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Strategic Thinking with System Dynamics: Tools and Techniques

Dive into the world of strategic thinking enhanced with system dynamics tools. Explore how to set goals, identify stakeholders, assess political feasibility, and create action programs through dynamic analysis and computer simulations.

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Strategic Thinking with System Dynamics: Tools and Techniques

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  1. The TPI Approach • Strategic thinking • Strategic thinking tools • Systems thinking • System dynamics tools

  2. Mission Mandates Stakeholders Strategic options Action programs Goals Political feasibility Means to ends Ownership Strategic Thinking

  3. System Dynamics • Dynamic thinking • Feedback thinking • Quantitative thinking • Thinking about accumulations • Thinking algebraically • Laboratory thinking • Computer simulation experiments

  4. Cognitive Shifts Required • Verb phrases to quantities • Rich detail to useful aggregation • Arrow links to algebra • Goals as ‘heads’ to goals in goal-seeking feedback loops • Events to dynamic behavior • Decisions to ‘policy structure’

  5. Hints from Strategic Thinking to Look Deeper • A head that looks like a means or a tail • …suggests on the verge of a feedback loop • Causal loops in the cause map • …suggests dynamic analysis is needed • Numbers are needed to be sure • …suggests simulation is needed

  6. Goals as Heads

  7. Goals in goal-seeking loops Internal changes Unintended effects

  8. Positive loops self-reinforcing growth producing destabilizing accelerating even number of –’s Symbolized by Negative loops counteracting goal seeking stabilizing balancing odd number of –’s Symbolized by Two kinds of feedback loops

  9. Births Population per year Examples of Reinforcing Loops

  10. Graph for Population 20,000 15,000 10,000 5,000 0 0 25 50 75 100 Time (year) Graph for Businesses 10,000 9,000 8,000 7,000 6,000 0 25 50 75 100 Time (year) Typical Reinforcing Loop Behaviors

  11. Self-reinforcing dynamics in the GORA case?

  12. Graph for Inventory 20,000 15,000 Graph for Momentum 8 10,000 4 5,000 Graph for Population 0 10,000 0 -4 0 10 20 30 40 Time(Week) 7,500 -8 0 10 20 30 40 Time 5,000 2,500 0 0 25 50 75 100 Time (Year) Typical Counteracting Loop Behaviors

  13. Guidelines for Conceptualization • Focus on a problem. • Don’t try to build a model of a system. • Graph dynamics of key variables. • Focus on patterns of behavior over time, not events • Distinguish obvious stocks and flows from other quantities. • Set model boundaries. • Temporal: the time horizon • Conceptual: what’s included and excluded • Causal: what’s endogenous and exogenous • Develop loop diagrams. • Explain the problem behavior in terms of feedback structure. • Start simply. Build to complexity and completeness.

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