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Everyone speaks of systems: computer systems, air traffic control systems, economic systems and social systems. But few people realize that systems exist everywhere. They influence everything we do.
For the last 30 years, I have been developing a field known as system dynamics. System dynamics combines theory, methods and philosophy for analyzing the behavior of systems. The field arose from seeking a better understanding of management. Applications have now expanded to environmental change, politics, economic behavior, medicine, engineering, and a new more effective kindergarten through 12th grade education.
What is System Dynamics?
System dynamics uses all available information including not only numerical data but also the knowledge people have in their heads about the organization of a system and the reasons for decisions and actions. From the extensive sources of information, a computer simulation model is constructed. The computer model shows how detailed structure and policies of a system often lead to puzzling behavior. The dynamic behavior of a system is controlled by a set of reinforcing and stabilizing feedback loops. Those controlling feedback loops usually lie within the known system even though people tend to blame troubles on outside sources.
Relatively simple systems, let alone those with interesting real-world complexity, are usually too difficult and non-intuitive for our unaided brains to deal with effectively. Understanding real-world complexity requires simulation models of the actual system to give us a manageable laboratory from which to build understanding.
System dynamics is based on principles that underlie change through time wherever change occursin physical systems, social behavior, internal medical dynamics and economic development.
System dynamics computer simulation modeling allows people to test their understanding of how a system is controlled. Even more important, simulation permits evaluating alternative policies for improving the behavior of a system.
Applying System Dynamics
A system dynamics project starts from a problem to be solved or an undesirable behavior to be corrected or avoided. The first step taps the wealth of information that people possess in their heads. We conduct extensive, in-depth interviews with people about how they make decisions. Discussions range widely from normal operations, to actions that would result from various imagined kinds of crises. We examine the self-interest of individuals and locations of influential power centers.
As with all systems, when working with a corporation, we talk to managers to discover the implicit decision-making rules that control actions. People see their own decision-making behavior very much as others see them. They are consistent in describing operating policies throughout an organization. And they justify their actions as helping to correct the problems that a company is experiencing.
After describing policies, information flows and interconnections in a company, we organize this information into a computer simulation model. The computer acts out the roles of people at each decision point in the system. The computer feeds actions at each decision point to other connected decision points to become the information to feed the next round of decisions.
The model generates streams of actions controlled by policies built into the model. The policies make all the decisions step-by-step in time as the simulation unfolds. If the resulting behavior is undesirable, one searches for a better set of policies that yield improved results.
Early in the development of system dynamics, we discovered surprising things about corporations that apply to all social systems. In short, the policies established to solve a problem are often the cause. The actions that people know they are taking are often the cause of the problems they are experiencing. The nature of the dynamic feedback structure of a system tends to mislead people into taking ineffective and even counterproductive action.
Several decades of progress in system dynamics point to a new kind of management education. Such a future education will train new kinds of managers. I anticipate future management schools devoted to enterprise design. Such business schools would train enterprise designers.
A fundamental difference exists between an enterprise operator and an enterprise designer. Consider the two most important people in successful operation of an airplane. One is the airplane designer and the other is the airplane pilot. The designer creates an airplane that ordinary pilots can fly successfully. Is not the usual manager more a pilot than a designer? A manager runs an organization, just as a pilot runs an airplane. A pilot depends on an aircraft designer who created a successful airplane. But who designed the corporation that a manager runs?
Almost never has anyone intentionally and thoughtfully designed an organization to achieve planned growth and stability. Present management education is the counterpart of the trade schools that train pilots. Some universities in the future should move toward creating departments of enterprise design just as they already have aeronautical departments for aircraft design.
The Future of K-12 Education
The most recent frontier in system dynamics lies in K-12 education. Several dozen K-12 schools in the United States, Germany and other countries are now doing excellent work, and several hundred are making progress. System dynamics modeling has been applied to mathematics, physics, social studies, history, economics, biology and literature.
Many of us believe that everything now known in the field of system dynamics can be learned by age 16. Much new material has yet to be developed to extend beyond into a future undergraduate and graduate education. One may ask how it is possible to teach behavior of complex dynamic systems in K-12 when the subject has usually been reserved for college and graduate schools. The answer lies in the realization that the mathematics of differential equations has been standing in the way. Differential equations often mislead students as to the nature of systems. Nowhere in nature does nature take a derivative. Nature only integrates, that is, accumulates.
