Modeling for Learning Organizations (Morecraft, Sterman, 1994, 2000)

Conventional wisdom says that we can learn from our errors, but errors in the business world can be prohibitively costly. To truly understand how complex business organizations function requires different tools than most managers have been given. Yet managers need methods to understand how their organization works in order to test policies, discover flaws in thinking, and find the hidden leverage points within the complex systems they manage. Through a system simulation, the dynamics of the whole system, not just the individual parts, becomes apparent. The outcome of current and future situations becomes possible to predict and with this information, managers can focus on the changes that need to be made.
The distinguished contributors to Modeling for Learning Organizations include Jay W. Forrester, Peter Senge, and Arie De Geus. You will learn about leading applications such as:

Shell's work on modeling the oil producers.

The Management Flight Simulator, a computer-based case learning environment pioneered by John Sterman and others at MIT

The landmark Claims Learning Laboratory at Hanover Insurance companies.

For managers, professionals, academicians, and everyone who recognizes the profound implications of modeling, this book is an excellent resource. It offers a broad understanding of the modeling process, discusses a multitude of case studies, and provides a review of the most recent simulation software.

xi John Morecraft and John Sterman, the editors of Modeling for Learning Organizations, have gathered together the leading system dynamicists from around the world to articulate the latest thinking and practice on how modeling can support learning in organizations. We encourage you to discover in this volume the many ways system dynamics modeling can be approached and the many purposes it can serve.

p.3 Over the last decade modeling and simulation have come of age... increasingly, models are seen to have a different and more subtle role as instruments to support strategic thinking, group discussion, and learning in management teams.

p.3 Models can be viewed as maps that capture and activate knowledge. They can also be viewed as frameworks that filter and organize knowledge. Finally, they can be viewed as microworlds for experimentation, cooperation, and learning.

p.4 Learning takes place when people discover for themselves contradictions between observed behavior and their perceptions of how the "world" should operate.

p.5 System dynamics models are now viewed as instruments to support cognitive processes and group problem structuring.

p.8 Mental models shape executive debate and dialogue.

p.11 A fundamental premise of his [Seymour Papert, Mindstorms, 1980] work is that people learn effectively when they have transitional objects to play with in order to develop their understanding (or refine their mental models) of a particular subject or issue. The combination of transitional objects, learner, and learning process is what Papert calls a microworld.

p.27 model builders are rethinking their approach to modeling. There is a broader view of what models can do for management teams: They can activate knowledge, focus discussion, challenge mental models, and aid learning.

p.60 People are not good calculators of the dynamic behavior of complicated systems.

p.63 To deal with the dynamic characteristics of social systems, we must represent the essential policy skeleton governing decisions.

p.64 A principal use of a dynamic model is to study the influence of alternative policies on system behavior.

p.196 The choice of individual courses of action is only part of the manager's or policy-maker's need. More important is the need to achieve insight into the nature of the complexity being addressed and to formulate concepts and world views for coping with it (Mason and Mitroff 1981, 16).

p.196 Strategies are the product of a worldview... the basis for success or failure is the microcosm of the decision makers: their inner model of reality, their set of assumptions that structure their understanding of the unfolding business environment and the factors critical to success... (Wack 1985,89,150).

p.196 managers and academics alike have identified organizational learning... as a key to flexibility and competitive advantage... Hayes, Wheelwright, and Clark (1988) conclude, "There is one common denominator in high-performance plants: an ability to learn - to achieve sustained improvement in performance over a long period of time. When assessing a manufacturing organization, learning is the bottom line." Analog Devices CEO Ray Stata (1989) argues that "the rate at which individuals and organizations learn may become the only sustainable competitive advantage[, especially in knowledge- intensive industries]" Arie de Geus (1988), former chief of planning at Royal Dutch/Shell, observes that an organization's ability to survive depends on "institutional learning... For this reason, we think of planning as learning, and of corporate planning as institutional learning."

p.300 Software tools that can dynamically sense and then display graphically the strength of selected model feedback mechanisms hold much promise.

p.369 Modeling is essentially a dynamic activity of thinking out to the point where we can test our understanding, whether it be by simulation or by life itself.

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