from where my bicycle actually
is in order to know which
way to turn the handlebars.
It is the same for you, driving
your car or flying an aircraft.
Now if flying your organization
through hostile skies, dog
fighting with the
competition, keeping investors
happy and calm in the
back, and serving them
nice drinks and hors d'oeuvres--
if flying your company
was just as easy as
flying an aircraft, which
isn't that easy by the was.
It doesn't take much bad
weather, fatigue, or substances
in your bloodstream to
degrade your abilities so
much that you're going to crash
the plane, crash your car,
or crash your bicycle.
But if it was as easy to
run your company as it
is to ride a bike, no problem.
We wouldn't need this class.
But it's not.
And it's not easy in part,
because that feedback loop,
which represents the intended
effects of your decisions,
but doesn't capture
the unintended effects.
It's only piece of the system.
So you're embedded in a much
more intricate complex system
in which that's what's
going on for you.
That represents mental models
of what you ought to do.
But mental models are limited.
And all the impacts of your
decisions-- all the effects
of your decisions that you
didn't think about in advance,
and that aren't part
of your mental model,
they're going to manifest
as so-called side effects.
Remember there's no such
thing as a side effect.
There's just the effects
that are in your mental model
that you were counting
on and everything else
is going to manifest as
a so-called side effect.
And they're usually
going to feedback
in a way that's
opposite to your goals.
Much more interesting,
you're not
the only player in the world.
So there's all the
other actors out there,
all the other agents out there.
And they have their own
goals, which are typically
different from your goals.
You want more market
share, so do they.
There is only 100% to divide up.
And every time you
make decisions,
even if they're
efficacious that pulled
the world closer to
your goals, they're
necessarily going to be
pulling the world farther
away from those
other folks goals--
your customers, your suppliers,
your employees, the investors,
the competitors, the communities
in which you operate,
the natural world in which
all of that is embedded.
That's all going to be there.
And those goals are going to
motivate them to take action,
to try to bring the
state of the world
back to what they want it to be.
Their mental models
are limited too.
And so they're going to generate
unintended so-called side
effects.
And now this is getting to
be a fairly complex thing
to manage-- not as easy
as riding a bicycle.
The whole story here is about
expanding the boundaries
of your mental models so that
more and more of this structure
is something that you can
begin to think about and try
to take into account
when you make decisions.
You're never going
to get it all,
because all models are wrong.
Model is not the real system.
Only the reality is the reality.
And everything in your head is
a limited, filtered, imperfect
representation.
But we can do a lot better
than the mental models
that we have now.
So what are we going to do?
What we're going to
do is develop tools
in this class to elicit
your mental models,
articulate them, and do that
in the context of busy people
in organizations.
We're going to explicitly
account for feedback,
and stocks and foils, and time
delays, and non-linearities,
and the other elements of
complex dynamical systems.
And then we're going
to use simulation
to figure out what that means.
Not because the model is
going to give us the answer--
all models are wrong-- because
the simulation models are going
to give us insight that
improves our mental models
and the mental models
of all the people
who need to be involved in
order for change to happen,
so that people are empowered
with high leverage,
effective policies to go out
there and make a difference.
You can read in the syllabus
how we're going to do that.
But I think there
are three core ideas
I'd like to leave you with
before we break for today.
The first is that it's the
structure of complex systems
that generates their behavior.
That structure
consists of the physics
of the system, the information
that's available to you,
and then the decision
rules that you
used to turn that
information into action.
All three of those
are relevant here.
Mental models matter a lot.
It is not enough just to come
up with the right answer.
And it's not enough
just to change
the physics of the system, or
the information with a new IT
system, or the incentives
that people face.
All those are
important, but they
aren't generally sufficient.
And one of the very powerful
mental models that's out there
is what we call the
fundamental attribution
error in psychology.
And this is an idea you should
have learned at the beer game.
And it's the idea that if you
ask me why I've screwed up,
I've got reasons
known as excuses.
It was the customer's fault.
It was somebody else's fault.
The sun was in my eyes.
But if I'm asked to
explain why use screwed up,
It's because you're not capable.
You don't have what it takes,
you and everybody like you.
And that is almost always wrong.
And it's low leverage.
It doesn't help.
So to put that into
practice in this class, when
we come in here, and you
work with us this semester,
we're going to make the
following basic assumption.
We believe that everybody
in this room is intelligent,
is capable, cares about doing
their best, and wants to learn.