Any child who can fill a water glass knows what accumulation means. The levels (stocks) in a system dynamics model are the integrations (accumulations) that generate dynamic behavior. By approaching dynamics through the window of accumulation, students can deal with high-order dynamic systems without ever discovering that their elders consider such to be very difficult.
One elementary school teaches kindergarten students about the concepts of stocks and flows and the idea that behaviors can be graphed over time. Water in a bathtub is a stock and the water from the faucet and out the drain are the flows. Likewise, ones reputation is a stock and the good and bad things one does are the flows that change that reputation. In other schools, students are building simulation models of environmental, family, urban and political systems. English teachers are experimenting with simulation of plots in literature. Students are fascinated with the insights gained by modeling psychological dynamics as in Shakespeares Hamlet.
A system dynamics education should sharpen clarity of thought and provide a basis for improved communication. Computer modeling requires clear, rigorous language. Students must learn how to translate from descriptive language to model language and how to make the reverse translation into clear, unambiguous written text.
System dynamics should build courage for holding unconventional opinions based on a better understanding of systems. Students should develop precision in learning, improving and explaining understanding.
System dynamics should instill a personal philosophy that is consistent with the complex world in which we live. More and more, computer models will be used as the basis for determining social and economic policies. The 21st century will exhibit rapid changes in societies, driven mostly by population growth, crowding, environmental degradation and shortages of resources. Todays students should be prepared for managing such changes.
Students should develop the ability to transfer the understanding of dynamic structures among very different fields. If a student understands behavior of a structure in one field, that understanding is transferable to another field where the same structure is likely to be found. Transferability of structure and behavior should create a bridge between science and the humanities. As the underlying unity between fields becomes teachable, we can move back toward that concept of the Renaissance Man, who has broad intellectual interests and is accomplished in both the arts and the sciences.
During the past century, the frontier of human advancement has been the exploration of science and technology. I believe that we are now embarking on the next great frontier, which will lead to a far better understanding of social and economic systems.Deb Derrick contributed to the editing of this article
For additional information and papers online, visit: http://sysdyn.mit.edu/
A Pioneer in System Dynamics
As a young boy growing up on a cattle ranch north of Arnold, Neb., Jay W. Forrester probably never imagined how his life would turn out. Today he is one of the most notable graduates (EE 39) of the UNL College of Engineering & Technology. From Nebraska, he went on to the Massachusetts Institute of Technology, where he directed the design and construction of one of the first high-speed digital computers. He also invented and patented random-access, coincident-current magnetic memoryfor many years the standard memory device for digital computers.
Born in 1918, Forrester is Professor of Management at MIT, where he pioneered the field of system dynamics. The field has developed since 1956 under his leadership to evaluate how alternative policies affect growth, stability, fluctuation and changing behavior in corporations, cities and countries. He also is introducing system dynamics and learner-centered education in K-12 schools as a dynamic foundation underlying most subjects.
Forresters work has won international acclaim. He was inducted into the National Inventors Hall of Fame and received the National Medal of Technology from President Bush in 1989, as well as many other awards. He is a member of the National Academy of Engineering and a Fellow of the Institute of Electrical and Electronics Engineers, the Academy of Management, the American Academy of Arts and Sciences, the American Association for the Advancement of Science, and a Benjamin Franklin Fellow of the Royal Society of Arts in London.
The following narrative is excerpted from a talk in which Forrester was asked to give a personal recollection of how he developed the field of system dynamics.Deb Derrick
Exploring the Unknown
There are two threads that run through this history. First, everything I have ever done has converged to become system dynamics. Second, at many critical moments, when opportunity knocked, I was willing to walk through open doors to participate in unknown frontiers on the other side.
I grew up on a cattle ranch in Nebraska. A ranch is a crossroads of economic forces. Supply and demand, changing prices and costs, and economic pressure of agriculture become a very personal, powerful and dominating part of life.
In high school, I built a wind-driven electric plant that provided our first electricity. That was a very practical activity, and I have maintained that objective of practical real-world usefulness in all of my activities. Although I had a scholarship to go to the Agricultural College, I decided that it wasnt for me. So I enrolled in electrical engineering, which, as it turns out, was the only academic field with a solid, central core of theoretical dynamics. And so, the road to the present began.
