1. Introduction to System Dynamics

2. Customer Satisfaction Culture Price Wars R&D Spending
What do I mean by System?
A System is an interconnected series of pieces that work together to achieve some objective.
Economy
Competitors
Growth
Customer Satisfaction
Culture
Price Wars
R&D Spending
Employee Satisfaction
Profit Margin
Install Cycle Time
Staff Skillset
Morale
Market Share

3. What is System Dynamics?
System dynamics is an approach to understanding the behavior of complex systems over time. It deals with internal feedback loops and time delays that affect the behavior of the entire system.
Developed in the 1950s at MIT and used across disciplines: notably business, the urban planning, then the environment, etc.
The Study of:
Complex Cause and Effect relationships over time
Understanding the future consequences of today’s actions
Death Spirals & Virtuous Circles
Business irony:
Things get worse before they get better
Success begets success / Success to the Successful / The Rich get Richer
The Law of unintended consequences
Fixes that backfire
The harder you push, the harder they push back
Improves in the short-term, gets worse in the long term.
Tipping Points
Advanced Version: Building Management Flight Simulators

4. Hierarchy of Behavior Events Patterns Systems
East Hospital has a bug in release 4.0
Increasing Leverage as You understand and solve the deeper problem
Patterns
Release 4.0 was released too soon (like many releases)
Systems
Bringing in revenue pressures teams to release early (perhaps causing problems and reducing revenue in the future)

5. Seeing the World in Loops

6. An Interchange after a Team Leadership Class
Senior Leader: “We were debating as a team whether we win because we are cohesive or are we cohesive because we win”
CEO: “Which is it?”
Senior Leader: “We decided that we win because we are cohesive”

7. Which Causes Which?
Team Success
Team Cohesion
Team Success
Team Cohesion
Could it be both??
Team Success
Team Cohesion

8. A Feedback Loop
Team Success
Team Cohesion
Can be written as
Team
Success
Team
Cohesion

9. Interchange at CEO Staff Meeting
Regional Leader: “We are missing our numbers because NPIs are late”
Late NPIs
Missing Numbers
Any other relation you can think of?
Late NPIs
Missing Numbers
NPI = New Product Introduction

10. Late NPIs Missing Numbers Another Feedback Loop Missing Numbers
Limited Hiring or
Backfilling