Graduation brought me to MIT and another turning point. I was commandeered by Gordon S. Brown, who pioneered feedback control systems at MIT. During World War II, we developed servomechanisms for the control of radar antennas and gun mounts, two of which were installed on the carrier Lexington to stabilize a fighter-director radar. About nine months later, the control units on the Lexington stopped working, and I volunteered to repair them in Pearl Harbor. Having discovered the problem but not having time to fix it before the carrier left port, I was asked if I would like to come with them and finish my job. I said yes, having no idea what that meant.
We were off-shore during the invasion of Tarawa and then took a turn down through the Marshall Islands to bomb Japanese fighter-plane bases. The enemy kept trying to sink our ships and eventually succeeded in hitting the Lexington, cutting off one of the four propellers and setting the rudder in a hard turn.
At the end of World War II, I decided either to get a job or start a company in feedback control systems. Gordon Brown again intervened. He had a list of projects that he thought might interest me. I picked building an aircraft flight simulator, a project promoted by Admiral Louis deFlorez of the U.S. Navy. The admiral was a flamboyant individual. He was the only person who, by some process, had standing permission to land a seaplane on the sailing basin in front of MIT. He would come to MIT on Alumni Day, and the police would clear the basin of sailboats so he could land his plane. He would attend part of the program and, when the speeches became boring, he would rev up his engines and take off, thereby drowning out the program.
The simulator was first planned as an analog computer. After a year, it became obvious that an analog machine of that complexity would do no more than solve its own internal idiosyncrasies. Through a long sequence of changes, we came to design the Whirlwind digital computer for experimental development of military combat information systems. This eventually led to the SAGE (Semi-Automatic Ground Environment) air defense system for North America.
It was time for another turning point. James Killian, then president of MIT, told me of the new management school that MIT was starting and said that I might be interested. In the four years before I joined the Sloan School of Management in 1956, standard courses had been started, but nothing had been done about what a management school within an engineering environment like MIT might mean. It seemed like an interesting challenge.
One day I found myself in conversation with people from General Electric. They were puzzled by why their household appliance plants in Kentucky were sometimes working three and four shifts and then, a few years later, half the people would be laid off. So I started to do some simulation using pencil and paper on one notebook page, which showed that the companys internal employment and inventory policies could create such instability independent of market demand. That was the beginning of system dynamics. To guide my own position on the board of directors of a high-tech company, I began to model how growth companies evolve. This modeling moved system dynamics out of physical variables like inventories into much more subtle considerations of leadership attitudes and the way information flows affect success and failure.
Another series of incidents in 1968 moved system dynamics from corporate modeling to broader social systems. John Collins, then mayor of Boston, decided not to run for re-election. MIT gave him a one-year appointment as visiting professor with his office next to mine. In discussions with him, I suggested we combine our efforts and the book Urban Dynamics developed from months of discussions with political and business leaders. It was the first of my modeling work that produced strong emotional reactions. Our conclusions were not easily accepted because we showed that the popular government programs for building low-cost housing actually created unemployment and urban decay.
Urban Dynamics led to work with the Club of Rome on the World Dynamics and Limits to Growth projects and to support from the Rockefeller Brothers Fund for applying system dynamics to understanding economic behavior.
The public responses to system dynamics have always surprised me. World Dynamics seemed to have everything necessary to guarantee no public notice, especially with 40 pages of equations in the middle of the book. I thought I was writing for maybe 200 people who would like to try an interesting model on their computers. But I was wrong. The book was reviewed by the Christian Science Monitor, Fortune, the Wall Street Journal, the London Observer and other media around the world. When Limits to Growth was published nine months later, public attention rose another factor of ten.
I mentioned working with Gordon Brown at MIT. He later became head of the Electrical Engineering Department and then Dean of Engineering. In his retirement, he picked up system dynamics and introduced it into a junior high school in Tucson where he spent the winters. System dynamics is now being brought into elementary and secondary schools around the world. Through the System Dynamics in Education project, we have worked toward an integrated, systemic, educational process that is more efficient, more appropriate to a world of increasing complexity, more compatible with unity in life, and more relevant to student interests.
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